iHeartMedia’s Digital Audio Group has seen podcast revenue grow by 13% year on year, according to the media corporation’s second-quarter financial results.
Podcasting played a significant role in driving the Digital Audio Group’s earnings during the most recent quarter, with total podcast revenue amounting to $97 million (£76m), which is 37% of the Digital Audio Group’s total revenue of $261 million (£205m). Podcast revenue is generated through selling advertisements across iHeartMedia’s podcast network.
With the exclusion of podcasts, the Digital Audio Group - which includes the sale of streaming and display ads on digital platforms as well as subscriptions through iHeartRadio streaming services - decreases its total revenue by 2% year on year. iHeartMedia attributed this to increased demand for podcasting from advertisers as macroeconomic conditions continue to improve.
“The continued positive performance of our Digital Audio Group, led by our podcasting business, and the significantly improved relative performance of our Multiplatform Group (up by 11.9% quarter on quarter) during this soft advertising period, are encouraging metrics for us,” said iHeartMedia chairman and CEO Bob Pittman. “We’re seeing indications of improving macroeconomic trends, which we expect to have a positive impact for us in the second half of the year, with most of that impact in Q4.”
Podcast revenue has also continued to increase quarter by quarter, up by 23%, and is expected to continue growing. As podcasting is the primary source of revenue for iHeartMedia’s Digital Audio Group, the company has continued to expand its podcast offering by developing more content for listeners and selling advertising across multiple digital distribution channels including the iHeart Radio mobile application and website.
iHeartRadio is considered the third most popular podcast network in the US as of Q4 2022, behind Spotify and the SiriusXM Podcast Network (according to Edison Research). Recent podcast investments that iHeart has made include launching a sports podcast network with multimedia company Inflection Point Entertainment and partnering with LinkedIn to expand the platform’s podcast offering.
Overall, iHeartMedia’s total revenue amounted to $920 million (£721m) this quarter, which is down 3.6% year on year but still better than its guidance range of a drop in the mid-single digits. COO, CFO, and president of iHeartMedia Rich Bressler stated that macroeconomic improvements in the advertising marketplace will continue to grow its Multiplatform and Digital Audio Group revenue in the second half of 2023 and that the company is expected to have a strong start to 2024 with growth in revenue, profitability, and free cash flow generation. Additionally, the next presidential election will also benefit the company in generating political advertising dollars, Bressler said.