The Financial Times reported earlier this month that Apple held talks with iHeartMedia, an American radio company, about investing in the radio company this year. iHeart Media has faced looming financial troubles and filed for bankruptcy, but nonetheless has remained the largest, most popular radio station owner in the country with over 850 FM and AM radio stations.
While no deal has yet been formally announced, it appears that Apple may be considering different options such as buying a stake in the radio company and signing a marketing partnership to leverage iHeartMedia’s experience in traditional radio to help promote Apple Music and Beats to their established audience of 120 Million registered users. iHeartMedia has also actively embraced apps, with both Apple and Android versions available for smartphones, tablets, desktop computers, laptops, automotive displays and even Apple TV.
Earlier this year, Apple acquired music recognition app Shazam for $400 million, to improve Apple Music’s recommendations and a few other smaller purchases by acquiring radio app Swell for $30 million and Semetric, a data analytics company that runs the Musicmetric tool for an undisclosed amount. Musicmetric was launched in 2008 to track data on sales, BitTorrent downloads and social networking statistics for their artists.
iHeartMedia went private via an $18 billion leveraged buyout before the financial crisis of 2008 at a time when millions of Americans still listened to old fashioned, land-based radio. While iHeartMedia made $3.6 billion in revenue last year, and stated that it reached over 270 million people a month on the radio and 100 million users via its streaming radio and music service, it still struggled with debt for a long time. The company paid $1.4 billion in interest last year. iHeartMedia also has had other interested investors such as John Malone’s Liberty Media that pulled their investment offers of over $1 billion after the company failed to meet their expectations.
As radio listeners increasingly turn to online options, iHeart Media could bridge the gap for Apple in reaching these audiences. This in turn could help Apple convert these audiences to Apple Music users. Apple Music’s user base has also grown each year, up to 56 million subscribers in November, a six million increase in subscribers just from May. Apple Music is now the largest music streaming service in use in the United States, surpassing Spotify. Spotify however has the largest number of subscribers worldwide at over 87 million subscribers worldwide for its service, and 191 million monthly active users as of November 2018.