Napster to power iHeartRadio’s on-demand streaming service

Napster is becoming one of the most intriguing – and unorthodox – streaming services in existence.

For one thing, it turned a profit in its last quarter.

According to a quarterly filing from RealNetworks, Napster posted a $1.63m net profit in the three months to end of September – following some rigorous staff cutbacks under new CEO Mike Davis.

At last count, December 2015, Napster had just under 3.5m subscribers – less than a tenth of Spotify‘s number today.

Still… eat that, Daniel Ek.

Napster

Now, Napster has signed a deal which could put a rocket under its ambitions.

The company – previously called Rhapsody/Napster – is going to power iHeartRadio’s on-demand, $9.99-a-month streaming service, iHeartRadio All Access.

Currently, the iHeartRadio app offers access to 850+ live local radio stations.

In August, it surpassed 90m registered users – up from the 80m it announced back in January.

And it’s going to try to upsell all of them into paid-for streaming.


iHeart has just rolled out its two new streaming tiers – All Access and a $4.99-a-month offering called iHeartRadio Plus – in beta in the US on iOS and Android.

The fully-fledged launch will arrive in January.

“At Napster, our focus is on partnering with companies across verticals that share the same passion for creating great customer experiences and powering emotional connections every day,” said Mike Davis, Napster CEO (pictured).

“Adding iHeart to our portfolio of world-class partners is an honor.

“We’re excited to work with iHeart and other industry partners including UMG, Sony WEA and the indie music label community to help grow the proliferation of streaming music and reach more people with music beyond our traditional D2C business.”

Darren Davis

“The Napster team is a great partner for us, and with their technology capabilities, scalability of their platform, flexibility and deep knowledge, we can deliver a best in-class on-demand music streaming service.”

Darren Davis, iHeartRadio

What’s particularly interesting about the agreement from iHeart’s side is that Napster is fully licensed – meaning iHeart can avoid the financial pain suffered by rival Pandora in directly gaining licenses from all three majors and the independents.

For that reason, it seems to be a sign of a company dipping their toe into on-demand; seeing what conversion rate it can achieve before committing to building its own systems (or acquiring a company like Napster…).

Pandora is building its own on-demand service on top of Rdio’s technology, due for launch in early 2017 – having missed its scheduled Q4 2016 window.

“We’re excited to launch our new services in beta today and introduce on-demand features and functionality to the mass market like no other service available,” said Darren Davis, President of iHeartRadio.

“The Napster team is a great partner for us, and with their technology capabilities, scalability of their platform, flexibility and deep knowledge, we can deliver a best in-class on-demand music streaming service to our hundreds of millions of listeners across the country.”Music Business Worldwide

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