iHeartRadio is foreseeing dark days ahead. The largest operator of radio stations in the U.S. is in a massive hole of debt. The company announced in its most recent SEC filing that it expects to continue to have negative cash flows. iHeartMedia Inc officials say that the firm is on the verge of collapse despite a $24 billion buyout by private equity backers just nine years ago. Its stock price is dropping and investors are wary of the company’s survival. How does the top radio station firm go from the best to probably being non-existent within the next few years?
In 2008, Clear Channel Communications renamed itself iHeartMedia to show how prominent the digital side of the business had become and showcase themselves as a multimedia platform. They launched the iHeartRadio app and worked hard to compete against new competitors like Pandora, Spotify, and Sirius XM radio. The advertising side faced new digital competitors like Facebook and Google. iHeartRadio festivals remained popular, but in the age of streaming, the company has struggled. It’s unclear what the collapse of iHeartRadio would mean for the music industry. Their app has been downloaded more than one billion times with 100 million registered users. They maintain 250 million monthly listeners in 150 local markets through 858 owned radio stations. What do you think will happen to the music industry if iHeartRadio doesn’t survive?