Radio New Zealand and NZME embark on public/private partnership with iHeartRadio deal—UPDATED

The Campbell Live saga has shown that commerce and current affairs often make uneasy bedfellows. But across on a different medium, the publicly funded Radio New Zealand and the commercially minded NZME are jumping into bed, with iHeartRadio now streaming Radio New Zealand National, Radio New Zealand Concert and Radio New Zealand International. And both sides think it’s a win-win.

NZME’s group strategy and operations director Carolyn Luey says with Radio New Zealand recognised for its high quality and diverse programming, the partnership adds even greater depth to the existing local selection of stations and further strengthens its position as the country’s leading digital streaming offering. And Radio New Zealand spokesman John Barr says it works for Radio New Zealand because its objective is to get its content to as many people as possible on a number of different platforms. 

Radio New Zealand’s chief executive Paul Thompson says iHeartRadio has over 300,000 registered users in New Zealand, with 56 percent of them being under 35 years of age. 

“This provides Radio New Zealand access to a younger audience by delivering high quality content to new audiences,” Thompson says. “We see adding our stations across multiple platforms as a significant enhancement of our services and partnerships such as this with iHeartRadio are a great way of distributing that content.” 

While it’s hard to believe those three Radio New Zealand stations being in the most popular station lists among the young’uns, Barr says it’s critical if it is to reach its stated goal of doubling its audience in the next five years. He says it’s confident it can grow its live audiences, but most of that growth will have to come through digital channels (this partnership won’t impact any of its other streaming offerings through the website). 

Barr says there are no contractual restrictions around selling advertising on the platform, but Radio New Zealand will retain full editorial control. No money changed hands in the deal. But Barr says Radio New Zealand will be given access to the audience data. 

NZME says iHeartRadio won’t be selling advertising around the three channels “at this stage”. But there is display advertising space available around the streams on iheart.co.nz and while it’s currently running a house ad, the bigger the audience, the more NZME can charge for it. 

When iHeartRadio first launched in New Zealand in 2013, it was initially thought it would primarily serve as a digital platform to stream NZME’s radio stations. However, Luey told StopPress recently that it offers much more than this.

“iHeartRadio is about more than just hosting our stations; it’s very much a content platform,” she says.

In addition to hosting NZME Radio’s brands, iHeartRadio also has over 50,000 podcasts (both local and international), a host of digital-only radio stations and it recently launched in-store retail streams at Paperplus and Health 2000. These bespoke in-store radio streaming services give NZME an ongoing stream of revenue, but Luey explains that iHeartRadio can also be used on a campaign basis.

“We did a campaign with Auckland Museum last year, which was focused on one of their exhibitions,” she says. “They uploaded all their podcasts and then they encouraged people to listen to iHeartRadio as they walked around.”      

Luey explains that a major benefit of iHeartRadio is that it offers a nimbleness that previously wasn’t available through traditional broadcasting.           

“To set up a terrestrial station is tricky, but to set up a digital station targeted at a young audience, at a rock audience or at a pre-school audience is quite cost-effective, and you’re just giving your audiences more choice around what they listen to.”

This has already seen iHeartRadio set up niche channels such as the Alternative Commentary Collective, Kiwi Kids and New Zealand Top 40, and each of these additions offer new commercial opportunities for NZME clients.

One of the more interesting aspects of iHeartRadio’s commercial model is that it does not sell tickets for the concerts that it hosts. Thus far, theses events have been free of charge, with listeners having to enter online competitions through the platform to win tickets to attend (previous events have included Lorde, Birdy, Jessie J and Ed Sheeran).   

“Our event strategy is very much about positioning iHeartRadio beyond a digital platform as an entertainment brand. And so [concerts]are a key part of strategy in terms of building brand awareness. And we leverage sponsors, who have similar objectives to us. So we work with them to put on these events.”

But bringing acclaimed international artists to New Zealand isn’t cheap. And this when viewed in conjunction with all the investment that NZME has put into the platform brings into question whether or not it is profitable.

“It’s moving into being profitable* … [and]it’s on track to achieve its business case that was set when it was launched,” says Luey. 

*Clarification: NZME has pointed out that iHeartRadio has in fact turned a profit and continues to do so. NZME finance director Ian Hempleman released the following statement: “I can confirm that iHeart Radio delivered a profit during the 2014 financial year, and has continued to deliver a profit during the first 3 months of 2015.” 

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