Advertisers are more willing to take a chance on a new media during an economic downturn, and iHeartMedia CEO Bob Pittman thinks podcasting is poised to benefit from that just as social media did during the recession a decade ago. “We’re seeing about three-times the revenue growth than we’re seeing usage growth,” he said Thursday. The company reported first-quarter podcast use increased 35% on iHeartRadio, while revenue soared 80% - beating New York Times’ 30% podcast revenue gain in Q1. “That probably indicates we’re not only growing with the category, we’re also probably growing our share within that,” Pittman said during a conference call with analysts. “There was a real growing interest in audio before the downturn and our expectation is that audio will benefit from this downturn by people focusing on audio,” he said.
Podcast revenue growth continues into the second quarter. COO/CFO Rich Bressler said iHeart’s podcast revenue is currently on track to more than double. “There was a perception that podcasting is down. It may be down for the industry, but we are significantly up,” he said. The company’s overall digital revenue totaled $92.8 million during the first quarter, a 22% year-over-year growth rate despite an advertising marketplace that was upended by the COVID-19 pandemic in March. It doesn’t release podcast-specific billings.
The strategic decision to make podcasting one of iHeartMedia’s content pillars has not only helped to diversify the company’s revenue stream, but Pittman said it also continues to open new opportunities with marketers who are embracing the renaissance underway in audio. “It is a gateway to iHeart, bringing new advertisers to other audio platforms,” he said, predicting, “This podcast platform will be an ever-increasing importance to our company for both usage and revenue.”
Bressler said all companies in the podcasting business will continue to benefit from the overall gains being made by an industry on track to have a billion dollars in revenue by 2021. But he said iHeart will also benefit as it fights for its “fair share” of those dollars.
Pittman also announced that during the first three months of the year the amount of podcast listening on the iHeartRadio app, including shows not published by iHeart, increased more than 100% year-over-year which made the company one of the largest podcast distributors, and opened additional opportunities to convert podcast listeners into users of the app’s streaming radio service.
The conference call on Thursday reflected what the country is currently facing as executives and analysts sat in their homes. The coronavirus has required businesses across America to adapt. On the radio side that has meant air personalities broadcasting from home, and it’s also meant podcasts aren’t being produced in professional quality studios. But Pittman said it hasn’t slowed iHeart’s pipeline of new shows.
“We have accelerated our pace of launching new podcasts, and we’ve also done it with bigger and more important people,” he said. “I think it’s a recognition that iHeart is the leader in podcasting. If I want to get a hit podcast, my best chance is with iHeart. I think it’s safe to say we get many more first-looks that anybody else.”
The company continues to launch its own podcasts and Pittman said he was especially proud of the iHeartPodcast Network series that will bring together big names in politics, entertainment, business, music, and media in a collection of commencement-style speeches that will be available next week. “We’ve gotten these fantastic, important people to do commencement speeches which we’re delivering as podcasts. And in true iHeart fashion, we’re also able to take them and put them on the radio as well,” he said.
All the commencement podcasts will be released May 15, two days ahead of National Graduation Day.