Stuart Last, who has been overseeing Audioboom’s U.S. operations since the London-based company expanded here in 2014, was named Chief Executive Officer in December. Now as he oversees global operations, Last is splitting his time between New York and London. Podcast News Daily recently caught up with Last to talk about his new job and where he sees podcasting heading in 2020. An edited transcript follows.
Podcast News Daily: What a difference a year makes – a lot has changed in the past year for Audioboom.
Stuart Last: It was an incredible year after a turbulent year in 2018. But what it meant for 2019 was we could focus on driving the business forward and had a great year. We almost doubled the revenue, signed new partnerships, launched new original content, and just all aspects of the business have really come together.
PND: And you’re now CEO.
Stuart Last: I’m really happy to be leading the team now. I launched Audioboom in the U.S. at the start of 2015 and was focused on the U.S. side of the business. Now, I also get to operate the global business. It’s really exciting to do that.
PND: Will you appoint someone new to run the U.S. market?
Last: No, I will take on just the global role. Rob [Proctor] as CEO was very much focused on the corporate side of the business, like fundraising. I can do all of that, and I am certainly picking up some of that work. But really, I’m going to be in the core of the business driving the business forward. I’ll still be very heavily involved in our business development, our production arm, our sales efforts, so it’s a really nice setup for me.
PND: How does having the CEO in New York change things?
Last: One of the things that we’ve done in the last year is restructure internally around some of our core divisions. Previously we operated in a very siloed manner, and we almost had two teams – one in the U.K. and one in the U.S. And although they were focused on the same things, which is creating new partnerships with podcasters and selling podcast advertising, they operated independently and had no shared processes, expertise or leadership. And at the start of last year we restructured that to create global teams so we have a global business development team where we can shift focus to grow U.K. business where needed or shift it to the U.S. to focus on our U.S. partnership. It’s the same on the sales side. So while we’ve shifted ourselves internally, we set ourselves up for the future.
PND: How much will you split your time between America and the U.K.?
Last: With the new role I’m probably in London once a quarter. But so much of our business, more than 90% of our business in terms of revenue is out of the U.S., so it makes sense for me to still be here for the majority of my time.
PND: You just reported 91% revenue growth for the fourth quarter. What’s driving your growth?
Last: The main driver of that growth is attached to accessing new content, whether that be either through creating new content partnerships or launching our own shows at Audioboom Originals. We’ve definitely also seen an increase in ad rates and organic increases in audience numbers.
PND: Let’s talk advertising. The number of brand advertisers buying time from Audioboom jumped to 280 versus 160 a year earlier in Q4. What does that say?
Last: It just shows how well podcast advertising performs for brands. There are brands that are just building their businesses off the back of success in podcasting and more brands want to test out the medium. They very quickly see that it works for them, and they continue to spend. That’s a great sign for the whole industry. All the other companies in the space can look at that and be very confident about how this industry is growing and the real strength of the advertising product.
PND: You said a year ago that three-quarters of your advertising came from direct response. Where does that stand now?
Last: We’re probably now at 70% DR and 30% brand advertising. The rush for brand awareness advertising has been a slow shift in that direction, but we’re still mainly direct response. It has been great to see some companies coming into the space.
PND: What do you think about AI and other technology to sell the medium? Some podcasters think it’s creepy and unnecessary. Where do you come down?
Last: We recently closed down a part of our business that was focused on AI, particularly from the advertising side because we were not seeing a lot of traction for us and we didn’t have a great deal of cash to fund that. It’s definitely an interesting area and how quickly it will be part of podcasting I’m really not sure. The top tier of this industry is still focused on the value that comes via a bespoke host endorsement that is sold specifically on that show and because of the talent of the host to deliver that messaging. So I think it’s going to come, but I don’t think it’s going to come quickly. And there will likely be some pushback when it does come. Podcasting is a pretty liberal and progressive medium, both through the people involved in production and also the listenership, and how much they will be open to technology that goes a little deeper I’m not sure right now.
PND: The industry is also quickly changing when it comes to content.
Last: I see the industry as being almost completely professionalized over the last 12 to 18 months. Most of our business development two years ago was outbound – we were trying to track down and find those podcast partners that we saw real potential to grow and become bigger shows. We would spend a lot of time working with those podcasters. Today, it doesn’t work that way. Most of our opportunity is in inbound coming in from the major Hollywood talent agencies like WME, CAA, UTA. They bring us so much opportunity to partner up with podcasters or to launch new shows with that talent. We have more and more incoming opportunity and the level of that opportunity is greater than before. That’s been a real game-changer for us.
PND: Audioboom has been open about the fact that it’s also led to bidding wars. It seems like that’s only getting more competitive.
Last: While the talent agencies have a lot of leverage and they’re looking across the whole space and they can create that competitive tension between us and our competitors, because they’re looking at the whole industry, they know who is good at what they do. They know who is really good at selling advertising for those shows, who is a good partner on co-production, and who is really good at managing relationships with talent. What that means we aren’t in a mass anymore, but just two or three competitors in each one of those rounds. That leads to more and more opportunity coming to us.
PND: But Audioboom went so far as to create a special financial arm in order to pay revenue guarantees to podcast producers.
Last: If this was all happening organically, we’d probably be more comfortable not having to put together strong financial packages for shows. But ultimately now we’re working in a much more professionally industry than ever before. It’s very quickly started to mirror the TV industry where the creators and the talent expect us to show them how we value them. We are willing to do that, but we don’t step beyond our means. We’re still a small business. We don’t have bucketsful of cash to play with and we are not supported by a big entity like some of our competitors.
PND: Audioboom Originals is your build-it rather than buy-it move. How’s that going?
Last: We have as of today 17 shows in the Audioboom Originals network. We had planned to get two more shows out before the end of the year, but we delayed those into 2020 to give us a full advertising sales ramp-up. That network has come together, and we expect at least another ten shows in 2020, eight of which are already in development.
PND: Has it gotten easier having your own in-house studio?
Last: We’re just becoming more confident about every aspect of that network from the actual creative bravery of the concept behind each one of those shows, the overall editorial vision of the network, and the actual launch process including the amount of money we spend on each launch. We’re now more confident of making that money work for us and grow our audience with each and every launch. It’s a great positioning piece for us as well as we show Audioboom is not just a services and technology toolset company, we are a publishing and creative company. It’s in the DNA of most of the team here that worked in radio or audio production in the past. We really want over the next few years for the industry and the world to recognize us as a great podcast producer.
PND: We’ve also seen other tech companies, like Acast, say they too want to be a content company. Is there a business case for adding a content business?
Last: At the basic level it allows us to control the content that’s on our roster a little bit more. Those shows that we rep for ad sales or that use our technology, at the end of our contracts they could go and seek representation from own our competitors. The shows that we create or co-produce ourselves can’t do that. It also allows us to look at the hot advertising areas and make shows in those areas – like parenting shows, which have high CPMs and great sellout rates. The margins are also much stronger on Audioboom Originals than the margins we see on the third-party side of the business. And when you see the consolidation that’s happening in this industry during the last 12 months, most of those acquisitions are focused on content creation companies and publishers of content and less and less focused on services or tech toolset companies. For us to position ourselves as a content creator can only be good to at least be seen as a potential target for a bigger company.
PND: Do you see Audioboom as a seller, or an acquirer?
Last: I don’t think we are in any rush to be an acquirer again. We’re still relatively small and there may be some benefit in us joining forces with other similarly sized companies but it’s not something that we’re too interested in today. We still have conversations regularly with others in the space about what those opportunities could look like. We are well positioned as the biggest global independent podcast business to be a target for acquisitions. I wouldn’t say we are deliberately positioning ourselves or looking for that. We are confident in continuing this growth that we have for a while, but if the right opportunity came our way we’d have to consider it because the whole industry is consolidating. We don’t want to be in a position in 18 months or two years when that consolidation has happened around us and we can’t compete anymore because we’re not part of a bigger group.
PND: Anything you’re looking forward to in 2020?
Last: I have a hope that the next big show comes along, the big show that’s bigger than the podcast industry and brings people in from the outside. At the end of 2020 it will have been six years since Serial. We still haven’t had those big breakout hits and that’s what this industry definitely needs. I hope whether it’s us or one of our competitors, one of us finds that next big hit show that does a great job of bringing in a new audience and gets the world talking about podcasting. It’s not that if it doesn’t happen the space isn’t going to keep growing, new listenership is coming in all the time. But it’s so clear that Serial kicked off this boom and we need to start having those big hits that just cut through and get everyone chatting.