In a time when many companies are shedding unprofitable podcasts from their lineups, the number of shows that are part of the iHeartPodcast portfolio has continued to grow. It had 877 active shows during August, compared to 814 in January. During an investor conference Wednesday, iHeart CEO Bob Pittman said that as deal-making has become more profit-centric it has helped the company enlarge its roster. “It makes our deals easier to do,” he said.
Speaking at the Bank of America Securities Media Conference, Pittman said having discipline the last few years and walking away from opportunities to do business with some big-named talent took “discipline.” But he told the room of investors that opting not to cut deals that were financially upside down has paid off in the long run for iHeart.
“It turned out, they couldn't get a return, and so I think things have returned to Earth,” Pittman said. “I do think you're going see values getting much easier.” He said even though they may not have signed the celebrity talent that some other podcasters are now shedding, iHeart was still able to bring partners onboard such as the NFL and NBA. “They wanted to build something sustainable,” he said.
The podcast industry has continued to have some of the strongest growth numbers in advertising this year in what is otherwise a softer marketplace than what media companies faced in 2022. Pittman expects business to pick up in the fourth quarter, and he told investors that next year ad spending will probably look a lot more like it has in the past.
“The growth is still extraordinary out there. And we expect to continue to have strong growth,” Pittman said. He thinks iHeart’s focus on show profitability will mean that its podcast business will have earning margins of around 35% going forward.
Forecasters expect podcast ad revenue to top $2 billion this year and reach as much as $6 billion in the next five years. Time will tell how that plays out, but iHeart CFO/President/COO Rich Bressler said that podcasting is also still growing from its ability to bring onboard some of the largest advertisers that spend billions of dollars each year on advertising. “They bring big dollars to the medium,” he said.