iHeart, traditional radio titan, takes on Spotify too

The terrestrial radio giant launches two music subscriptions: $5 to replay or skip songs and $10 to unlock all-you-can-eat tunes.

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Joan E. Solsman
3 min read
Kevin Winter, Getty Images for iHeartMedia

The lifeblood of iHeart is still radio, now pumped with options for the digital age.

iHeartMedia, the biggest terrestrial radio company in the US and operator of online service iHeartRadio, launched two streaming memberships in a beta "test" mode Thursday, giving customers ways to unlock more access to tunes.

A $5-a-month "Plus" membership lets you replay songs you hear on a station's live stream, listen offline and skip songs in a digital playlist. A $10-a-month "All Access" subscription opens up a full buffet of all-you-can-eat music.

The move throws iHeart into an intensifying competition for streaming-music customers. In the last three years, consumers have shifted from digital downloads to memberships that charge a monthly fee for unlimited access to tens of millions of songs. The change has made subscriptions the music industry's dominant sales model and lifted revenue for recorded music to its best growth since the age of the CD. That growth has stoked competition among the tech companies racing to deliver music to paying subscribers.

Pandora, iHeartRadio's main competitor in digital radio, is in the midst of rolling out similar services. In September, it began letting any nonpaying listener skip or replay songs, and it launched a $5 membership, also called "Plus," that stripped out all advertising and that caches several playlists to allow listening offline. It will launch a full, play-whatever-you-want subscription this month. Pandora has about 78 million monthly active listeners.

iHeartRadio doesn't break out how many digital listeners it has, instead lumping its online audience with its vastly bigger terrestrial radio audience at more than 250 million monthly listeners. Working to iHeart's benefit is the marketing machine of the biggest terrestrial radio network in the US -- and the fact that most people still say the primary place they discover music is radio.

Executives at iHeart said the company's new memberships are meant to make radio truly interactive, rather than simply adding a search-and-play box to a bunch of playlists, like competitors.

"There's nobody else that can combine the radio and the collection," said Darren Davis, president of iHeartRadio, in an interview last week. "It's impossible. They don't have the live radio."

(Apple Music, a $10-a-month music subscription service, has a single 24-hour global live radio channel, Beats 1.)

iHeartRadio Plus lets $5 subscribers instantly replay songs from the radio and then return to the live station in progress; save songs to a MyMusic playlist; use a track as the seed for a custom station and hear that specific track first; and skip an unlimited number of songs on non-live stations.

iHeartRadio All Access gives $10 subscribers the same perks, plus they can build personal music libraries by creating and reordering their own playlists, listen offline and play any song they like without caps or limitations.

The All Access tier overlays the service Napster on top of iHeartRadio's framework. Napster runs its own subscription service but offers white-label services to companies that want to add on-demand streaming.

The two tiers are available now in beta for Apple iOS and Android devices. They'll be fully available on mobile and desktop in January, the company said.