Hot Seat: Kate Beddoe – Managing Director iHeartRadio Australia
The Internet radio war is heating up in Australia. Clear Channel-owned iHeartRadio has launched in beta at www.iheartradio.com.au, following the arrival here late last year of its big rival, Pandora. In the U.S., Pandora is the runaway No. 1 in the space. But iHeartRadio is no slouch. In May, iHeartRadio announced it had surpassed 30 million registered users in the U.S. and the company claims 60 million monthly users.
Clear Channel launched the current version of iHeartRadio in September 2011. Its push into Australia and New Zealand is its first expansion outside the United States, where the service has a huge profile thanks in part to its iHeartRadio Music Festival, an annual event which will take place next month with a heavyweight bill that includes Justin Timberlake, Phoenix, Tiesto, Katy Perry, Muse and Elton John.
The Australian version of iHeartRadio is operated by the Australian Radio Network (ARN), a joint venture between Clear Channel and APN News & Media, and it is headed-up by Kate Beddoe Managing Director of iHeartRadio Australia and ARN Digital.
Why launch here?
For an international company, particularly a U.S. company looking to expand into Australia, there are some fairly fundamental similarities in that you’re dealing with English, so you don’t have to localise the product too much around language. There are some practicalities, from their perspective. But it’s actually the relationship that ARN has with Clear Channel that gives us to the ability to access iHeartRadio at this stage. They’re one of our 50/50 JV shareholders. That’s how we’ve been able to bring it into market.
So what’s the plan for Australia?
The first thing to know about the plan is it’s absolutely embedded as part of the core offering of ARN. It’s about having our sales team, our talent our content programmers all focused on how to extend and amplify what we’re already doing on air. And then also attracting a new audience that ARN hasn’t traditionally spent a lot of time with, particularly that 18-24 demographic. Thirty million (U.S. registered users) is a fantastic number and it’s really been driven off the growth and integration that iHeart has with the Clear Channel stations in the U.S.
So you’ll lean on ARN’s staff to fulfill your goals?
That’s absolutely right. Our sales team is the ARN sales team, our content team is ARN. That brings with it assets and the time we can commit to educating people about iHeartRadio on-air, which a lot of digital start ups would be incredibly grateful to have access to.
You used the word “educate.” Digital radio is still a relatively new medium here in Australia. How do you plan to educate the public?
Some people see this as incredibly new, some people see this as incredibly cluttered. It depends who you talk to. Once you get out of an early-adopter bubble, there is a plethora of digital music services that aren’t particularly well-known by mainstream Australians. That’s where we see the ability to use our talent through things like live reads and the education message we can read on air, where we can explain its all possible in a safe, free and legal environment.
What are your goals for the service here?
The ultimate goal is to make this a mainstream digital product. To make it something that all Australians, regardless of how technologically savvy you are, if you like music and you have an affinity for music be the soundtrack in your life, we want this to be your go-to service. Like most digital music services, we set ourselves a benchmark of having an audience of a million in the first 12 months. And I think with the power we’ll be able to put behind it with on-air marketing that is highly achievable.
Will the bulk of your marketing come via the ARN channels? Or is there a broader marketing plan?
There’s a combination of things within the marketing plan. There’s obviously our on-air messaging, and our own station website. So we reach 400,000 each month through our station site; that’s talking to the audience we already have which will be a valuable first start. We’re also looking at the way can leverage from our other shareholders. APN own APN Outdoor and have a relationship with Adshel, so there’ll be outdoor advertising. Then when we’re talking about getting to that younger audience, particularly the music fans amongst that younger audience, we’ll be focusing our social media around targeted campaigns on Facebook, Google, YouTube, basically anywhere audiences are going to speak out about particular artists. We’ll be responding in that space.
The full commercial launch happens next month. What happens between now and then?
We talk to advertisers and agencies about the potential of doing things like building custom stations for particular brands and sharing some of the learnings that we have from U.S. with a view to bringing partners on board.
It’s a tough time in advertising. How are you going to cut through the perceived softness in the ad space?
Most of the time with digital products you need to have a certain amount of rigour around them, which we’re confident we have. You have to bring real innovation to the table, and we think things like the ability to connect brands with audiences and the music they love through custom stations delivers that. You need an element of proof and rigour, and this has been a product available in the U.S. for two years, which means we’ve had a lot of learning behind that. It’s not often you get to talk about a proven media first, and that’s what clients are looking for and that’s what we think iHeartRadio has.
Pandora arrived here first. Was that the strategy, to let them enter the market and learn from their mistakes and their wins?
Look, I never have any issue with being second to market in an environment as new as something like this. There are some valuable conversations happening around the nature of custom radio and streaming music services in Australia. The most important thing is that you launch with what you think is the right product for your audience and your advertisers and we’re confident that’s what we’ve got right now.
How many channels will you have at launch?
At this stage we’ve got all the ARN channels. When we do our full launch at the end of September, we’ll also have the U.S. stations, bringing the number of stations to around 900.
Will the Australian stations feed back into the American market?
Absolutely. We’re already seeing that happen. Our stations are already available in the U.S. And we’re seeing some interesting conversations happening on social media around the edge.
We’ve got iTunes, Spotify, Rdio, Google Play Music, Deezer and many others. Is there space for everyone here in the digital music marketplace?
There’s no doubt there’s a plethora of services here at the moment. When it comes to ourselves and services like Google Play or iTunes, we’re a very different proposition. We’re much more like radio than we are music-on-demand. We don’t own your music collection. You can actually click through to buy on iTunes via iHeartRadio. We see ourselves at a very different end of that spectrum. There will be an inevitable shake up and consolidation of the number of services that are available in Australia, but you will see the services with good local media connections and a really strong international roadmap will be the ones that survive.
How important is the car to the success of your business?
In the U.S., iHeartRadio is really focused on (listening in) cars. We will see a lot of conversations happening in the States around that. In Australia, we will launch the mobile app in September for Android and iOS, and we will see usage come through there. We’re very confident that that mainstream behaviour in the car, where you’re listening to live radio because you want traffic, weather and all that local information, is something that will persevere for a long time to come.
The IHeartRadio Music Festival is a big deal in U.S. Will something like that ever happen here?
We’re a way away from being able to offer that calibre of events in Australia. Our focus is around the unique content that we will have access to – the exclusive video and stream and audio from the iHeartFestival and all the events that iHeartRadio run will be available through our channel. And we also have the ability to contest through that – if you sign up to iHeartRadio before Sept. 5, as an Australian you can go into a draw to win one of three double passes and we’ll fly the winners to Vegas. It’s about how do we leverage the amazing shows that those guys are putting on. And obviously over time we’d love to extend the brand out to include an event stream as well.
You’ve been working on this for almost a year. What have been the biggest challenges?
When you internationalise something like iHeartRadio for the first time, there are all sorts of things you need to consider, like technical considerations around how you treat location in the app, for example. Obviously it’s really important that we maintain good relationships with all the labels, and so working through the relationships with APRA, AMCOS and the PPCA. We’re just embedding it in the culture of ARN, so it’s not just something that sits to the side. And making sure that everybody at ARN feels that this part of what they do is really critical to their long-term success.