While the ad business bounced back in 2021, live events remained on hold as health concerns kept touring artists off the road in favor of virtual events. With COVID infection rates declining, the concert business has sprung back to life and that means good things for media companies that stage live events.
“The consumers are roaring back,” Bob Pittman, Chairman and CEO of iHeartMedia said Tuesday. The iHeartRadio Music Festival, held last September at the T-Mobile Arena in Las Vegas, did bigger business than its pre-pandemic 2019 version, Pittman said. “There was an energy in the room and an overall vibe that I think we haven't felt in years,” he told Deutsche Bank’s 30th annual Media, Internet & Telecom Conference at the Breakers Palm Beach, the investment bank’s first face-to-face conference in three years.
With a 2022 calendar full of live events, including the iHeartRadio Music Awards next week in Los Angeles, Pittman is optimistic. “We're back to live and excited about it,” he continued. “If you look at other live businesses, Live Nation, etc. I think you're seeing indications that the consumer is done with staying in the house and they are so ready to get out and respond to almost anything that brings that out-of-home experience.”
Along with the return of live events, radio is also anticipating a political advertising windfall. And while Pittman and iHeart President and Chief Operating Officer Rich Bressler stopped short of making any predictions about how much they might bill in the 2022 midterm election cycle, they do expect it to be significant. In the last election cycle iHeart bagged political ad sales in the neighborhood of $160-$165 million.
“We have no reason to believe it's not going to be a strong political year,” Bressler said, “whether it's the candidates or issues advertising.” What’s more, the company is coming into the election cycle with more capabilities, Bressler added, with an ad tech stack that allows marketers to buy audiences across radio, streaming and podcasting through one unified system.
In terms of overall ad tends, Pittman and Bressler were upbeat. “People are spending, consumers are back, and advertisers are spending behind them,” Pittman said. “We've seen little to say that that's going to change.” He added that he doesn’t expect the war in Ukraine, soaring gas prices or the potential for another COVID surge to derail consumer optimism. “We see this surge of people to get back to their life. It’s sort of overwhelming the impact of any of the other macros out there.”
While the company’s Digital Audio Group, which includes podcasting, streaming, websites, and other digital assets, is growing at a faster clip than the Multiplatform Group that houses its 850+ radio stations, the iHeart execs say they expect radio to continue to grow revenue above pre-pandemic levels. “What on earth would keep radio from continuing to grow past 2019 levels?” Pittman asked rhetorically. Radio has a large, engaged audience and delivers the same results as TV – when bought at the same weight levels – at one-fourth the price of TV, a medium whose reach declines are well documented, they argued. “As you see pressure on advertisers to get more efficient and to find efficiencies in costs, we're going to benefit from that,” Pittman predicted. “I think radio is in a pretty good spot.
That said, Pittman noted the Digital Audio Group is growing faster and suggested one day it would eclipse the currently larger Multiplatform Group in revenue. “But that's only because of the differential in growth rates, not because one's going down,” he added.