The multimedia conglomerate faces $20 billion in debt.
iHeartMedia, which owns 850 radio stations, has filed for Chapter 11 bankruptcy. In a statement released Thursday, iHeartMedia Inc. said it will continue its day-to-day operations as usual, which means that you won’t need to change your car radio’s presets just yet.
The company is in $20 billion of debt due to a buyout that occurred a decade ago which might be hard to rectify. The company has been having a hard time thriving as streaming options continue to eat into terrestrial radio revenue.
How does this affect you? Well, it doesn’t.
iHeartMedia Executive Vice President of Communications Wendy Goldberg told Gizmodo that “iHeartMedia, iHeartRadio, and all our stations are operating business as usual, and listeners and fans won’t notice any difference in the programming, on-air personalities, and stations they love…”
No matter how much the radio conglomerate flaunts their success in terrestrial radio, they still are miles behind in the race for streaming king. Companies like Spotify and Pandora are eating into iHeartMedia’s bottom line, and into their consumer base. Users like to be in control of the moment, not to be spoon-fed the same pop hit every 35 minutes. But even with streaming’s massive consumer base and popularity, they might not even be succeeding to the level we’d assume.
According to Gizmodo, Pandora, with its 5 million paid subscribers and 74 million active users as of 2017, has been struggling financially. It lost $343 million in 2016, and $518 million in 2017. Spotify, which filed to go public earlier this month, posted a loss of around $1.5 billion in 2017 and has never turned a profit, even with its 39 percent increase in revenue from 2016 to 2017, according to the Wall Street Journal. The company claims it will achieve profitability, but neglected to mention how many users it would need in addition to its current 71 million paying customers it had at the end of 2017.