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.
Not to pick on only one outfit, but iHeart is bereft of content (read: “Talent”)?
Anybody else appreciate the colossal and staggering absurdity of that?
Anybody else care?
Anybody?
Name all the local talent at Apple. Anybody?
A thought experiment…
Apple buys iHeart, then SiriuxXM, integrates both with Apple Music subscriptions, plus CarPlay in new cars.
Model: TV has gone from over-the-air to subscription via a cable stage. Apple can take radio through the same, skipping the intermediary history.
Apple could throw some science at getting “content” (broadcasts, streams, podcasts) on car radios, computers, phones and smart speakers to drift seamlessly from one to the other. Imagine that, and you have the endgame in sight.
FYI: Liberty Media owns 69% of SiriusXM, and is also on the list of iHeart investors. So Apple won’t be buying Sirius. However, the idea of both Apple and Liberty (who also just bought Pandora) having a stake in iHeart is very interesting. Also remember that Apple is not really a content company. But they’d like to be. One other thought is iHeart could be for Apple what Whole Foods is for Amazon.
There is not a lot of worthwhile indigenous content on iHeart, and that diminishes significantly the value of iHeart to Apple. Pittman has done a decent job of setting up the iHeart app as a distribution platform, but not so good on the content side. Once you get past Ryan Seacrest (and his radio ratings have been declining), there are no breakthrough “stars” on the iHeart stations, since iHeart has done a lot of voice tracking on their stations, using the same voices in multiple markets. As for the music, that same music is available on multiple competitor platforms, and the same for the sports. So iHeart has value from a distribution standpoint, but Apple would need to significantly invest in and grow the indigenous content.
“There is not a lot of worthwhile indigenous content on iHeart”
Yet somehow the iheart stations are among the highest rated stations in most of the major markets they’re in. That’s local radio. Then add all the syndicated hosts at Premiere, with Rush Hannity and Beck, Ryan, Elvis, and Steve Harvey. All top rated in their field. These are people with high name recognition. Apple paid billions for Beats just to get one name. And he’s gone now. They’ve created their various iHeart awards that have very favorable relations with artists and major labels. Apple needs help there. Take another look. You’re allowing your dislike of the company to color the facts.
Lol, Paul. Anyway iHeart suits had better hope that Apple doesn’t decide to take over iHeart, because you know that Apple will clean house at iHeart. Because no way will the cultures of both companies match. For one, iHeart is a top down management company whereas Apple is a collaborative culture. Apple would probably integrate iHeart app components into Apple Music, keeping the latter. And the FM’s would obviously become Apple focused. Apple could buy iHeart assets with their petty cash lol, and not miss a beat (no pun intended), so this matter should be a cause of concern to iHeart execs. Although Pittman and his execs have golden parachutes so either way they will be ok.
Very simple. iHeart is the only thing that starts with a lower case “i” that Apple does not own.