IHM Voxnest

With nearly five hundred programs under its banner, the iHeartPodcast Network has become one of the biggest producers of content in the podcast industry. But with a portfolio that extensive, it can be difficult to sell all the advertising for every show – even with a large sales team. The ability to monetize the so-called “longtail” is what iHeart executives say was the driving force behind the company’s recent $50 million acquisition of Voxnest.

“We have the largest audio sales force in America by a lot with thousands of sales professionals out selling audio and we are able to hit it from many angles. Buying Voxnest allows us to be more into the programmatic space to sell some of that inventory,” iHeartMedia CEO Bob Pittman told the Wells Fargo TMT Summit this week. He said roughly 20% to 30% of ad avails are either unsold or under-monetized. “To fill in the holes, we needed a programmatic platform and Voxnest fills that hole for us and allows us to very efficiently pick up those bits and pieces and turn them into significant revenue,” Pittman explained. Because Voxnest aggregates its inventory across several smaller programmatic platforms, he also thinks Voxnest has more appeal to ad buyers in search of a one-stop-shop marketplace.

As the podcast industry consolidates, iHeart sees its scale as one of the company’s biggest advantages and not just in terms of advertising. While the days of a podcast breaking through from a single show produced in a basement marked podcasting’s early years, as bigger brands and personalities jump in, the medium’s reach has become more important.

CFO/COO Rich Bressler told the conference that iHeart is now more easily able to form alliances with creators like Malcolm Gladwell, whose Pushkin Industries just inked a two-year coproduction deal to produce a slate of new, original podcasts. “He probably had a chance to go behind the paywall for much bigger minimum guarantees. But the reason he chose us is that ability to make a podcast successful and reach the largest audience,” said Bressler.

Pittman said iHeart also has another big advantage. “We have radio, so we have the ability to promote these podcasts to people,” he told investors.

Yet Pittman said deals and alliances are not yet make-or-break for most podcast companies as the medium grows by leaps and bounds. “We are quite a long way away from worrying about our share,” he said. “We are more worried about keeping this pie growing.” Pittman said that is a job made easier by the fact that consumers naturally like podcasts. “It’s not like we have to convince them to do something they don’t want to do. We just have to expose it to them,” he said. It is why iHeart has ramped up using its radio stations to promote podcasts.

Digital listening to podcasts and iHeart’s other streaming music stations continues to grow, and while it helps keep the company competitive Pittman said he still views having iHeartRadio on everything from smartphones to smart TVs and gaming devices as part of a strategy of being wherever consumers are reaching for audio content.

“Instead of transition, it’s really fill-in,” Pittman said. “There are places that you can’t get to a radio and having these other 250 platforms allows people to get to their radio more and it gives them more opportunities to listen.” he said.

The company’s research has found the average listener tunes in seven times per day rather than sitting down with broadcast radio for an hour. “They’re always checking in and out because we’re offering them companionship so the more places that they can find us, the more listening they can do,” Pittman said. “It adds to the engagement. We are there whenever they need us.”