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iHeartRadio Launches Its Spotify Competitor, Powered by Napster

iHeartRadio launched its on-demand music service in beta Thursday, promising paying users unlimited streaming access to full albums and millions of songs. The on-demand service is powered by Napster, the music service that until recently was known as Rhapsody in the United States.

iHeartRadio’s on-demand service, dubbed iHeartRadio All Access, is available on Android and iOS devices for a monthly fee of $9.99. In addition, iHeartRadio is also launching a commercial-free version of its existing personalized radio service called iHeartRadio Plus for $4.99 a month. Both services are scheduled to become available on the desktop next month.

iHeartRadio’s upcoming on-demand music service is being powered by Napster, both companies announced Thursday. The cooperation gives iHeartRadio a way to quickly launch an on-demand service while helping Napster to grow its B2B business.

Napster CEO Mike Davis told Variety earlier this week that his company has seen its B2B business grow much faster than its direct-to-consumer business, with a lot of growth coming from partnerships with carriers like Sprint in the U.S. and Telefonica in Brazil.

However, Napster isn’t ready to become a dedicated white-label platform for other company’s music services just yet. “We have a very robust B2C business,” Davis said. And even with its iHeartRadio partnership, the company is keeping some brand equity: The service’s full-length name isn”iHeartRadio All Access powered by Napster.”

As for iHeartRadio, launching a subscription service is as much about taking on Spotify as it is a defensive move against Pandora, which is set to launch its own on-demand tier any day now.

iHeartRadio will promote the service through the 852 local radio stations its parent company iHeartMedia owns across the country in the hopes of convincing traditional radio listeners to sign up for a subscription plan. However, there’s little guarantee that these audiences actually do want to pay for streaming music.

iHeart competitor Cumulus tried to do the same through a partnership with Rdio last year, but ended up writing off millions because radio listeners simply didn’t bite.



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