Australian Radio Network (ARN) is introducing digital music service iHeartRadio to the market in beta today, and is backing the soft launch with more than $6.5m worth of advertising.
With outdoor, social and search marketing on top of $6.5m worth of airtime across ARN’s stations, national digital director Kate Beddoe said the investment is serious.
“There is this sense of being able to educate people about what this is, that its free and that its safe, legal and not going to put nasty viruses on your computer which people do tend to associate with streaming music from the computer.”
The localisation of the US music streaming platform is viewed as an opportunity to build new audiences outside of ARN’s 25-54 heartland, especially within the younger set.
Far from being disruptive, Beddoe said iHeartRadio – which has been active in the US for two years and boasts 115 million listening hours per month – will reinforce the network’s core product.
“What happened in the States when they launched was their digital listening actually increased by 99% and at the same time terrestrial listening held. So they have actually managed to grow new audiences and grow a new market for the products they already have,” Beddoe told B&T.
“It gives us the opportunity to increase live listening, the opportunity to grow a younger audience, which is not something we are traditionally known for, but this product in the States – 43% are aged 18-34.
“And it gives us the opportunity to really change the relationship we have with advertisers because of the deep and targeted offering that we can bring and connect that with a very mainstream push.”
The service is free and available online locally and in New Zealand. It offers live radio with users also able to create their own customised station based on their favourite artists, song or mood.
If a user wants to listen to music based on their mood or a task there are more than 850 ‘Perfect For’ stations to choose from.
From September 23 – the platform’s official launch date – iHeartRadio will be available on mobile and tablet.
From today all of ARN’s stations are available to listen to live, including Mix and Classic Hits.
On September 23 the number of radio stations available on the platform will expand to over 900 with ARN’s American sister stations and New Zealand’s TRN to be brought on board.
“What we have actually found from the US experience is that people still listen to their core one or two stations and their music habits around live radio time of day doesn’t change,” Beddoe said.
In custom a user picks their first song with iHeartRadio generating a playlist based on the familiarity setting the listener has picked. The user can also 'thumbs up' and 'thumbs down' tracks to increase or decrease the frequency, the feature also allows ARN to gather more music preference data.
“The thumbs up and thumbs down goes into your algorithm so we know never ever play to play you Taylor Swift, ever again. We also get that information for our content director, so if they start to see a track that has been particularly thumbed up then you might increase the rotation of that on air,” Beddoe explained.
“That is something that Clear Channel uses as a really powerful ongoing data point for their content directors.”
Social connection is a key feature but unlike other platforms Beddoe said it’s for the users to push through: “the default is that you can have as many embarrassing music moments as you want”.
iHeartRadio launches ad free today – some of the American station’s advertisers may come through – with a focus on building to the official launch date.
The radio streaming function will feature the station’s advertising. In custom, audio and video pre-rolls will play before a playlist is launched.
Only having pre-roll before a list is launched is about “making sure that the advertising is respectful of the mindset that we know people are in at that time”.
A major differentiator iHeartRadio has to other services is the fact it is cost-free. Other services such as Spotify and Pandora offer both free, featuring advertising, and paid for ad-free options.
“At some point the relationship changes between an ad funded one to an audience funded one. The way advertising fits in to that is quite disruptive, and deliberately so.”
‘Perfect For’ can be brand funded, in the US both Pepsi and Coke have 'Perfect For' playlists. Beddoe said this will allow advertisers to target consumers who may not come up through demographic profiling but who brands can reach via a shared passion or interest.
The data ARN will collect around music preference, age, gender and postcode will also allow advertisers to target their ads.
Beddoe said ARN was “very proud” of its strength within the 25-54 demographic but said the opportunity to capture the younger audience was “incredibly powerful”.
“Digital is not a young medium anymore. It is incredibly mainstream. But the ability of a product like this to capture the enthusiasm and imagination of a younger audience means that we know there are advertisers our there who this will really appeal to.
“The longer we can keep that connection, whether we are talking to a grocery buyer or people who are looking at soft drink, it’s incredibly powerful for us.”
In the US iHeartRadio boasts 60 million montly users, with the platform reaching the 30 million registered users milestone faster than Facebook, Twitter, Pandora and Spotify.
Locally, the target is to hit the million mark in the first 12 months.
“Given the power of what we have got to put behind that, that feels like a reasonable goal,” Beddoe added.
ARN is one of the last radio networks to bring a music streaming service to market. DMG Radio Australia partnered with Rdio in August last year and Songl, a joint venture between Southern Cross Austereo and DMD, launched in beta in March.
“I never have any problem with being second to market,” Beddoe said. “And also the fact that we are deeply embedding this into our organisation – what the other networks have is good strong relationships with separate companies, whereas this is part of the heartbeat of ARN.”
Beddoe said iHeartRadio has avoided the “unbelievably cluttered” space between custom radio and on-demand music – where Spotify, Pandora, Rdio etc sit – and sits instead in the gap between live and custom radio.