With the Iheart or Tunein app (and some others) as you say you can listen to virtually any station free if at home and on Wifi. And if that's all you want there is no reason to pay money. You can listen to any station if mobile though it uses data so your plan can come into play as well as the signal.
But Another part of it is songs you have put together and listening off line. Playlists of songs is one of the most used functions and people want to be able to listen when they are in places with no signal, or don't want to use up their data. Paying for Iheart radio for example allows you to download music to listen to anytime not just listen to stations. An Amazon Prime subscription for all their services includes listening to music, downloading it etc. And with Alexa there is even more flexibility. You can download by putting songs on your device yourself if it has storage but you have to get the songs from somewhere and that means buying them otherwise for the cost of the subscription using services like Amazon, Iheart etc you can download any/all songs you want to listen to.
Satellite radio provides music, talk, news (FOX, CNN,) live sports, ESPN channels,comedy etc as part of the subscription. For those that follow teams that is a huge plus if you are not home alot especially or if you don't live where your team is. There are no blackouts so I can listen to a Red Sox game when traveling or in Florida. And it can be done not just in the car but online or with Alexa too. When traveling it's no small thing to have favorite stations/specialty stations you listen to wherever you are without commercials (for music channels) or constantly hunting on the dial. So for me that cost is well worth it. No data charges on the phone for going over, virtually no loss of signal etc....
