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iHeart launches Napster-powered subscription service
By Chris Cooke | Published on Friday 2 December 2016
iHeartMedia has put its new subscription streaming service into beta in the US, and announced a tie-up with Napster for its fully on-demand element.
As previously reported, the American broadcast giant announced that it was expanding its existing iHeartRadio personalised radio set-up back in September. Like rival Pandora, as well as the existing free option, iHeart will now offer enhanced personalised radio for $4.99 a month (iHeartRadio Plus) and a fully on-demand streaming service at the standard $9.99 price point (iHeartRadio All Access).
Whereas Pandora bought the assets of the defunct Rdio to help with its plans to add fully on-demand streaming into the mix, iHeart is achieving that through a partnership with Napster. Though iHeart is keen to distinguish itself from Pandora – and Napster’s existing subscription offer – by talking up how it will integrate its traditional radio stations and programmes into the on-demand streaming experience.
Doing just that, iHeartMedia boss Bob Pittman said yesterday: “Ten times more Americans listen to radio every month than use a subscription service – so the debut of iHeartRadio Plus and iHeartRadio All Access powered by Napster is a unique opportunity to capture these non-music subscribers with an on-demand service built around radio”.
He went on: “Whereas the LP, CD and music downloads are the ancestors of all current on-demand services, the ancestor for our new on demand offerings is broadcast radio. By combining radio’s popularity and reach with interactive on-demand functionality, we have created the first fully differentiated streaming music service for consumers”.
The Napster tie-up is interesting. It’s a long-term player in the digital music space that brings together the brand of the infamous one-time file-sharing network with one of the first streaming music platforms in the US, Rhapsody, and the global subscription streaming service that emerged from a failed attempt to launch a subscription-based download set-up just as the iTunes store was opening for business in 2003.
Despite being a long-term player in the digital music domain, Napster has struggled to grab a significant slice of the rapidly expanding streaming music market now dominated by Spotify and Apple Music. Though it has regained a little more momentum in recent years, mainly due to some mobile bundling deals.
However, if iHeart’s move into subscription and on-demand streaming does prove to be successful, it could help to assure Napster’s long-term future in the process, while also enabling iHeart to take its radio-meets-streaming platform beyond the US on the back of Napster’s existing global reach.
Confirming the tie-up from his side, Napster CEO Mike Davis said: “iHeartMedia has a unique opportunity to shine a spotlight on the tremendous value premium streaming services bring to music fans, and to the music community at large. We’re honoured that iHeartMedia selected the Napster platform and brand to power a great music experience for consumers, and we’re excited to play a role in what will be a successful launch”.
With its personalised radio service, iHeart has achieved a great deal in just a few years in terms of users, though mainly by relentlessly plugging the set-up via its AM and FM radio stations. But, like Pandora, what iHeartRadio really needs now is more revenue than more users, hence the move into subscriptions. It remains to be seen if the broadcaster can turn its freebie listeners into paying customers, whether on the five or ten dollar a month packages.
That mission is in no small part linked to the music industry’s wider challenge of turning more mainstream consumers into paying subscribers of streaming tunes. Premium readers can check out our summary of that challenge in this CMU Trends article published after iHeart’s initial announcement back in September.
