by TALIA LEVY and VALERIE POWELL
200 East Base Road
San Antonio, Texas
iHeart Media was originally founded in San Antonio, Texas under the name Clear Channel Communications. The company was founded by Lowry Mays and B.J. McCombs in 1972. In 2008, the company became private by a leveraged buyout through Bain Capital, LLC and Thomas H. Lee Partners.
iHeartMedia has the widest reach in America for any radio or television outlet with an audience of over a quarter of a billion listeners each month. The company currently covers 150 of the U.S. markets with 858 broadcast radio stations. iHeartMedia delivers a variety of content including music, talk shows, news, and sports through broadcast stations, satellite, online, via smartphones and via live shows. iHeartRadio currently has 92 million registered users with a year-over-year growth of 22% with an increase of 8% in total listening hours. As of September 30th, cumulative upgrades and downloads have reached a new record of 1.1 billion .
For the second quarter of 2016, iHeartMedia’s loss widened to $278.89 million due to billboard sales in Turkey that expanded the ongoing debt $56.6 million. The loss was more than five times the amount of 2015’s second quarter loss of $54.66 million . Even though there was a large loss in the second quarter, the company is still generating revenue in the third quarter of 2016 for a total of $857.1 million. Due to a growth in network business and the Presidential Election, digital advertising and broadcast radio primarily drove the growth in revenue of $10.2 million (1.2%) from the previous year’s third quarter revenue .
The increase in revenue allows iHeart to stay on top of their current debt of $20.78 billion as of June 30th, 2016. The large debt is mainly due to a buyout in 2008 by two Boston private-equity firms, allowing them to gain 70% of the iHeartMedia Company. Debtwire senior credit analyst, Seth Crystall, explains that iHeart is a “powerful brand” and will continue to increase revenue to make up from their current losses by the transformation of their listeners to their mobile app .
iHEART MUSIC FESTIVALS
The iHeart Music Festival Tour is iHeartRadio’s biggest live musical event, generating a large income for the company, with a portion of the ticket profits going towards the Ryan Seacrest Foundation. iHeartMedia’s President of National Programming Group, Tom Poleman, says, “Fans wait all year to hear who will be playing this tour and we’re thrilled to announce an impressive lineup” . The concerts are held in major cities throughout the country by the iHeartRadio stations in those areas. The Jingle Ball Tour is iHeartRadio’s biggest musical event, generating a large income for the company. The tour is sponsored by Capital One, which allows card holders to gain early access to tickets before going to the general public .
The live iHeart Radio concerts are a mutually beneficially event for both the artists involved and iHeartMedia. For example, most recently the artist The Weekend celebrated the release of his new album Starboy in Toronto by headlining the iHeartRadio Canada Jingle Ball. Thirty minutes of his live set was broadcasted on the iHeartRadio App, along with 112 of iHeart Media’s radio stations including KISS in Los Angeles and Z100 in New York . The iHeartRadio Jingle Ball in Toronto also included performances by major artists such as Niall Horan, The Chainsmokers, and Alessia Cara.
 iHeartRadio celebrated One Direction’s 2013 album Midnight Memories with a special release party.
Recently, iHeartRadio expanded into Canada with the collaboration of North America’s fastest growing digital audio service, Bell Media . Canadians now have instant access to stations and to free streaming channels via iOS, Android apps, and at iHeartRadio.ca. iHeartRadio Canada uses content from Bell Media, which has over 105 licensed radio stations and 100 streaming channels . With the expansion into Canada, iHeartRadio’s Jingle Ball will now be present in Toronto.
This part quarter iHeart partnered with Hispanic radio legend Enrique Santos, to create a new Hispanic initiative to develop new programming content for iHeartMedia across their various platforms. This new initiative recognizes the increasing size of the the U.S. Hispanic community that are both English and Spanish speakers, as well as utilizes Santos’ popular reputation within the Latino community .
Building off of this new initiative, just this past November iHeart celebrated the best in Latin Music at the iHeartRadio Fiesta Latina. They partnered with Telemundo to air the exclusive TV special and streamed the event live on Telemundo.com. Telemundo is an American-Spanish language television network owned by Comcast through NBCUniversal . The event broadcasted live on iHeartMedia Spanish-Pop, Tropical, regional Mexican and Spanish Adult Hit radio stations all across the country .
This coming January, iHeartMedia will be launching a new On-Demand music streaming service, that will put them amongst competition of services like Spotify and Apple Music. The iHeartRadio All Access service will offer its subscribers unlimited on-demand listing to over 30 million songs. They will also offer a cheaper option, iHeartRadio Plus, which will gives its subscribers the ability to instantly replay songs they heard on iHeartRadio stations, through the app. According to iHeartRadio,the company has not yet decided how to price the two new services. However, $9.99 a month has become an industry standard for full on-demand subscriptions services. iHeartMedia earns most of its revenue through on-air advertisements, which they still will continue to air, despite the new revenue from the subscription service.
iHeartMedia is not the only major radio based company making the switch, Pandora is creating its own on-demand based product estimated to cost $4.99 a month in the near future . According to iHeart, iHeart All Access will “include a full on demand music collection experience – but one still tied directly to radio.” the company said. When listeners hear a song on the radio that they like, for the first time ever they will be able to replay that song or even save it directly to their playlist.
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