IHeartMedia Confirms Two New Streaming Services for Australia

America’s largest radio network iHeartMedia is launching a mid-tier streaming service in Australia next year.

A specific date has not been named but it will be rolled out in the US in January.

It’s a major step from the radio station streaming provided currently by iHeartMedia, which was established in 2008.

It has recently signed deals with all three major labels – Universal Music, Sony Music Entertainment and Warner Music – as well as indie labels and distributors including The Orchard, Entertainment One, INgrooves, DashGo, Naxos and CD Baby. At launch it will have 30 million tracks.

Both services are “tied directly to radio”, which means they will incorporate iHeart’s U.S. network of 858 traditional broadcast radio stations (which have a combined 269 million listeners), and use them to provide its marketing.

This is iHeartMedia’s point of difference. Its President Darren Davis says that while the iHeartRadio app from five years ago successfully allowed listeners to take their radio stations anywhere, streaming was going to take the radio listening experience one step further.

“Now we’re going to turbo charge that by making the live radio experience even better,” Davis pointed out to Billboard. “In both tiers of service, the core of the offering is that we’re reinventing live radio, and we’re the only ones who can do it because of who we are.

“If you hear a great song on the radio today, you want it, maybe you take a screen shot or write it down in a notepad and you either buy the CD later, or you quickly fumble around on your phone and open a different app and try and buy the song before you forget the name of it. It’s not a seamless experience, and it’s kind of strange that it took somebody so long to fix that.”

The company emphasises the new services’ role of “bridging the gap between radio discovery and curation”, pointing out 73% cite live radio as their top discovery source. “Thus, our service reimagines radio, combining the technology of an on-demand service with the power of community fostered by live radio.”

The announcement comes a week after Pandora, its most direct competitor, unveiled plans for the relaunch of a similar product also in early 2017.

Reports suggested that the two services would be priced at $4.99 and $9.99. But President Davis says price is still being researched, and will be announced closer to launch.

But it would be easy to say that the cheaper iHeartRadio Plus and similar-featured Pandora Plus are aiming to entice casual streamers. This is good news for the recorded music industry, as it will draw in more mainstream users and accelerate the growth of streaming.

85% of iHeartRadio’s 90 million registered users do not yet subscribe to a streaming music service “because they find them hard to use”, said Davis, which obviously indicates a large growth potential.

iHeartRadio All Access, its on-demand streaming service for an expected $9.99, is set to compete directly with Spotify, Apple Music, Tidal, Rhapsody/Napster and Google Play. It will have features as offline models, song replays, unlimited skips and saving a song to a playlist.

There are no details as to which features will be offered in the cheaper option.

iHeartRadio is behind the ball, with Pandora at least, in streaming time. Pandora says it streamed 5.3 billion hours over the second quarter of 2016, or 1.76 billion a month. Its last figure for registered users was 250 million, in 2014.

According to iHeart’s website, its digital radio product generates about 127 million monthly listening hours. Its listening hours grew 33% in the first quarter of 2016.

Sir Lucian Grainge, Chairman and CEO of Universal Music Group stated, “Universal Music Group is pleased to welcome a new addition to the growing and dynamic music subscription space with iHeart’s launch of interactive services.”

Steve Cooper, CEO of Warner Music Group said, “iHeart’s expertise and reach in radio programming and curation, combined with the full power of streaming technology, is a compelling prospect.

“These new services will open up the choice of experiences that iHeart offers music fans, while providing our artists and songwriters with a wider range of commercial and marketing opportunities.”

On the weekend, the two-night 2016 iHeartRadio Music Festival staged in Las Vegas. The line-up included U2, Sting, Drake, Britney Spears, Sam Hunt, Twenty One Pilots, Billy Idol (who was joined by Miley Cyrus for Rebel Yell), Florida Georgia Line, OneRepublic, Sia, Cage the Elephant, Zedd, Tears for Fears, Ariana Grande, Pitbull, Usher, The Chainsmokers and Troy Sivan.

iHeartRadio Australia, with KIIS FM and Optus, sent Aussie fans to the event.