Bob Pittman

It isn’t just the promotional power of 850 radio stations that is helping iHeartMedia quickly expand its podcasting business. The infrastructure that the largest radio broadcast company brings to bear is also helping put iHeart’s podcasting business in the black, despite investing millions in on-demand audio. “Our podcasting business is not only growing revenue, but it’s also profitable,” CEO Bob Pittman announced Thursday. During a conference call he said podcasting is also helping the company’s margins. “That’s because we own our content and we use our broadcast radio inventory to build demand for our podcasts,” Pittman told analysts.

In addition to creating a new revenue stream, Pittman explained that iHeart views podcasting as a way to maintain its relationship with the consumer – with broadcast radio remaining at the core of its business. “Our multiplatform strategy to meet listeners wherever they are continues to drive our performance and will be our guiding principle as we evolve our growth strategy,” he said. “Podcasting also gains a significant strategic advantage from our strength in broadcast radio.”

iHeartMedia reported Thursday that its third quarter revenue rose 3% year-over-year to $948.3 million and increased 4.9% excluding the impact of political revenue. Digital was a major growth catalyst, increasing 33% to $96.7 million, with most of that growth attributed to podcasting, along with other digital revenue.

Even as the company says podcasting is a profitable venture, it has not yet begun releasing specific data about the revenue it generates. But Pittman did say it is “incremental” to broadcast radio revenue. He said not only will iHeart’s podcast business expand along with the industry, but Pittman believes they are well positioned to take a larger share of the overall revenue. “Our number one priority is getting new advertisers to try it—and the more platforms we have, the more reasons they have to give us a try,” he said, adding, “Podcasting is the fastest-growing of these platforms.”

Forrester Research this week released projections saying it believes the podcast industry could hit $1 billion in revenue by the end of 2020. Pittman said the forecast offers further evidence they’re heading in the right direction, as well as seeing companies that have remained on the sidelines try their hand at podcasting. “We think that others coming into the space is further validation of the power of podcasting, and will definitely bring more listeners to the medium,” he told analysts.

Those new entrants will find themselves in catch-up mode. Podtrac says iHeartMedia had 23.7 million unique monthly listeners in the U.S. during October, a 6.3% increase compared to a month earlier. It also says the company had more than 157 million global downloads and streams for its roughly 300 active shows. Only NPR had more listeners and downloads.

“The podcasting industry is growing rapidly and shows no signs of slowing down,” said Pittman, noting they remain neck-in-neck with NPR on the Podtrac monthly ranker. “It’s no coincidence that the leading podcasters also have large broadcast platforms that we leverage to create awareness around and demand for our podcasts. And new platforms continue to invigorate the iHeart platform,” he said. “You have seen what we have done building out the iHeartRadio app, which is a leading streaming radio service, and we’re now seeing tremendous growth from podcasting which is accelerating at an even higher rate.”

Podtrac reported Thursday that the ten largest podcast publishers had an average 41% increase in unique U.S. listeners last month compared to a year ago. As more people embrace the medium, Pittman said more marketers are taking a look at audio advertising.

“As the leading audio company in the U.S., we’re benefiting from that,” he told analysts. “The most prominent example of this has been Procter & Gamble which has been a vocal leader about their shift back to radio. And which just matched its strongest quarterly sales growth in over a decade. We believe this performance in shifting its media mix back to including radio, is no coincidence.”