Giant online radio broadcaster iHeartMedia have revealed that they’re in the process of launching a new music streaming service with 2 paid offerings.
People close to iHeartMedia’s plans have revealed that they are planning to announce their very own music streaming service this week. The sources close to iHeartMedia also revealed the the new service will come with 2 different paid options so users can decide what is best for them.
The massively popular radio network will reportedly offer an ad-free radio station on the service for $5 a month as well as a traditional on-demand music streaming service for $10. According to the sources close to iHeartMedia, their Chief Executive Bob Pittman will make an announcement during their music festival this week, taking place in Las Vegas.
Although it’s suggested that iHeartMedia will reveal their music streaming service this week they are reportedly yet to acquire music licenses with labels that they will need to launch their service. Once they have their licenses iHeartMedia will still have a bigger hurdle to cross, and that is it’s competition in other music streaming services.
iHeartMedia won’t be the only newcomers to the streaming landscape with the US’ massively popular radio streaming service Pandora launching a streaming service soon, as well as others. In addition the existing music streaming services present a giant force that has already been established, with Spotify’s incredible user numbers and Apple Music’s phenomenal first year growth, not to mention the variety of smaller streaming services that represent more rivalry.
However, the sources familiar with iHeartMedia’s plans say that it’s an important move for them to set up their own streaming service and diversify from just online radio networks. One of the sources said: “It is so clear that digital is everything in radio and in streaming.” It’s true that music streaming is currently making the music industry boom again with 2 years of growth driven by streaming after 10 years of decline in the music business.
Digital music subscriptions grew by 50% last year and shows no signs of slowing, with paid streaming revenues expected to rise from $2.2 billion in 2015 to $12.7 billion by 2020. Radio has been seeing a large decline over the years as music becomes more and more digital and whilst iHeartRadio have found a medium between the two it hasn’t been enough as they currently have $21 billion in debt.
Director at New York University’s Steinhardt School of Culture, Larry Miller told the NY Post: “Radio has underinvested in digital. I’m very impressed with iHeart services, and although they haven’t announced anything in response to Pandora, I’ve got to believe they are feeling the heat of competition, especially in the car, which has been the one area they have enjoyed exclusive positioning.”