TV rewatch podcasts are a ‘push towards nostalgia’, iHeartMedia CEO says
iHeartMedia Digital Audio Group CEO Conal Byrne discusses the podcast boom, TV rewatch podcasts, digital media creators, and other audio trends.
Video Transcript
AKIKO FUJITA: Well, all eyes are on the streaming space with Netflix earnings in focus. But consumers are increasingly turning to a different form of media. And we're talking about podcasts, of course. TV rewatch formats like "New Girl" and "90210" are increasingly gaining listener traction. To talk more about that, let's bring in iHeart Digital Audio Group CEO Conal Byrne, alongside Yahoo Finance's Ali Canal with us here in studio.
Conal, it's good to talk to you today. Let's talk about these rewatch programs. I know they have seen huge growth. But for those who aren't as familiar, what kind of shows are we talking about? What's the format?
CONAL BYRNE: They sort of run the gamut-- first of all, thanks so much for letting me on the program. They run the gamut. You have this really interesting phenomenon in podcasting-- the latest medium to reach mass reach audiences across the United States, right-- 120, 130 million of Americans a month now engage with podcasting. Inside of that, you have genres that are growing very fast-- sports, comedy, true crime.
But one of those is what you flagged, and it's a bit of a surprise. It's this sort of rewatch category. It encompasses everything from companion podcasts to the biggest shows on streaming platforms like "Bridgerton"-- we did the official Bridgerton podcast-- to casts of older shows that are now getting resurfaced on those streaming platforms, getting back together as a, frankly, excuse to have a conversation every week.
Our biggest hit there is probably a show called "Fake Doctors Real Friends" with Zach and Donald from "Scrubs." Amazing show, shot out of the gate right at the start of quarantine to almost 5 million downloads a month. I think what's driving this is, yes, the resurfacing of older IP in streaming platforms, but also sort of, more interestingly, maybe, this push toward nostalgia and connecting with friends through driving community in a whole new way through podcasting that we didn't predict, but has just exploded.
ALI CANAL: I was going to say-- I feel like the nostalgia element is really real here. But considering there are so many choices right now for podcast creators-- Apple, Amazon, Spotify-- how important is it for some of these platforms to take control and create their own in-house content versus simply acting as a distributor?
CONAL BYRNE: Look, I think it's really important to segment out this industry, because the names of companies that you listed off are actually very different kinds of companies. There are distributors in podcasting-- the apps where you listen to sound, to podcasts. They have zero economics in the podcast industry. They're literally just carrying through RSS feeds, or shows, to end users.
There are sales rep companies that basically tally up and group together as much inventory as they can resell to the marketplace-- not a huge margin in that business, not a very sustainable business. And then there are publishers. iHeart Media, the iHeart Podcast Network, is a publisher. We are the biggest publisher by a very, very large margin in the United States at almost 450 million downloads a month now.
Being a publisher means you own and control shows. You own and control RSS feeds that distribute content out to the masses. And most importantly, you own the business, the economics around those shows. You control the ad loads in those shows.
What that means for creators-- if you work with iHeart Media, our goal is really simple. We want to distribute your content anywhere where listeners want to hear it. We want to meet listeners where they are, regardless of the app they choose to listen on. Because, again, the economics flow back to the publisher.
This, for us, at least, has meant the conversation with creators from Malcolm Gladwell, to Shonda Rhimes, to Will Ferrell, to Charlemagne tha God has been really simple. I simply want to get you the biggest audience possible so I can monetize it as much as possible and distribute it everywhere that we show up, which is everywhere the podcast industry is today. That's made that conversation with creators make a lot of sense to them and have them jump in fast.
ALI CANAL: And let's talk about the economics a little bit since you brought that up. Is there any concern with the impending recession that there could be a pullback on the side of advertisers, marketers? Are there any strategies in place to really offset some of those potential losses? What are the concerns there?
CONAL BYRNE: I think what you have in podcasting is actually opposite. You have this incredibly effective medium. The conversion rate on podcasting by any KPI that marketers or advertisers measure is super strong. You have completion rates on shows higher than other mediums. You have ad skip rates lower than any other medium I have tracked-- down around 10% of people who listen to podcasts skip ads.
90% of people who listened to the iHeart Podcast Network do not skip ads. This translates into an incredibly effective medium that is only growing in audience. So the benefit of somebody like us, candidly, is when you creep up on 450, 500 million downloads a month, you can offer to advertisers all of the demographic and psychographic targeting, the digital media targeting that they're used to in other digital media types.
I actually think during a difficult, interesting, shall we put it, economic time, this is a medium that advertisers lean into more. We've seen that. Across quarantine, we've seen advertisers actually spending more every year in podcasting. It has meant for us that our revenue in Q1, we reported this publicly, was up almost 80%-- 79% year-over-year growth Q1 to Q1 revenue, which is just tracking with advertiser interest.
BRIAN CHEUNG: Now, I want to go back to kind of the rewatch podcast, because I think this trend is so interesting. You mentioned the nostalgia factor. That's certainly a factor for me. The "Avatar," the "Last Airbender" one caught my attention. I'm a huge fan of that.
I see the iHeartRadio logo in there. And I just want you to rewind to a point that you made earlier about the ownership of these podcasts and how important that is. How do you get this content up there? Is it kind of pull or push from the perspective-- or is it you going to these actors and actresses and saying, hey, we'd love to have you put this content on our platform? Or is it vice versa-- they're pitching you these ideas and you're saying, this could be a good sticky demographic for us to put on to our platform for our listeners?
CONAL BYRNE: Great question. And it is both. In the case of Zach Braff and Donald Faison, the "Scrubs" stars, they came to us and said, we have this great idea to launch a podcast because we feel like it's exactly the right time to put a little bit of good back into the world. We developed a show together. We launched it quickly right at the top of quarantine, actually.
In other ways, we'll approach partners and say, look, you have an incredible brand. You're sitting on incredible IP. Audio is the hottest medium in the world right now, the fastest growth rates. You have the latest mass reach medium to hit that mass reach status in podcasting. You should be exploiting audio. You should treat this as a playground.
Maybe the best example is Will Ferrell. Will Ferrell came to us about three or four years ago. And he said, I want to play around with the Ron Burgundy IP a little more. I love this character that I've created. It's this sort of canon of comedic characters.
I want to try it in audio, though, as a challenge to strip away all the visuals. How good, how funny can I make this? He fell in love with the podcast bug-- he got the podcast bug, he fell in love with the medium as this really creatively free, hugely fast growing audience. The next thing we did with Will Ferrell was launch a company.
We launched a joint venture with him called Big Money Players Network. And to your question, how he uses it is almost as a way to develop the next best comedic talent in the United States. The reason that works, that it's worked for him, it's worked for the NFL, it's worked for the NBA, it's work for Shonda Rhimes-- the reason that partnership with iHeart Media works is because at the same time that they can use this as a playground to develop the next best IP, they also know that we can build a business off it in the background by handing all of that audio content over to a sales force of 1,500 people, play strategically across all 50 states. It makes all the difference in terms of actually turning this into a revenue stream for them.
AKIKO FUJITA: So, Conal that leads me to the broader question, which is, how much runway is there left for podcasts? I mean, it feels like we've kind of gone through this evolution, right? I mean, you look at the original players like a "This American Life" to where we are now, where there's a lot more talk involved, but scripted content as well, as you point out, with actors behind them. I mean, are we reaching a point of saturation? Or are podcasts going to continue to feed content? Maybe the pipeline is going from audio to sort of video.
CONAL BYRNE: I'll answer that in two ways. We at iHeart have an unfair advantage here. While there's more podcasts than ever to listen to, and more good podcasts than ever to listen to, when you reach, as iHeart Radio does, 93% of American adults a month across almost 1,000 broadcast radio stations and almost 500 million podcast downloads a month, you have a very, very loud marketing megaphone to shout about new IP, new launches that you can build faster. It gives us an unfair, frankly, marketing advantage, and it's made all the difference.
It means many, many shows that we launch reach that sort of bright line of 500,000 or a million downloads a month very quickly. The second answer to your question is I swear it still feels like podcasting is just getting started. There are entire genres that podcasting is just now dipping its toe in the water of-- the travel genre, the food genre, the fiction drama. Yes, there are great audio dramas out there.
We've put out 10 or 15 really high class, high quality scripted series-- some of them with the best creators in the world, like Will Packer and Shonda Rhimes. But it feels like we're just cracking open what these genres can do in audio. I feel like we're in the first, second inning.
BRIAN CHEUNG: All right, Conal Byrne, iHeart Digital Audio Group CEO and Yahoo Finance's Ali Canal-- thanks so much for that conversation. Really appreciate it.
