During a year like no other, iHeartMedia said Thursday that its podcast business growth path remained a constant and, if anything, accelerated during the second quarter. Podcast downloads for iHeart jumped 62% during the quarter, while podcast revenue more than doubled. “That strength in podcasting highlights how the decisions that we have made are paying off,” said CEO Bob Pittman. “Today, iHeart is the No. 1 commercial podcast company in America and our podcast division continues to grow at a rapid pace, with revenue outstripping the audience growth.” He noted their portfolio of nearly 500 premium podcast titles now averages about 225 million downloads per month.
Pittman said information and companionship have long been at the core of the radio listening experience, especially in times of need, and he believes that halo is now also benefiting his company’s podcast efforts. “We believe the strength of our podcast listening is an indication that podcast listening is providing a similar benefit and it’s an extension of the radio listening experience,” he said. “It’s no surprise that the two largest podcast publishers, iHeart and NPR, are both major broadcast radio companies. Both have a two-to-one lead to the next largest publisher.”
iHeartMedia reported its podcast revenue grew 103% during the second quarter compared to a year ago, making it by far the segment of the business that did the best during a period that was impacted by the coronavirus pandemic. “We believe this is strong validation of our multiplatform strategy, investments and successes,” said Pittman.
As a network of 850 broadcast radio stations helps to promote shows, iHeart also continues to work to funnel its radio and podcast advertisers back and forth between the two mediums. “The people who are interested in podcasting, they certainly should be interested in radio, because to us it winds up being the same thing,” Pittman said. “It’s radio-on-demand. We find in successful podcasts it’s very host-driven, just like radio.”
Total digital revenue increased 2% to $92 million at iHeart, a figure that President/COO/CFO Rich Bressler said would have been down had it not been for podcasting. The company also said its overall business declined 47% to $488 million during the second quarter compared to a year earlier, with radio taking the biggest hit by what Pittman called a “sudden and dramatic” advertiser pullback during second quarter.
Executives did not offer any specific outlook for the remainder of the year but said the trend lines are moving in the right direction. Pittman said the third quarter is showing “meaningful improvement” over the second quarter. July revenue was down 27%, or about half the 50% drop experienced during April.
“Placements are increasing, and cancellations are decreasing,” said Bressler. “Bigger brands are coming back into the marketplace.” He said some of the best-performing advertising categories have included consumer packaged goods, home improvement, insurance, financial services, medical/health care, and the TV streaming services. “We do have some bright spots — and podcasting continued to lead the pack,” said Bressler.
During a conference call with analysts, Pittman reiterated that iHeart has no plans to embrace paywalls or exclusive deals. “Good for the app, not good for the listeners, because they now have to pay for content that was previously free. Not good for creators because their audience and impact will be small. And not good for sponsors because there is insufficient scale from exclusive distribution. Ours is the opposite model, and we think the better model, with wide distribution so listeners find the content they want where they want. Creators build the largest audience size possible. And sponsors can scale their messages across these large audiences.” He said the data from Podtrac and others has shown the latter strategy is working. “We have yet to see the success that anyone has had with the paywall strategy in podcasting,” Pittman added. He also rejected the idea of the iHeartPodcast Network striking a deal to exclusively distribute a show on Spotify.
Including streaming radio and podcasting, iHeart reported in-home digital listening was up 19% during the second quarter, with a 25% increase in gaming console listening and a 13% increase in smart TV listening. “Even in July with things returning to normal, digital listening is still up,” said Pittman. “And our hope and expectation is that after patterns go back to pre-COVID levels we’ll continue to benefit in-home from consumers learning how to find and use our products on additional in-home devices.”