By CultureBanx Team
Apple held talks about buying a stake in iHearMedia
Black people spend more than 13 hours a week listening to the radio
Apple (AAPL -6.63%) could be attempting to build closer ties with black radio listeners by taking a stake in iHeartMedia, a network that’s extremely valuable to the music industry and commands considerable power. The two companies have reportedly held talks ahead of the broadcast radio conglomerate’s reorganization bankruptcy filing plan, according to the Financial Times.
Why This Matters: Even with its mounting debt and impending bankruptcy filing, iHeartMedia has a crushing grip over the radio industry with over 850 stations. Nielsen research found black people spend more time listening to the radio than any other ethnic group averaging more than 13 hours a week, making them a prime target for Apple’s radio expansion dreams.
If a deal were to manifest between Apple and iHeartMedia, the Financial Times noted Apple Music’s Beats 1 radio station, which is only available through its apps could debut on broadcast radio. African American listeners are right in the sweet spot of iHeartMedia’s reach of more than 270 million people a month on the radio, and Apple may want a piece of that market.
Not to mention, Nielsen reported black people spend $173 each year on purchased music, exceeding the total population which averages $156 annually. This means Apple has a chance to easily convert these radio listeners into paying music customers.
Apple’s huge cash pile has led to M&A speculation since they now have more than $237 billion at their disposal. This is more than enough money to cover the $20 billion of debt iHeartMedia has agreed to pay its creditors.
Situational Awareness: The discussions between these two companies remain at a preliminary stage and no deal has been agreed. Neither company, Apple or iHeartMedia has commented on the matter.
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