In last week’s iHeartMedia (IHRT) earnings call, CEO Bob Pittman discussed podcast strategy, podcast strategy, and podcast strategy. And a bit of radio. The financials included the entire business, and the COVID effect. But the go-forward mission leans heavily into on-demand audio, both as a stand-alone advertising business, and a synergistic opportunity with the largest array of commercial radio stations in the U.S.
One key number: Podcast revenue was up 103% year-over-year compared with Q2 2019. Obviously an encouraging affirmation.
“Our strongest-performing new business is podcasting.” –Bob Pittman, CEO, iHeartMedia
The strategy of ubiquity — putting the product wherever the consumer wants to consume it — has been part of iHeart’s DNA for years. Here is how Pittman states it: “We have prioritized being everywhere consumers want to find us with the products and services they expect. Today, in addition to our AM/FM platforms, consumers can find us on over 2,000 devices and 250 platforms, from PCs and smartphones to smart speakers like Alexa and Google Home, smart TVs, Sonos, Roku, gaming consoles and even Apple TV.” (We like that, “even” Apple TV.)
Here is Pittman’s power pitch to investors about podcasting:
“Today, iHeart is the number one commercial podcast company in America. And our podcast division, which is part of our digital business, continues to grow at a rapid pace with revenue outstripping even audience growth. With almost 500 premium titles and 225 million downloads a month, we partnered with the very best creators in the world, distribute their content to the largest audience as possible, backed up by the massive marketing power of our broadcast radio assets, which gives us a huge amplifier for every new podcast title we release, and then we monetize it in the hands of the largest and best audio sales team in America.”
One investor question, about competing with Spotify, brought out this interesting stream of thought from Pittman, who seems to scorn the concept and business of putting podcasts behind exclusivity paywalls:
“There are really two different approaches out there; one, paywalling exclusive content on a single app. Good for the app, not good with the listeners because they now have to pay for content that was previously free. Not good for creators because their audience and impact will be small. And not good for sponsors because there is insufficient scale in exclusive distribution. Ours is the opposite model and, we think, better model. Wide distribution, so listeners find the content they want, where they want. Creators build the largest audience size possible, and sponsors can scale their messages across these large audiences.”
“We have yet to see an example of success anyone has had with the paywalling strategy in podcasting.” –Bob Pittman, CEO, iHeartMedia
Finally, the IHRT CEO noted the close relationship of podcasting and radio:
“We sort of treat podcasting and radio as one experience expressed at a slightly different way. And I think being able to not only do that creatively for the consumer, but being able to do that for the advertiser is really a unique advantage that our company provides.”
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