Collins | Podcasting Offers Powerful Revenue Potential

As this still emerging entertainment segment develops, there will be lots of prognostication on how high the revenues can go, what models work best, and when it will reach market saturation. The one thing that is certain is that the on-demand genie is out of the bottle; that consumers are going to continue to expect good quality information and entertainment on their schedule.

The E.W. Scripps Co. reported second quarter earnings at the beginning of August. One thing that struck me was the 44% revenue increase in the company’s National Media division. Part of the credit for this growth goes to the company’s Stitcher (formerly known as Midroll) podcast business. More recently, iHeartMedia held its first earnings call since 2017. In his report to investors, Chairman-CEO Bob Pittman credited the company’s move into podcasting for a sizeable part of the company’s 2.4% quarterly revenue growth.

As I noted in my July 12 Front Office column, “It’s A Changing World For Video Content,” consumers are becoming habituated to expect on-demand access to content. This expectation clearly goes beyond video. In its most recent digital newsletter about podcasting, Hot Pod, Harvard College’s Nieman Lab offers a “midyear check-in” on the on-demand audio business.

Author Nicholas Quah says U.S. podcast listeners now number more than 90 million monthly. This is a nearly 58% increase from the 57 million just one year ago. He cites an IAB/PwC report to say that advertising revenue, which was at $479.1 million in 2018, is projected to top $1 billion in 2021. It’s no wonder that the media industry is starting to pay attention to podcasting.

During MFM’s annual conference in New Orleans this past May, we hosted a panel of industry experts to take a deep dive into the podcasting phenomenon and what it means for media companies’ bottom line. Some of the details were included in a sidebar piece to Patricia Andrews-Keenan’s “Annual Conference Roundup” article for the July/August issue of MFM’s member magazine, The Financial Manager (TFM), entitled “The Podcasting Explosion.”

Podcasting’s Big Numbers

Andrews-Keenan reports that Stephanie Donovan, SVP of publisher development at Triton Digital, shared the following statistics from a study conducted this year by Edison Research:


  • Nationally, there are 144 million podcast listeners, representing 51% of the population 12 and older.
  • Men and women are almost equal listeners of podcasts — 36% men, 29% women.
  • The majority of podcast listeners, 54%, consider purchasing brands advertised in podcasts.
  • On average, listeners tune in to seven shows per week.

During that same session Jay Green, SVP of digital strategy and analytics at Cadence 13, shared that U.S. podcast advertising revenue is expected to grow by more than 110% by 2020, to $659 million. This comes from the firm’s fiscal year 2017 Podcast Ad Revenue Study and is more conservative than the forecast from IAB/PwC quoted above.

Panelist Jeremy Sinon, Hubbard Broadcasting’s vice president of digital strategy, offered that from April 2018 to April 2019, Hubbard experienced dramatic growth in podcast listenership. In fact, listenership of one of their top rated programs, “Pound This,” rose by 1,112% in one year. He also noted that podcasts helped to increase interest in some programs on Hubbard’s AM radio stations.

Competition Is Heating Up

As noted in Hot Pod, the Swedish audio streaming service Spotify has been making bold moves in the podcasting arena. Among these are the company’s acquisition of content studios Gimlet Media and Parcast along with the acquisition of social audio app Anchor.

The streaming service hired TV veteran Liz Gateley, most recently EVP and head of programming for Lifetime, as head of creative development for podcasts. It also redesigned the user experience to position podcasting alongside music, is testing podcast playlists, and engaging in content deals. Spotify’s stated goal is to become an all-consuming audio platform.

One of those content deals was inked with no less than former U.S. president, Barack Obama, and his wife Michelle. In June, the Obamas’ production studio, Higher Ground, announced an expansion into audio and podcasts with Spotify. The content is said to cover a wide range of topics, but no specifics have been released. According to Variety, Spotify’s deal with the Obamas extends its push to diversify its audio-entertainment mix beyond music. The magazine goes on to say that Spotify sees better economics and user engagement through a roster of exclusive podcast content, compared with ubiquitously licensed songs from music companies. This is definitely something for all media companies to consider.

While these high-profile names will certainly generate buzz and listenership, cross-promoting and marketing of podcasts, no matter the revenue model, is essential to their success. That is also highlighted in Andrews-Keenan’s TFM article. She reports that the experts from Hubbard say this extends to email marketing, merchandising, social media, video, database targeting and live events. You may build it, but don’t expect them to come without some promotion.

Emerging Models

Right now, most podcasts are advertiser-driven and do not require subscriptions. Hot Pod’s Quah says the “messy rollout” of paid-podcast subscription platform Luminary brings up the question of value. That includes “what it is, exactly, that people will be willing to pay for.” This is the same question facing nearly every media company, from news organizations to major media and entertainment conglomerates looking to play catchup with Netflix.

As this still-emerging entertainment segment develops, there will be lots of prognostication on how high the revenues can go, what models work best, and when it will reach market saturation. The one thing that is certain is that the on-demand genie is out of the bottle; that consumers are going to continue to expect good quality information and entertainment on their schedule.

Media Outlook 2020

On-demand content, particularly video streaming, is one of the topics on the agenda for next month’s Media Outlook 2020, hosted by the Media Financial Management Association (MFM) and its BCCA subsidiary, the media industry’s credit association. The program, focused on the issues that will define media in the coming year, will be held on Thursday, Sept. 12, at the offices of Lowenstein Sandler LLP, 1251 Avenue of the Americas, in New York. The event runs from 8:30 a.m. to 12:20 p.m.

Well-known media analyst Marci Ryvicker, managing director and senior equity analyst at Wolfe Research will open the seminar with her perspective on the challenges facing programmers, cable operators, and new entrants as they navigate the rapid changes in consumer media consumption habits.

Following Ryvicker will be Jared DiPalma, CFO of NBC News, with a look at branding the network’s news, expansion opportunities and strategies for covering the upcoming 2020 election. Other speakers and panelists will be announced shortly.

Co-chairing this year’s Media Outlook 2020 are Antonella Ricciardi, SVP group controller, entertainment and lifestyle networks and Telemundo Network, NBCUniversal; and George Berbari, director, international revenue, planning and analysis, A+E Networks. We hope will be joining us on Sept. 12.

Mary M. Collins is president and CEO of the Media Financial Management Association and its BCCA subsidiary, the media industry’s credit association. She can be reached at [email protected] and via the association’s LinkedInTwitter or Facebook sites.

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