Tencent Music Entertainment's plan to go public isn't a threat to radio broadcasting and advertising company iHeartMedia; it just means audio is in demand again, iHeartMedia CEO and Chairman Bob Pittman told CNBC on Tuesday.

"The real news is that audio is hot. We haven't seen an interest in audio like this in 20 years," Pittman told CNBC's Julia Boorstin on "Closing Bell."

Tencent's music division is set to go public with industry competitor Spotify as a backer, according to a prospectus filed on Tuesday. The music arm of Chinese tech giant Tencent plans to raise as much as $1 billion, in what could be one of the largest U.S. IPOs by a Chinese company since Alibaba raised over $20 billion in 2014.

Spotify, which owns shares of Tencent's music division, stands to profit from a successful public offering by Tencent, but Pittman, co-founder of MTV and former CEO of MTV Networks, said he isn't worried.

"We don't see Spotify as a rival; that's sort of the music collection — their ancestor was Tower Records. And we've always had a great synergistic relationship between radio, where people discover their music, and their music collection ... whether it is a stream or CD or whatever it was in the past," said Pittman.

Tencent's move, however, is a sign of good things happening in the music industry, including lots of mergers and acquisitions, Pittman said.

"Suddenly, it's between the Alexa speaker, podcasting ... streaming services — and by the way, the market seems to love it, there seem to be great opportunities, M&A, IPOs, etc.," Pittman said.

At the end of September, satellite radio company SiriusXM revealed plans to acquire music streaming service Pandora in a $3.5 billion all-stock deal. The deal would make SiriusXM the world's largest audio entertainment company, with over $7 billion in combined revenue expected in 2018, plus SiriusXM's 36 million subscribers in North America and Pandora's more than 70 million monthly active users. That's serious competition, not only for iHeartRadio, but for Apple and Amazon, as well.

Earlier this year, Sirius XM's parent company, Liberty Media, made a pass at acquiring 40 percent of iHeartMedia for $1.16 billion before withdrawing the offer in June, Variety reported. IHeartMedia had filed for bankruptcy in March.

Asked about the future of Liberty Media and iHeartMedia, Pittman said he is "excited about the future."

"Anything that brings interest to this sector is great for us," he said.

— CNBC's Sara Salinas and Michael Sheetz contributed to this report.