CEO: iHeartRadio revenue 'hundreds of millions' of dollars annually
LOS ANGELES, Calif. - Clear Channel CEO Bob Pittman says online streaming service iHeartRadio makes "hundreds of millions" of dollars in annual revenue, putting it in the range of Internet radio leader Pandora.
Pittman revealed the figure in an interview about the service reaching a milestone of 50 million registered users and 97 million visitors in May. Clear Channel Communications Inc., iHeartRadio's parent company, was taken private in 2008. It reports its financial results because of public debt, but has never broken out the financial health of its digital streams.
According to its year-end regulatory filing in February, iHeartRadio averaged 143 million hours of listening per month last year, up 29 per cent from a year earlier. Pandora Media Inc., which posted $638 million in revenue last year, had 1.73 billion listener hours in May.
"We're in the hundreds of millions, not billions," Pittman said. "IHeartRadio would be a very valuable company on its own. In the grand scheme of things, it's an extension of the other businesses we're in."
Its usage growth is frequently cited in filings as contributing to Clear Channel's revenue, helping offset a decline in political ad revenue. Last year, Clear Channel's revenue was unchanged at $6.24 billion.
IHeartRadio provides digital feeds of some of Clear Channel's 835 radio stations across the U.S. to computers, Internet-connected cars and mobile devices. It also allows users to create randomly generated playlists on their own based on an artist, song or mood. Streams are free with ads.
Clear Channel has also put on concerts and awards shows with music's biggest acts under the iHeart brand.
In September, Clear Channel reached a deal with major recording label Warner Music Group Corp. to share ad revenue from traditional radio stations for the first time with artists in order to secure lower royalties on the digital side. As part of the deal, Clear Channel also promised to promote those artists more regularly. It was the largest of several deals following similar agreements with artists and independent labels such as Taylor Swift's Big Machine Label Group in 2012.
Pittman said there's no pressure to cut more such deals and noted that they currently create more expenses than benefits.
"We're investing a lot of money because we believe it's the right way to build the future," he said. "I think we'll get a payoff on it one day and we'll build a digital marketplace in which everybody wins."
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