Cadence13 And Pineapple Street Studios parent Entercom has reported its fourth quarter digital revenue grew 23% compared to the prior year, which it said was propelled by continued strong audience and revenue growth in podcasting and streaming. The company did not release podcast-specific revenue, but CEO David Field told analysts during a conference call that the segment had “robust” double-digit gains compared to the prior year. Digital accounted for 18% of Entercom’s revenue in the fourth quarter, up from 10% a year earlier.
“As we look to 2021, we continue to ramp up our production of original shows,” said Field. “Together, our Cadence13 And Pineapple Street Studios are slated to create 22 new longform series – doubling their 2020 output of eleven originals.” He said they have also expanded their list of partnerships, with Hulu the latest television service to team with Entercom. It has similar deals with HBO and Netflix.
On a related note, Entercom said it has sold the television adaptation rights to the podcast Wind of Change, a coproduction of Pineapple Street, Crooked Media and Spotify. Field said it is the latest example of how the company is finding success selling its podcast intellectual property. Field said their IP sales revenue doubled last year. “And while it’s a small number, we believe we will see this area of our business emerge as a modest contributor in the years ahead,” he told investors.
Entercom is also the operator of the Radio.com platform where some of its podcasts see their biggest audiences. The company said it had a 34% year-over-year growth in monthly active users in the fourth quarter and 53% growth in smart speaker listenership. And total listening hours increased 10%.
Those gains helped boost its digital audio advertising sales. “We were essentially sold out of our streaming inventory in the fourth quarter and demand remains high,” Field told analysts. He said Radio.com is approaching 40 million users a month across the entire platform and they plan to increase their investment in the streaming platform this year.
After spending $48 million to buy Cadence13 and Pineapple Street Studios in 2019, Entercom has not made any additional acquisitions as the division’s value has grown. That promoted one analyst during the company’s quarterly earnings call to ponder whether the podcast business might be of greater value to the company being sold with the proceeds to cut its debt load.
Field said based on what podcast companies are selling for he thinks Cadence13 and Pineapple Street are now worth “several times” what Entercom paid. Nevertheless, Field said they have no desire to part with the business.
“We view it as a core business, and we have no interest in exiting the space,” said Field. He said the combination of the Radio.com distribution platform along with a reach of 670 million people who engage with its broadcast station and digital brands each month give it an edge. Like other radio groups that have embraced podcasting, Entercom also sees its local and national sales teams as a head start to monetize the investment in on-demand audio. “
It’s not a winner-take-all situation, of course, and there will be multiple winners. And one of them will be us,” said Field. “We think it’s an essential core component to our offering and positions us really well for future growth.”
Overall, Entercom said its total net revenue for fourth quarter was $319.5 million. That was a 19% improvement from the third quarter thanks in part due to a flood of political advertising dollars. But the impact of the pandemic is far from over. Entercom said the quarter’s revenue dropped 23% compared to a year earlier.
“While the pandemic continues to hobble a large number of our advertisers, particularly locally, we are optimistic about a strong recovery in our local ad sales later this year driven by vaccinations, fiscal stimulus and pent-up consumer demand in heavily impacted categories,” said Field.