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iHeartRadio launches on-demand music service: RAIN Review and competitive outlook

As promised in September, iHeartRadio has launched its two-tiered subscription product: iHeartRadio Plus, and iHeartRadio All Access. Both are being rolled out in beta, with a free 30-day trial. The two major mobile platforms, iOS and Android, are in the launch. Availability of the beta trials will roll out quickly but not instantaneously. iHeart gave RAIN News beta test access to review the services.

Napster Partnership

Interestingly, and unknown before today, Napster (formerly Rhapsody) is providing the back-end infrastructure for the All Access on-demand service. This partnership seems like a win-win: iHeart doesn’t have to build a proprietary technology platform, and Napster gets the licensing and a burst of publicity.

ihr-replay-and-saveFeatures of the Two Services

Today’s beta release clarifies how new features are distributed between the two services, information that was withheld when iHeartRadio first revealed the features it was working on.

iHeartRadio Plus:

  • Unlimited skips when listening to internet radio streams
  • Replay songs from live radio
  • Save songs from live radio

Those two live radio features, replaying songs and saving songs from terrestrial webcasts through iHeartRadio, is the outstanding differentiator in this venture. “We created the first service that uses on demand functionality to make radio truly interactive,” iHeartRadio President Darren Davis said. The feature is significant inasmuch as the separation of linear listening in terrestrial radio and interactive listening in music services has, for years, defined the overall consumer trend to personalized audio. iHeartRadio is essentially breaking apart the rigid linear nature of traditional radio by allowing users to replay radio songs, and even lift them out of radio into playlists.

Here’s another way to think about it. Consider this meme, which RAIN News and RAIN Summits have explored: Are playlists the new radio? iHeartRadio’s new feature removes the separation and reverses the meme. Radio can literally be the playlist.

iHeartRadio All Access:

The higher-priced service includes all the Plus features, and adds offline storage and all the music collection and organizing features that you expect in a fully on-demand service. iHeart has not specified the size of its music library except to say “millions.”

Pricing

iHeartRadio Plus is $4.99/month. iHeartRadio All Access is $9.99/month. Those two pricing levels are settling into the marketplace as standard for semi-interactive and fully interactive online service.

When subscribing through the Android app, we discovered inflated pricing that would take effect after the 30-day trial: $5.99/month and $12.99/month. A spokesperson for iHeartMedia confirmed that the higher price is a surcharge added by Google’s Android app store for in-app purchases, and gave us this statement:

“iHeartRadio Plus is $4.99 and iHeartRadio All Access is $9.99. App stores charge a transaction fee for purchases made through their services. We recommend that users take advantage of our 30-day free trial and then purchase directly through iHeartRadio.com once our services launch on desktop in January, this will eliminate the service fees and will allow users to enjoy the service across all devices.”

Using the Services

Replay and Save buttons appear on the station screen when a song is playing. They work flawlessly in our testing. As a default, saved songs are dumped into a playlist called My Music. You can also create new playlists for sorting saved songs.

Replay can be invoked in mid-song — for example if you enter a radio station stream while a song is playing. The replay starts the song over, then puts you back in the station stream when the song is finished. Touching Replay also brings up previously replayed songs, and you can give them another listen.

Music collection and library functions are in the MY MUSIC tab on the Home panel. Overall, the app design is intuitive and clean. A little poking around can make anyone fluent with the power features in short time.

The Business Outlook

At the end of 2015 we predicted that competitive crowding would be a 2016 trend. That seems even more true as a 2017 outlook. Pandora is revealing (though not necessarily launching) its anticipated on-demand service next week in a New York media event. (RAIN will be there.) Amazon built an interactive music service with multiple access and pricing levels. Google’s on-demand platform has made important technology improvements. Spotify is constantly innovating its music technology and growing its industry-leading subscriber numbers. Apple Music continues to enjoy its ecosystem advantage to grow a user base quickly. Napster even took advantage of today’s iHeart partnership to introduce new features in its own on-demand app.

iHeartRadio has two advantages in today’s bold launch. One is the national footprint of 850 radio stations that will exert an immense awareness effort — that structural upper hand helped build iHeartRadio to 90-million registered users since its launch.

The other advantage is clear differentiation in the radio Replay and Save functions. To the average consumer, music services appear identical to a large extent. iHeartRadio might be afflicted by that perception, but breaking apart the linear stream of radio is a very interesting feature in what has always been an interesting (and, in our view, underrated) app.

Time will tell how this fares. Onward to the future.


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