iHM's Podcasts Not Dependent On High Priced Talent

Bob Pittman, iHeartMedia’s CEO, told an investor conference Wednesday that his company has intentionally steered away from participating in what amounts to auctions when a big-named talent looks to cut a podcast deal, reports Inside Audio Marketing. 

“The good news is a lot of our podcasts aren’t built around big hit talent,” said Pittman. “Every month we will have a hit podcast that you have never heard of the talent or the story. Those are the real money machines for us.”

Bob Pittman

Speaking at the UBS Global TMT Virtual Conference last week, Pittman did not say whether iHeartMedia had any conversations with big name talent such as Joe Rogan. But Pittman said they often get a first look because not only do creators want to align with what Podtrac says is the largest publisher in the U.S., but they also are attracted to the ability for their show to get promoted across iHeart’s 850 radio stations. 

“We’ve had some talent come to us and we don’t offer them the highest check and there are people who are offering them ‘uneconomic money’ and they come with us anyway because at the end of the day most talent want to be a success. They don’t want to be hidden,” said Pittman. He said many point a perceived loss of momentum for the breakout hit Serial in 2014 after it went exclusively with Pandora as a cautionary tale.

“They come to us, and will continue to come to us, because of the platform we have and our ability to promote the podcast,” said COO/CFO Rich Bressler. “You can have the best podcast in the world, but if no one can find it, it doesn’t do you any good.”

Rich Bressler

The iHeartPodcast Network recently crossed the 500 original shows mark, and Pittman told investors that the economic benefit of podcasting lies with the publisher – and not the distribution of shows – because the publisher has the most to gain by advertising sales. As a result, he said iHeart has no problem spreading its content far and wide rather than embracing exclusive distribution or subscription models. “We put our podcasts everywhere including the iHeartRadio app. But we also use Apple and Spotify,” said Pittman. “Apple is clearly the number one distribution platform, although it is beginning to fragment with others coming in.”

From a financial viewpoint, Bressler told the UBS conference that iHeart’s podcast business continues to have “extremely healthy” profit margins even as the company ramps up its investment in the segment. It is estimated more than a third of the money made goes directly to the bottom line. “We were significantly profitable from day one,” said Bressler. Even so, the overall revenue is still small compared to the company overall which had $3.68 billion in total revenue last year.