It may take nine months to know whether the COVID-19 lockdown brings a baby boom, but it is already clear that the birthrate of new podcasts has picked up during the past few months. Chris Spencer, CEO of Libsyn parent Liberated Solutions, says that has been a windfall for his company in an otherwise challenging business climate.
“As all of us will be spending more time within our homes and telecommuting in the coming months, we expect to see an increase in podcast creation and new customer signups using the Libsyn platform,” Spencer said during a conference call on Wednesday. “In fact, we have been very fortunate to see a continuation of 2019’s growth with an increase in new podcast signups in the first quarter, with April being our second-best month for signups on record.”
Libsyn has not yet released its first quarter tally, but at the end of December it said its platform hosted more than 69,000 podcasts, a 20% increase from a year earlier, with a total of 5.8 million episodes. “Podcasters are creating more episodes for their audiences and using the Libsyn platform to distribute, monetize and provide analytics,” Spencer said. Brands that have launched podcasts in recent months include Johnson & Johnson, S&P Global, Google, Unilever and Accenture.
Libsyn plans to roll out its new podcast-hosting platform, what it’s calling “Libsyn 5,” later this year, with beta testing slated for the second half. Spencer said that will include an acceleration of advertising integration into its offerings for podcasters.
As many companies look to return employees to their offices, Spencer said there isn’t a similar rush for his team. “To be honest with you, I think 70% of our team members would prefer to work from home — it is the nature of an internet company and the type of employees that work here,” he said. Spencer noted that they are fortunate that working remotely has had little impact on their ability to serve customers or growth its user base. “Our new adverting platform, created specifically for podcasters, continues to move forward,” he said. “It will bring a vast improvement to the connection between podcasters and advertisers and their ability to manage advertising campaigns.”
During the past few years, several new podcast-hosting competitors have appeared, promising free hosting. Spencer acknowledged it can be difficult to compete against free, but he said it’s not difficult to compete against a business model that doesn’t work — something he believes is the case for those rivals. “We have been competing against free podcast-hosting companies for 15 years,” he said, calling their paid model a “blessing in disguise” because it has forced Libsyn to improve its product to earn its customers’ business.
“The problem with the free model is they rely on making money to survive through advertising,” Spencer said. “The problem with that is no one in the podcast industry that we can find has been able to scale podcast advertising profitably, so as we have seen over the last 15 years, most free hosting companies come and go when their venture capital money runs out.”
This week Liberated Solutions announced its total revenue increased 10% in 2019 to $24.2 million, which it said was largely due to an increase in its hosting revenue, while ad dollars declined. Spencer said the coronavirus is hurting ad sales but declined to say by how much. “In the short-term we believe it will drop to some extent, whether it be a decline of 10% or 50%, we can’t predict right now. Fortunately, our core business of hosting, distribution and analytics has not been impacted and remains strong,” he said, adding, “Long-term we believe podcast advertising has wings.”
Liberated Syndications has delayed release of its first-quarter earnings and during the conference call Spencer explained a bookkeeping error was the cause: When the company turned profitable in 2018, it failed to reflect that milestone in its annual tax filings. The “miscalculation” was discovered, he said, during a standard audit by the Internal Revenue Service. “Given the restatement, I have asked our financial team to conduct a thorough review of our financial reporting with the goal of implementing improvements to our reporting practices in the coming months,” said Spencer.