iHeartMedia CEO Sees “A Certain Rationality” Returning to the Podcast Deal Space
iHeartMedia brought in $113 million in podcast revenue in the three months ended Dec. 31, up 17 percent year over year.
For the full year, podcast revenue was up 42 percent compared to the previous year, thanks to higher trade revenues. Asked whether iHeartMedia will be more aggressive in the podcasting space, now that there are fewer higher-priced content deals, CEO Bob Pittman said he sees “a certain rationality that’s returned” to the industry and one that he expects to benefit his company.
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“I do think there’s an opportunity there. I do think it will have a positive ripple effect through the podcast business,” Pittman told analysts on the iHeartMedia earnings call.
Total company revenue for the fourth quarter reached $1.13 billion, up 6 percent year-over-year and hitting the high end of the radio and media company’s guidance. However, political advertising played a big role in the quarter’s results, and excluding that contribution, revenue was up 1 percent.
In the fourth quarter, iHeartMedia’s GAAP operating income jumped to $173 million compared to $123 million in the fourth quarter of 2021, hitting a record high, also due to increased political advertising. This also led to free cash flow of $165 million, the second highest on record at the company. Still iHeartMedia warned that these gains were partially offset by a drop in revenue “due to a more challenging macroeconomic environment.”
With that in mind, for the first quarter of 2023, iHeartRadio expects its consolidated revenue to decrease in the mid-single digits, after having seen a 1 percent drop in January, with consolidated adjusted EBITDA expected to fall between $80 million to $90 million.
“We are pleased to report another quarter of solid operating results for iHeart in consumer usage, revenue, and earnings growth. The fourth quarter was our best quarter for Revenue and Adjusted EBITDA — and on a full year basis, in 2022 we generated the highest revenue and the second highest Adjusted EBITDA and Free Cash Flow year in iHeart’s history,” said Bob Pittman, chairman and CEO of iHeartMedia, Inc.
Pittman added, “Even in this continuing challenging and uncertain economic environment, we continue to make strong progress in our transformation of iHeart into a true multiplatform audio company — driven by innovation, supported by data and technology, and powered by the largest sales force in audio — and we are positioning iHeart to take advantage of the coming economic recovery.”