iHeartMedia is leaning into its podcast business, while saying it has not yet seen an impact on longer term advertising despite fears of a difficult economic environment.
Speaking at the J.P. Morgan Global Technology, Media and Communications Conference Tuesday, iHeartMedia CEO Bob Pittman said the company was seeing the opposite trajectory from Snap, which issued a warning Monday for second quarter revenue expectations saying “the macroeconomic environment has deteriorated further and faster than anticipated.” iHeartMedia saw an impact on advertising in April, but sees May and June pacing higher, Pittman said.
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On one hand, iHeartMedia has the advantage of a diversified advertising base, with exposure in 160 markets across the country and multiple advertising platforms, including broadcast radio, premiere national networks, podcasts and a digital business. But in the uncertain environment of the pandemic, Pittman added that radio in particular has benefitted from lower CPMs, which may be more attractive to advertisers.
iHeartMedia is also seeing increased demand for its digital audio advertising business, with its podcast segment up 79 percent in the first quarter. The podcasting business alone makes up 10 percent of the company’s revenue, with a greater margin than the overall company.
Pittman took a holistic view of the space, saying that the American public is drawn to podcasting out of a love of companionship and of a good story. The public has flocked to the medium more than any other he’s seen in his career, he said.
“In video, we’ve run out of time for our eyeballs. So if you want to watch something, it comes at the expense of watching something else,” Pittman said. “In audio, we’re filling up time that used to be attributed to peace and quiet.”
Most of the growth in the podcast space comes from existing podcasts, Pittman said, which implies that there’s room to continue building out franchises, rather than needing to constantly release new material. The HowStuffWorks podcast, for example, has been expanded into multiple shows.
To build audiences, iHeartMedia has a promotional advantage, in that the company is able to promote shows on broadcast radio, use podcasts as content on radio and feature trailers of new podcasts in existing franchises. Still, Pittman said the company gives a new podcast about two to three weeks with heavy promotion to see if it will be a hit or not.