Could Apple Actually Buy iHeart?
I have to admit when I first heard about this late last night I checked the calendar to see if it was April 1st instead of November 1st. According to an initial story broken by the Financial Times, Apple is in discussion, to invest in (or even buy?) iHeart. The beleaguered broadcaster is still wading through their bankruptcy process, so I’m guessing more than a few of their debt holders would love to sell to Apple even for pennies on the dollar.
Let’s break down the two sides of this potential tie up. First, why would Apple want to buy iHeart? According to insiders their motivation could be to help their self-programmed Apple Music stations like Beats 1. iHeart’s 850 terrestrial stations would provide Apple wider distribution of its Beats 1 radio format and others to help drive usage of Apple Music. This would be similar to Apple’s strategy for buying Shazam as a way generate listener referrals back to Apple.
The ramifications of this deal for iHeart could be even more interesting. I’m guessing they’d still run advertising, even though Apple Music (and now Shazam) are ad free. Apple would most likely flip the programming on hundreds of iHeart stations to their pre-packaged formats. And you can bet they’d shut down iHeart’s streaming side since it competes directly with Apple Music right now.
I think the chances of a full buyout are relatively slim, but just the idea could cause ripple effects on both the broadcast and streaming sides of audio. Definitely keep an eye on this one!