iHeartRadio is giving paid streaming music a spin

iHeartRadio, the digital arm of the biggest traditional radio company in the US, will launch two paid options in January, going up against Spotify, Apple Music and Pandora's revamped subscriptions.

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Joan E. Solsman
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Kevin Winter, Getty Images for iHeartMedia

iHeartMedia is the latest to enter the heated race for digital music subscribers.

The company, the biggest radio company in the US, said Friday that its free iHeartRadio app will add two paid tiers in January. iHeartRadio currently offers live streams of the company's traditional radio stations, "artist-based" stations similar to Pandora, and other audio entertainment like podcasts.

But iHeartMedia CEO Bob Pittman vowed iHeart's coming services won't be "me too" offerings. They'll enhance the capabilities of iHeart's long legacy in radio, he said.

"If somebody thinks it feels like Spotify or Apple Music, then we've failed," Pittman said in an interview last week.

iHeart is joining an intensifying battle to lead streaming subscriptions, the music industry's presumed business model for the foreseeable future. In the last three years, consumers have quickly shifted from buying specific music piecemeal to paying a fee for access to buffet-style tunes. The US record industry's revenues from streaming -- mostly subscriptions -- eclipsed downloads for the first time last year. That growth has stoked competition among the platforms racing to deliver music to paying subscribers.

Paid subscriptions at iHeart will have two tiers: Plus and All Access. iHeartRadio All Access will include the ability to search for a song to play on demand, like Apple Music or Spotify. It will also feature offline modes for listening when users lose a network connection, as well as song replays, unlimited skips and saving a song to a playlist, which are perks meant to enhance its radi0-style format.

The Plus tier will have some of those features, but not all. iHeart wouldn't specify which perks are for All Access alone. iHeart added that it has secured deals with the three major labels.

The company also wouldn't specify pricing for either subscription yet. The New York Post reported this week that the tiers would be priced at $5 and $10, citing unnamed people familiar with the matter. Offering $5 and $10 levels would be in keeping with the prices that the music industry has largely stuck with in cobbling together agreements with streaming companies.

The announcement comes one week after Pandora, the leading all-digital radio service, unveiled a revamped $5 subscription with some of those features, a precursor to a $10 on-demand membership that it plans to launch before the end of the year. The new $5 Pandora Plus strips out adds, has unlimited skips and replays and sets up offline modes.