For the past several years Wall Street has rewarded Spotify for its mix of streaming music and podcasting. Last week’s layoffs and strategy shift may have cast doubt on that for investors, but it’s a different podcast combination that Conal Byrne says remains strong. The CEO of the iHeartMedia Digital Audio Group says “there are few stronger” than podcasting combined with broadcast radio.
“We see renewal rates spike on deals that combine these two mediums,” Bryne writes in Forbes. “This isn't just great for the company doing the marketing, it is great for the marketer: it means that the plan has worked and is therefore renewed. It is, more than anything, the complement of these two mediums—broadcast, where the craft of conversation began and the audience reach is still unrivaled in audio, to the podcast, where storytelling innovating continues—that marketing truly succeeds.”
The mix of radio and podcast ad selling has worked to iHeart’s advantage as the company has leveraged its existing sales structure to grow into the company with the most podcast ad revenue. For the first three quarters of 2022, iHeart’s total podcast revenue increased 57% to $245.5 million, including a 42% year-to-year jump in third quarter despite a tougher ad marketplace. And executives have said its podcast division is profitable, something Spotify has yet to achieve.
Byrne says the past 15 years have brought the arrival of podcasting as a new mass-reach medium, but its roots are in broadcasting. “From Charlamagne Tha God and Colin Cowherd to Angela Yee and Angie Martinez, the ability for podcasting to move so quickly into mass-reach status has been driven in very large part by the creators who spent the last 20, 30 and 40 years honing the craft of conversation on a whole different airwave: broadcast radio,” Byrne says. “Therefore, perhaps not surprisingly, there exists a complementary relationship between these two mediums that truly exemplifies the "one plus one equals three" potential for a creator and, by extension, a marketer.”
As dozens of radio stations, on the AM band no less, celebrate their 100th birthday during the next few years, it may be hard to imagine radio as a digital trendsetter. Byrne says that the power of broadcast radio may be “understated,” but it may have a longer-term impact than even social media.
“[Radio] drives cultural conversation and defines the trending topics of the time more than almost any other medium in the world today. It also drives and connects communities. This comes at an interesting time: Several pundits are theorizing about the end of the era of social media and its decreasing power to connect us,” writes Byrne, adding, “Today, social media has become, ironically, a broadcast medium more than anything: a static, one-way, lean-back medium that we consume passively, not truly engaged.”
As someone who arrived at the biggest radio station owner in the U.S. from a career in publishing and podcasting, Bryne says the reach and impact of over-the-air audio has been reinforced in his mind by how the numbers moved for digital listening when a big story breaks.
“A statistical phenomenon on the iHeartRadio app is that during a natural disaster, out-of-market streaming of the in-market radio station will spike. What does this mean? That people across the country are using live radio, however they can access it, to connect to content made by and for the community in need,” Byrne says. “This medium, at its core, once again demonstrates to us that it is all about connectivity and engagement.”