The global podcasting platform Audioboom made headlines in 2018 for what it didn’t buy, and as it moves forward into 2019 the company’s focus continues to be on expanding beyond its advertising network into the content business. Launched in June 2017, the Audioboom Originals Network is offering new opportunities for the four-year old company. We caught up with COO Stuart Last to talk about where he sees the company, and the industry, heading. An edited transcript follows.
It’s been quite a year for you guys. You’ve said that things got rough since scrapping the planned $185 million acquisition of Triton Digital last year. Where do things stand today?
We’re past it now. It made a lot of sense from a business point of view to put the two companies together. And it still made sense, obviously, because Scripps went and did the same thing with their digital audio business. It just didn’t work out operationally for Audioboom.
Things got pretty tough. We have this great group of partners and shows that we rep for ad sales and we work with on the technology side, and the corporate work that was going on just impacted all of those relationships. It impacted the finances and we got behind on our payments to partners to the point where there was a lot of frustration that we weren’t doing what we needed to do as a partner. And it took us six weeks after we aborted the Triton deal to get back on track. We did that and our partners were paid and we worked really hard at reassuring them so that everyone is happy again. Those Triton issues still come up every day though. We’ll be working on some major deals and the first question everyone has is around finances because of the Triton issue. We have put that behind us and we’re in a strong place and 2018 turned out to be pretty good for us, particularly the last quarter.
Why was Q4 so good for you?
It was a combination of a couple things. We worked very hard on the business development side and created new partnerships with networks and independent podcasters. A lot of the growth in audience came in the second half of the year, which allowed us to do a great job in selling those shows. Our sales performance in particular really stepped up in the last half. It was a combination of bringing on some great new podcasts and networks, selling those shows really well, and doing a very good job of pushing our prices up and selling those shows out. On top of that, it was a great three or four months for the Audioboom Originals Network, which is our original content network, produced and developed in-house.
Triton didn’t work out, but do you foresee other deal-making?
I think we’re probably going to take a few months off. But there are definitely some targets that we’re aware of. Now isn’t the right time to push forward with those. We need to concentrate on building the business that we do have first. We’re in a unique position, since as a public company accessing capital is an option for us. There are a few interesting companies out there that do things differently than us and might make sense to put together with Audioboom. But I don’t think the appetite is there just now from us, but we might get back to that place later in the year.
Selling is always an option too.
We’re creating something that’s going to be desirable to a lot of bigger broadcasters or media companies out there. We’re not going out there and looking for it. Being independent to a degree is a nice place to be and we are building this pretty quickly. But at some point anyone who wants a podcasting element to their business is going to start to take a look around, and we are one of the few truly global podcast businesses out there that isn’t aligned with another big broadcaster or big media company.
You announced 160 advertisers in December versus 130 in May. Tell us about the new advertisers coming into podcasting.
The majority of new advertisers that we’re seeing are the same ones that most other networks are also seeing. There is a lot of excitement around the industry right now. More and more companies, particularly those disruptive online retailers, understand that podcast advertising leads to a direct increase in sales. There are many more companies coming in and testing out the space to see if it works that want to be part of it. Out of those 30 new brands that we worked with in the second half the year, at least half of those were direct relationships and not coming through agencies. They were brands coming in and directly buying from our marketing department. That really shows there’s a lot of interest by brands who want to be part of this and they’re testing out what podcast can do for them and they’re seeing really great results.
How much of advertising is brand versus direct response?
The ratio is probably around 75% DR and 25% brand advertisers currently. A year ago it was probably 90%-10%. We’re seeing a definite shift towards brand advertisers being in the space.
Shifting gears, the focus is now on content and the launch of the Audioboom Originals Network. How’s that going?
That’s where the opportunity always was. As a team, most of us have a history in radio or content creation. I was a producer at the BBC for 12 years before I came to the U.S. We love making great content. We’ve mainly focused on the network and ad sales business until a year ago when we launched Audioboom Originals. It’s really exciting to be a publisher. We have 12 shows on the network currently. We have plans to release another nine or ten shows in 2019 and we just love to be able to control the production process, the ideation, the development of those ideas, and the launch. The success of those has been fantastic.
You aren’t playing to one specific content niche. Are you casting a wide net to see what works?
We didn’t go down a route of finding a category or genre and focusing hard within that. When we got this started, it was more about recognizing great ideas, being a little experimental and committing to good and creative ideas rather than pushing ourselves in one direction. Podcasting today feels like a place where you don’t have to go down one route genre-wise. A few years ago that wasn’t necessarily the case and networks were created around comedy or sports. I don’t think that’s a route you have to go now and that allows you to be more creative and find great shows. We have a few true-crime shows within Audioboom Originals and that mirrors our wider sales network where we are very true-crime heavy. It felt like a nice link to that wider sales network.
Are you finding there’s more competition for content?
On the sales network side there is a lot of competition, and it’s really professionalized over the last year or two. Most of the opportunity on our sales network a year or two ago was for smaller, independent productions. Now most of the work on that side is done through the Hollywood talent agencies. Most of the opportunity there is coming through UTA, WME, or CAA who represent the top tier of podcasters. They negotiate really hard for those shows. The power has shifted more to the podcasters, who are able to get great deals with networks like Audioboom, Midroll, Cadence13 or whoever else. It’s a very competitive process with minimum guarantees and advances now a standard part of a package and that wasn’t there a year or 18 months ago.
Where do you see podcasting going in 2019?
Growth is going to be super-strong for us in 2019. This is the year that I expect the global part of Audioboom to create more of an impact. We have offices in London and Mumbai and Australia and we expect that to add-in to the growth that we’re experiencing in the U.S. As an industry, we’re going to see a lot more big talent coming into the space. We’re already hearing from agents that there’s a lot of Hollywood talent that wants to be in podcasting and we’ll see those names launching shows in the next six-to-eight months.
This Q&A originally appeared in Podcast News Daily. CLICK HERE to sign up for daily updates on podcasting by email.