Can you imagine Tim Cook hopping on his private jet and heading to Biloxi or Toledo to check in with management to see how those iHeart clusters are doing? Probably not. It’s more likely, if there is interest from Apple, it has to do with adding Apple Music on iHeart’s massive platform and access to music labels.
The Financial Times, which broke the story Thursday, said the discussions are preliminary and no deal has been made.
The Times says while iHeart may be looking for financial help as it works itself out from under $20 billion in debt through bankruptcy, Apple maybe kicking iHeart’s tires as a way to better compete with Spotify.
The paper says a partnership “could see Apple Music’s Beats 1 radio station, which is only available through its apps, make its debut on broadcast radio.” iHeart is turning podcasters into broadcasters so that assumption doesn’t seem too crazy, when you think about it.
A music industry executive in the story looks at this move as a power play by Apple, stating they are always looking for more exclusive deals or early releases with artists and labels. Because of its scale, iHeart certainly has sway with the labels and the ability to put one song on hundreds of stations with the snap of a finger (SEE BOHEMIAN RHAPSODY).
Apple Music, which launched in 2015, has about 50 million subscribers here in the U.S., however Spotify has over 80 million worldwide, according to The Financial Times. Apple did spend some of its pocket change to buy Shazaam in late 2017 ($400 million) to enhance the Apple Music service. When the purchase was announced, VP of Apple Music Oliver Schusser said, “With a shared love of music and innovation, we are thrilled to bring our teams together to provide users even more great ways to discover, experience, and enjoy music.” At that time, there was also speculation that part of the reason for the Shazam purchase was to block referrals to Spotify. Could some sort of partnership with the iHeartRadio app and Apple Music be in the works?
FT reports through its sources that iHeart is hoping Apple will take an equity stake worth tens of millions of dollars, or the relationship could wind up bringing a multimillion-dollar marketing partnership rather than a direct investment.
So far iHeart has had John Malone’s Liberty Media, and now Apple, taking a look under the hood. iHeart is hoping to cut its $20 billion in debt in half when it emerges from bankruptcy.