By Steve Lapa
Lapcom Communications Corp
President
It looks like the podcast business is hitting those ever-present speedbumps.
No, I am not predicting a demise. I’m just asking why there weren’t a few more hardball questions.
If you sell or manage with eyes wide open, you’ve already read what the February 15 New York Times article chronicled. The cutbacks, drops, and hiring freezes hitting the double-digit-growth podcast business has some in the radio business saying, “Told ya so.”
Who has the chutzpah to say that to Tom Brady and Michael Strahan of Religion of Sports, or Michelle Obama of “The Michelle Obama Podcast?” When your bank account is on fumes, you speak the economic truth. The formula of star power driving unique audio content didn’t instantly convert to super-sized audience levels attracting super-sized revenue. What did VOX, Spotify, Amazon, NPR and other well-respected players miss?
— Never assume, (because assuming…) An out-of-the-box assumption listeners would pay for content to create a separate income stream, didn’t really take. Even the most aggressive marketer would think twice before assuming that listeners generating millions of downloads of free podcasts would suddenly pay to listen. Maybe a select few passionate followers would, but could you change the historic perceived value of the masses? When it comes to paywalls for play, be sure to test, adjust, and re-test before you project income.
— Ad sales sell out levels. A typical podcast has about a quarter of the inventory available in a typical hour of most news/talk and sports talk programs. Yet despite podcasts with limited inventory and higher CPM for host-read ads inside the podcasts, the projections from those well-respected companies tanked. The reason is elegantly simple. Too much podcast inventory chasing too few dollars.
— It’s the economy, stupid. Thank you, political strategist James Carville. The story goes the phrase was on a sign in Bill Clinton’s campaign headquarters and helped Clinton beat Geroge Bush in 1992. Did any of the gurus consider the economy?
— Who would have thought print newspaper sales have something in common with podcasts? Did anyone consider the impact of endless ad inventory becoming a commodity despite celebrity content? Never easy to predict which celebs will convert from the big screen or TV to podcast audio.
I had the privilege of producing cast members of Discovery’s “American Chopper” in a 39-episode podcast series. Even those crazy motorcycle dudes were challenged bringing their millions of TV and online fans to the podcast world. Hindsight is 20/20. Let’s never stop learning so we can always aim for higher earnings.
Steve Lapa is the president of Lapcom Communications Corp. based in Palm Beach Gardens, FL. Lapcom is a media sales, marketing, and development consultancy. Contact Steve Lapa via email at: Steve@Lapcomventures.com
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and networks revenue – decreased $20.5 million, or 4.2%, primarily resulting from a decrease in broadcast advertising in connection with continued uncertain market conditions. iHeartMedia chairman and CEO Bob Pittman says, “We are pleased with our Q1 results given the uncertain environment in which we are operating now, and we think these results demonstrate the resilience and relevance of our products and the tremendous growth opportunity we have with our podcast business in particular.” Company president, COO and CFO Rich Bressler adds, “In the first quarter, we generated Adjusted EBITDA of $105 million, flat to prior year, consistent with our previously provided guidance, and our consolidated revenues for the quarter were up 1% compared to the prior-year quarter, above our guidance of down low-single digits, driven by the Digital Audio Group revenues and Adjusted EBITDA growth of 16% and 28% respectively.”