iHeartRadio is preparing to launch a new on demand music streaming service to compete with rivals Pandora, Spotify and Apple Music. A new report indicates that the streamer's parent company iHeartMedia has inked deals with at least two of the three major music labels to provide content for the new service, which is expected to debut early next year.

It looks as if another big player in the streaming music space is expanding to include an on demand version. We recently reported that Pandora is readying a new on demand service to complement its current radio based music streaming service, and has signed agreements with all three major record labels, Warner Music Group (WMG), Universal Music Group (UMG) and Sony, to provide content for the new streamer. In addition, Pandora improved its $5 monthly ad free subscription offering to include more skips, replays and offline listening options.

Now, iHeartRadio, which is widely considered the most direct competitor of Pandora, appears to be following suit with its own on demand streaming service. Reportedly, two new options will be made available to listeners in Q1 of 2017, and iHeartMedia has already inked deals with at least two of the three big music labels in preparation for their debut.

The two options appear to mirror those of Pandora's. A mid-tier offering known as iHeartRadio Plus will feature ad free listening, while the top tier, known as iHeartRadio All Access, will be similar to current on demand streamers Spotify and Apple Music. The pricing is also expected to follow that of Pandora's new offerings, with the mid-tier going for $5 monthly and the top tier costing around $10 a month, which is the same price that Apple Music and Spotify charge their subscribers.

While iHeartRadio doesn't garner as much press as its rivals, it has quietly become a powerhouse in the streaming wars. Last month the streamer announced it has 90 million registered users. Until now, the service has been completely free for all subscribers, and its current free option will remain intact. iHeartRadio is unique among streamers in that it offers listeners access to hundreds of live local terrestrial radio stations operated by its parent company, once known as Clear Channel.

It remains to be seen exactly how the $5 ad free tier will function. As each local station on iHeartRadio broadcasts the same commercials that are aired live on their terrestrial counterparts, it is unlikely that those ads can all be edited out in real time. We'll continue to bring you more details as to how the new streaming services will work as soon as they emerge.

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