Cumulus Media reports it had more than one billion downloads to its podcasts last year, an increase of 40% compared to a year earlier and a noteworthy milestone that illustrates how on-demand audio is growing in importance for the radio broadcaster. Its Westwood One Podcast Network – which represents more than 50 podcasts – now collectively averages 94 million downloads, streams and listens per month according to the company.
“Digital has been our best-performing revenue channel,” said Berner. “This is driven by terrific growth in our podcast business, which is pacing up more than 30% in first quarter drafting on a strong momentum coming out of the fourth quarter,” she said on a conference call with investors on Tuesday. Berner credited the success of Cumulus’ conservative talk podcasts, including shows hosted by Ben Shapiro, Mark Levin, and Dan Bongino, for much of their gains. “We expect more of the same for this business – steady, profitable growth,” she said.
Cumulus did not release podcast-specific earnings, but the company said Tuesday that its digital revenue totaled $23.8 million during the fourth quarter, a ten percent increase compared to a year earlier. And for all of 2020, its digital revenue added up to $86 million, a nine percent year-to-year growth rate. CFO Francisco Lopez-Balboa told analysts that roughly a third of the digital total came from podcasting.
“We’re also seeing nice growth in streaming,” said Berner. “Streaming listenership for the industry now accounts for about 13% of total AM/FM listening and the Cumulus streaming platform is up more than 10% year-over-year in the fourth quarter in total listening hours with smart speakers now accounting for more than a quarter of our streaming listenership.”
Yet with all of digital’s growth, Berner also pointed out to investors that AM/FM radio still accounts for roughly three-quarters of ad-supported audio consumption, which is about where it was prior to the pandemic. She also noted that radio’s share of listening in the car remains “virtually unchanged” at nearly 90%.
Even as companies like iHeartMedia, Spotify and SiriusXM continue to make deals to beef up their podcast portfolios, particularly through the acquisition of ad tech providers, Lopez-Balboa said his company’s wallet remains closed for the most part. “At this point we’re focused on organic growth, but it doesn’t mean we won’t look at smart acquisitions,” he said. “But we’ve generally at this point made our bet on partnership relationships with our talent as opposed to spending a lot of money on IT or infrastructure.”
Down Q4 & Influx Q1
Overall, fourth quarter 2020 revenues across Cumulus Media declined 13.1% on a same-station basis to $245.9 million, compared to the same period in 2019. While the negative impact of COVID continued, the rate of decline was less than half of what the company endured in third quarter.
“We’re not out of the pandemic woods yet, so we will continue to focus on the cost-reduction efforts that have proven so valuable to us over the past few years,” said Berner. She told analysts Cumulus cut $90 million in costs during 2020, crediting the move with helping the broadcaster navigate the impact of the pandemic.
Cumulus said its first quarter business is currently pacing down about 20% compared to a year ago but that is only because it has not begun running into the weeks when a year ago the pandemic brought advertising to a screeching halt. “We expect that Q1’s final results will be better than current pacing indicates,” said Berner. In fact, she said some advertising categories are showing gains such as government, financial services, beverages and food products, and utilities.