Broadcasting corporation iHeartMedia has revealed in its Q1 2023 report that its podcast revenue was up to $77m (£61m), which is a 12% increase year on year, due to a number of new podcast developments last year.
While the company did face an increase in operating loss by $37m (£29m) year-on-year due to a challenging macroeconomic environment which impacted broadcast and multiplatform revenue, the Group’s digital audio income was up by 4% YoY, amounting to $223m (£177m).
Podcasts also proved to be essential in increasing revenue for iHeartMedia last year as the Group’s digital revenue, with the exclusion of podcasts, was only up by 1%. An increase in demand for digital advertising also contributed to growth in digital revenue, excluding podcasts.
“While both the macroeconomic climate and the advertising marketplace remain uncertain, the audio and digital advertising markets appeared to be stronger in the quarter than we had initially anticipated,” said iHeartMedia chairman and CEO Bob Pittman. “We expect that our second quarter Adjusted EBITDA, while below 2022 levels, will be approximately double what we generated in the first quarter, and this, in combination with our Q1 first quarter performance relative to guidance, gives us confidence that our Adjusted EBITDA results will continue to improve throughout 2023, and that we will be well-positioned to build further in 2024 in terms of revenue growth, profitability and Free Cash Flow generation.”
A number of other podcast companies such as Audioboom and Acast have also reported that they have faced challenges due to the state of the economic environment, which led to a decrease in their revenue and increase in operating loss. However, podcasting was still one of the most resilient digital ad categories last year, according to the IAB’s latest quarterly report, having increased in the UK by 32% year on year.
According to Podtrac, iHeartPodcasts is the number one podcast publisher with 386 million global downloads and 800 active shows. iHeartMedia invested heavily into the development of new podcasts in 2022 with operating expenses growing by 4.7% by the end of this quarter. Other factors that increased iHeartMedia’s operating expenses included higher third-party digital costs and profit share expenses.
The remaining calendar year for 2023 also indicates that there is positive growth for iHeartMedia with the adjusted EBITDA in Q1 2023 at $93m (£74m), which was above the guidance range of $80m to $90m. However, this is still a significant decrease compared to $145m (£115m) in Q1 2022. Overall, iHeartMedia’s revenue this quarter amounted to $811m (£646m), which is down 3.8% year on year.
“We remain committed to driving shareholder value, and while we can’t predict when the advertising marketplace will fully recover, we believe that our multiplatform revenues will continue to recover and that our Digital Audio Group revenues will continue to grow throughout 2023,” said iHeartMedia president, COO and CFO Rich Bressler. “With the benefit of what are expected to be record levels of political spend in 2024, and the annualised impact of the cost reductions we have made over the past six months, in 2024 we expect to resume our growth trajectory that was interrupted by this period of recent advertising softness.”