The podcast hosting and monetization company Libsyn continues to enjoy the benefits of a growing industry. The company reports third quarter revenue of $6.2 million, a 9% increase compared to a year ago. Libsyn said that although its advertising revenue was weaker, that decline was offset by growth in its Libsyn4 hosting revenue as well as LibsynPro, with increased bandwidth usage fees for delivery of podcasts contributing to the revenue gain. It also noted that the bandwidth costs to deliver the podcasts declined, helping deliver more of that revenue to the bottom line.
In an update to investors, the company said increases in its hosting revenue is the result from more podcasts on its network. The number of podcasts on the Libsyn platform grew to 67,000, with 5.6 million episodes, during the third quarter. That translated to a 13% increase in its hosting revenue compared to a year ago. And in a positive sign about the continued acceleration of the medium, it said its hosting total was up an even stronger 16% when compared to the end of second quarter. “August and September represented the second and third best months, respectively, for new podcast signups in the history of Libsyn,” it said in a regulatory filing. Among the additions were podcasts produced by such brands as FedEx, Nasdaq, LinkedIn, New York City Ballet, the band Oasis, and media personality Sarah Jones Roberts. “We continue to see strong growth in podcasting, as there are now over 67,000 shows hosted on the Libsyn platform,” CEO Chris Spencer said Friday.
During a conference call with investors, Spencer said the companies using its platform are creating more content than in the past as they continue to produce episodes for their existing shows and branch out to create new shows. “We now have 5.6 million episodes across the shows on the network, which demonstrates continued activity on the platform,” he said. Spencer also noted Libsyn has now delivered 5.1 billion unique episode downloads, an increase from 3.7 billion at the end of third quarter last year. And its unique monthly audience was 114 million at the end of Q3, compared to 98 million last year. “It means we have more people starting podcasts than ever before, they’re creating more episodes for their audiences, and using the Libsyn platform to monetize, distribute and provide analytics,” he said.
The greater number of podcasts on its platform is also bringing a new level of diversity. “Traditionally, the mix of new shows being added to our network have trended toward males, as is the podcast industry as a whole,” Spencer said. “That trend is changing and this year we have seen the mix trend to include more female-hosted podcasts.’
Ad Sales Decline
The weak spot for Libsyn during the third quarter continued to be on the advertising front. It said ad revenue declined $339,000 during the quarter compared to a year ago. But Spencer said that’s a short-term pain they’ll need to suffer as they work to launch a new advertising platform. “That is where our focus has been in,” he said. “We believe investing in the future, even if it causes a short-term decline in advertising revenue now, will pay off significantly in terms of both increased revenue and customer satisfaction and retention in the future.” In addition to hosting, the gap created by lower ad revenue was closed by a small increase in premium subscription revenue.
Overall revenue at Libsyn’s parent company Liberated Syndication, which also includes the internet hosting company Pair Networks, grew 9% to $6.2 million during the third quarter. Libsyn contributed 58% of the total.
“We remain focused on offering our expanding customer base industry-leading services through Libsyn and Pair and are confident this approach will allow us to continue delivering for our podcasters, their audiences, and our shareholders,” said Spencer.
Open To Acquisitions
With the podcast business undergoing consolidation and deal-making in 2019, Spencer said he’s intrigued by some of what he sees. And Libsyn has created a strategic review committee that will consider any acquisition opportunities that land on its doorstep. “The company is currently and continuously evaluating the podcast ecosystem and synergistic businesses for opportunities,” said Spencer. “We believe there are several very interesting opportunities in the podcasting industry, including in advertising and hosting companies. However an acquisition must make sense from a strategic and fundamental perspective.”
Another area for growth is in the international market, where Spencer said they currently already have customers worldwide. It’s an area where there can be added pressure on pricing, but Spencer said he believes Libsyn is competitive. “We feel that we’re competitive, based on the value of the service both domestically and internationally.”
Liberated Solutions last month settled a long-running dispute with shareholder Carmac Partners, the private investment firm headed by Eric Shahinian, which had been pushing for a new board to be appointed after the company issued stock rewards when it signed contract extensions with Spencer and CFO John Busshaus last spring.
“We were pleased to resolve the shareholder campaign in a manner that we believe is beneficial for the company and its shareholders,” Spencer told investors. “We have new independent voices joining our board and look forward to bringing on another independent director in the future.”
Under the terms of the settlement Liberated Solutions agreed to bring in new independent board members and cancel 150,000 stock equity awards that it had given to each of the executives. It also said it would pay up to $600,000 to Carmac to cover the out-of-pocket expenses it incurred during the fight.
Busshaus exited the company last month in connection to a complaint filed with the Securities and Exchange Commission related to his role as CFO of the former FAB Universal, unrelated to Liberated Solutions. The board also announced the appointment of interim CFO Gabriel Mosey. “Our search for our next chief financial officer continues,” said Spencer.