The Fine Print of iHeartRadio

Clear Channel’s had a lot of success enticing broadcasters into its iHeartRadio service. On the surface, it looks like a nice turnkey solution for radio stations which have neither the time, technical knowledge, or money to go it alone on the Internet. Just sign up for distribution through iHeartRadio and set up enough gear to send a source-stream to the aggregator.
From there, Clear Channel does the rest, providing all the front-end bandwidth necessary for your listener base and leveraging its economies of scale to put stations’ streams in front of as large of a potential audience as possible. The iHeartRadio application is a default install on a variety of smartphones, gaming consoles, and vehicle infotainment systems.
But the deal looks a lot less attractive now that we know Clear Channel requires an exclusivity agreement from the radio stations it doesn’t own to stream on its platform. Being an iHeartRadio “affiliate” means opting out of other broadcast stream aggregators – though in some special instances (like those involving select noncommercial broadcasters) this rule is bent a bit.
Although iHeartRadio’s status as a prime mover in the world of streaming is debatable, it does cast a wide shadow, and one could see how a station might take the course of least resistance to set up a stable, reliable presence online.
But it’s Clear Channel who wins in the end, with exclusive rights to a station’s online content and the ability to leverage that content into revenue via aggregation. It’s at the core of the company’s effort to move away from radio as a distinctive medium.
Interestingly, Clear Channel does not seem to actively solicit broadcast affiliates online, much less provide information on the terms of such deals. Many open questions remain: how negotiable is the exclusivity clause? Will revenue generated by the eventual introduction of advertising on iHeartRadio be shared with affiliates? If an affiliate wants to leave the aggregator, how can they do that?
Not knowing the fine print of the relationship between Clear Channel and the stations it doesn’t own seems to make affiliation with iHeartRadio a dicey proposition.