iHeartMedia is looking at its podcast business, while saying it has yet to see a longer-term advertising impact despite fears of a tough economic environment.
speaking to the JP Morgan Global Conference on Technology, Media and Communications On Tuesday, iHeartMedia CEO Bob Pittman said the company saw the opposite trajectory of Snap, which issued a warning Monday for the second quarter earnings forecast indicating that “the macroeconomic environment has deteriorated further and faster than expected”. iHeartMedia saw an impact on advertising in April, but sees May and June increase, Pittman said.
On the one hand, iHeartMedia has the advantage of a diverse advertising base, with exposure in 160 markets across the country and multiple advertising platforms, including broadcast radio, national premier networks, podcasts and a corporate digital. But in the uncertain pandemic environment, Pittman added that radio in particular has benefited 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% in the first trimester. The podcasting business alone accounts for 10% of the company’s revenue, with a higher margin than the company as a whole.
Pittman took a holistic view of the space, saying American audiences are drawn to podcasting for the love of companionship and a good story. Audiences have flocked to the medium more than any other he’s seen in his career, he said.
“In video, we’re running 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 fill in the time that was once allotted to peace and quiet.”
Most of the growth in the podcast space is coming from existing podcasts, Pittman said, implying that it’s possible to continue building franchises, rather than having to constantly release new content. the HowStuffWorks the podcast, for example, has been extended to several shows.
To build audiences, iHeartMedia has a promotional advantage, in that the company is able to promote shows on the radio, use podcasts as content on the radio, and feature trailers of new podcasts in existing franchises. Still, Pittman said the company was coming up with a new podcast about two to three weeks long with heavy promotion to see if it would be a hit or not.