iHeart Tunes In, but will Global?
iHeartMedia's looking more attractive to everyone
iHeartMedia is the biggest US radio operator - nearly a thousand radio stations, a well marketed app - iHeartRadio, and a strong podcast network. It’s also one of the big players in podcast consolidation, having snaffled up Voxnest, Triton and Spreaker.
As a big player, if run well, all these parts make the sum stronger. Cross-promotion, talent and technology all working together, giving them a strong competitive advantage.
The promo tie-ups of all your different activities are relatively easy to do. Some good media planning can generate real dividends, and if the tech stack’s good, it isn’t that hard to do. What’s more complicated, but potentially very profitable, is where you can use your large work force to help grow the business in new areas.
That’s why I was taken with their announcement last week that they’ve done a deal with TuneIn “the world’s leading live streaming audio service”.
Radio’s relationship with TuneIn is a little troubled, with some vacillation between them being ‘the enemy’ vs ‘a useful distribution platform’.
Many public broadcasters (including the BBC) have pulled their streams from the service, pushing for a direct relationship through their more controlled platform (like BBC Sounds). The Beeb is one of few organisations that can alter the gravity of listener behaviour, but I know many commercial operators who every so often come close to pushing the button and taking their streaming football home too.
In the US, iHeart’s stations have been off-air on TuneIn for a number of years as their focus has been growing their successful iHeartRadio app. The new announcement with TuneIn lists three key parts:
iHeartMedia’s 850+ Leading Digital Stations Nationwide Will Now be Available on TuneIn
iHeartMedia Will Become TuneIn’s Premier Local Ad Sales Representation Partner
TuneIn Taps Triton Digital to Monetize TuneIn’s Local Inventory, Helping Advertisers Reach New Audiences at Scale
It’s hard not to look at the deal to think that point 1 only happened because TuneIn agreed to points 2 and 3.
It’s potentially a great deal for TuneIn, solving a number of their problems. The app has a decent amount of inventory (it runs an ad before it plays streams from stations in its directory) but has found it difficult to sell its spots; particularly locally where US commercial radio remains strong.
The deal with iHeart solves that problem for them by outsourcing it to their massive sales force of nearly 2,000 ad execs.
For iHeart, they get more inventory for their teams to sell, as well as enhancing their digital operations. It’s also good news for Triton - iHeart’s digital ad network - as it connects up more of their advertising customers with TuneIn’s users.
With any deal, the devil is of course in the detail, but it’s definitely a sound strategy.
UK
iHeart’s predecessor - Clear Channel - had international ambitions, they were investors in Jazz FM at one point, and had the Outdoor company, also called Clear Channel. That remains here, but it’s been long since sold off by the radio group.
This time around it’s a UK company (well, er, a British-influenced off-shore one) that has its eye on the mothership. I talked earlier in the year about the family behind Global buying 8.8% of iHeartMedia - much to the surprise of iHeart’s management.
iHeart had a ‘poison pill’ in operation at the beginning of the pandemic, which meant their board had to approve any shareholder going over a 9.9% shareholding. They were worried about someone swooping in and taking advantage of any market downturn. This since expired earlier this year, leaving them open to potential targets.
Global, themselves, also have some regulatory hoops to hurdle. They’ve written to the FCC to get pre-approval to go up to 49.9% ownership. That was in April, but the FCC seems to have put their request to public consultation. No smoke has risen yet to tell us what they think.
iHeart’s response to the consultation suggested the FCC limit Global’s ownership to 9.9%. Global feel that they’re just using the FCC to re-create their own expired poison pill. They said, in response:
“granting approval at the 49.99% level will allow the Commission to maintain neutrality in a potential disagreement between a company and its shareholders, while serving the foreign investment goals that iHeart itself has touted.”
It’ll be interesting to see how or if these “potential disagreements” are resolved.
What is for sure is that iHeart’s developments, including this new TuneIn deal, fit very nicely with Global’s digital audio ambitions with DAX, as well as both being dominant in live radio and the two companies growing strength in podcasting. Together they would be quite the global audio company.
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