At the beginning of 2017, iHeartMedia announced that it was launching two on-demand streaming services: iHeartRadio Plus and iHeartRadio All Access powered by Napster.  Touted as the first streaming services to offer on-demand functionality that makes radio truly interactive, iHeart is hoping that its differentiated platforms will offer consumers features that can’t be found in other streaming services like Pandora and Spotify.

 

To tell us more about this exciting project, we are joined by Darren Davis, President of iHeart Radio.  Darren has been a part of iHeart/Clear Channel for nearly 25 years and has been instrumental in some of that company’s biggest success stories.  We wish him all the best with this new endeavor and are thrilled that he’s agreed to be interviewed by us.

 

GM: Since iHM made the announcement that it was launching this two-tiered, on-demand streaming platform, there’s understandably been a lot of media attention around your product.  For some of our readers, particularly those overseas where the media coverage might not have been as widespread, can you describe the two streaming platforms and how they’re differentiated from the other kinds of streaming services that are out there?

 

DD: We created iHeartRadio five and a half years ago to help our powerful broadcast brands continue to be strong for years to come.  A way for listeners to keep loving our radio stations. And this new technology inside iHeartRadio turbo charges that - Because we’re making the radio listening experience even more engaging and more interactive.  We’re reinventing live radio with our new on demand subscription services, iHeartRadio Plus and iHeartRadio All Access, built right into the iHeartRadio app.

 

Remember – music is discovered on THE RADIO.  In fact, over 70% of Spotify and Pandora users say the place they discover music is the FM radio.  And now with what we’ve built, it’s the first time ever that on demand functionality is being used to improve the radio experience. 

 

We’re the first digital music service to bring on demand functionality to the mass market – in an easy to use way.  iHeartMedia has 269 million monthly listeners to our broadcast radio stations, and the vast majority don’t subscribe to ANY music service at all.  That’s who we think will love our service.  Because we’re making on demand functionality EASY to understand and use. 

 

GM: Who is the ideal target for each of these subscription services?  Is the success of this business model predicated on converting users of existing streaming services or have you identified a new consumer segment?

 

DD: If people love their favorite radio station and they love music, we believe they’ll love iHeartRadio.  We bridge the divide between music discovery and music collecting - to fix that broken experience where people hear a song one place (the radio) and have to go elsewhere to add the song to their music collection. 

  

For the first time ever, when listeners hear a new song or a favorite song on the radio - they can instantly replay a song and even save it directly to a playlist.  The touch of one button!  And there’s also offline listening and unlimited skips in custom radio.

 

We’re the only digital music service that can combine music discovery, music collecting, and the companionship of live radio into an all-in-one service.  No one else can do that.

 

In terms of our existing free users, they can still enjoy the free iHeartRadio they’ve always loved.  Nothing is being pulled behind a pay wall.  If the content was free yesterday, it’s still going to be free.  So our target here with these subscription products is a sea of Americans who love radio, love music, but haven’t yet subscribed to a music service - because prior services were too complex.

 

GM: With 95 million registered users and over a billion downloads, iHeartRadio (available both online and as a mobile app) has proven to be the most successful of the radio station aggregators.  How does the existing iHeart Radio platform affect ratings in your local markets, and what impact on ratings do you expect these two new streaming services to have?  In your role, is success rooted in a boost in ratings across iHM’s 150 local markets, or is it based on a different kind of metric now?

 

DD: Remember, the reason iHeartRadio exists it to further the relationship between the audience and our powerful broadcast radio brands.  So the ratings of our broadcast stations are a prime concern for all of us.  And the great news is, we were correct when we hypothesized that people would listen MORE if we just made it EASIER for them to do so.  By giving people quick, easy access to their favorite stations and personalities, our ratings have grown.  In the last year or so, iHeartMedia’s broadcast ratings grew 10% - and our digital listening grew around 30% during that same period!  So all the digital listening we have has truly been additive.

 

As a research company, we are envious of the amount of “big data” that’s available to you with iHeartRadio Plus and iHeartRadio All Access.  Without going into too much detail, what are the kinds of “top-line findings” that you examine or hope to examine?  What impact do these findings have on what comes out of the speakers at iHM’s portfolio of 858 radio stations?

 

DD: It’s a treasure trove of data.  We’re making the radio listening experience more interactive, and with those interactions we see a lot about the users.  It’s very powerful info when you know which songs people love so much, they add them to their playlists.  And our broadcast programmers will have access to all the data to help them make choices about songs for the radio.

 

GM: In January, we watched as Norway started going forward with a controversial plan to eliminate FM radio by the end of the year.  As other countries eye Norway’s transition to being 100% digital, is this something that concerns iHM and the radio industry in the US?  In addition to launching these new on-demand streaming platforms, what other initiatives is iHM embarking on to meet the rise in demand for digitally distributed entertainment?

 

DD: No one can correctly predict exactly what platforms will be big five and ten years from now. So, our strategy is ubiquity.  We’ve spent the last 5+ years making sure iHeartRadio (and therefore our broadcast radio brands) can be found “everywhere”.  Radios, smartphones, automobile infotainment systems, tablets, wearables, gaming consoles, smart TVs, you name it.  Over 90 integrations so far for iHeartRadio.  If you make sure your content is everywhere, there’s less anxiety about what platforms and distribution channels will turn out to be big.

 

As iHeartRadio is poised to surpass 100 million registered users in the next couple of months, we’re set up well for big growth in the next several years.