IHeartMedia to Launch On-Demand Music Service
September 23 2016 - 2:51PM
Dow Jones News
By Hannah Karp
iHeartMedia Inc., the nation's biggest radio broadcaster, is
starting its own on-demand subscription music services, upping the
competition in an already jam-packed market.
Like Spotify AB, Apple Inc.'s Apple Music, Alphabet Inc.'s
Google Play Music and rap star Jay Z's Tidal, the broadcaster's
iHeartRadio All Access service will offer subscribers unlimited,
on-demand listening to about 30 million songs. A cheaper option
called iHeartRadio Plus will give listeners the ability to
instantly replay songs they hear on the radio through the company's
eight-year-old iHeartRadio app, and to save those songs so they can
listen to them offline.
Both services, slated for launch by January, will be integrated
with the streaming of the company's live radio broadcasts -- a
feature that will set them apart from the pack. iHeartMedia,
formerly known as Clear Channel Communications, has 858 stations
that reach collectively reach 269 million people a month, Its
digital iHeartRadio service, counts 90 million registered users,
who can use an app or website to listen to what's being broadcast
on the company's own radio stations and more than 1,000 others.
Most people in the U.S. still rely on FM radio to discover new
music, according to research firm MusicWatch Inc., even those who
pay for on-demand services that feature celebrity curators and
algorithms aimed at catering to users' individual tastes.
IHeartRadio's president, Darren Davis, said his team hadn't
determined how it would price its new offerings, but added that the
subscription plans were aimed primarily at "keeping people
listening to our stations."
iHeartMedia earns most of its revenue from advertising, and
paying for the subscription services won't erase the ads that air
on the 2,000 stations streamed on iHeartRadio. IHeartRadio's custom
stations, though, which users can create based on an artist, genre
or mood -- similar to Pandora Media Inc.'s popular service -- will
remain ad-free.
The broadcaster's jump into the subscription game follows a
similar move by Pandora, which counts nearly 80 million active
monthly listeners to its free service and competes with iHeartMedia
for advertising. Pandora this month launched an enhanced version of
its $5-a-month ad-free service and plans to roll out a $10-a-month
unlimited on-demand tier by the end of the year.
But Mr. Davis said his team had been considering its next move
ever since launching iHeartRadio in 2008, and has been conducting
surveys for the past two years to gauge its listeners' interest in
subscription music.
For record companies, the planned services are a welcome new
potential source of revenue from terrestrial radio, which isn't
required by federal law to pay royalties to labels or performing
artists when it plays their music on the airwaves. Broadcasters do
pay digital performance royalties to labels and artists to stream
their music online, but the subscription offerings could help
labels eke even more out of radio listeners.
Write to Hannah Karp at hannah.karp@wsj.com
(END) Dow Jones Newswires
September 23, 2016 14:36 ET (18:36 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Apple (NASDAQ:AAPL)
Historical Stock Chart
From Aug 2024 to Sep 2024
Apple (NASDAQ:AAPL)
Historical Stock Chart
From Sep 2023 to Sep 2024