Whats Going On?
Podcast listening is growing rapidly in the UK, with nearly 6 million adults now tuning in each week, according to research collected by Ofcom.
Ian Macrae, Ofcom’s Director of Market Intelligence, said: “Podcasts are booming in the UK, and broadening people’s listening habits. Every age group is getting involved, but the most explosive growth is among younger adults.”
“Podcast penetration is strongest among the 18-34 demo, which can be difficult for many advertisers to reach.”
As the audience grows, there’s more incentive for quality content producers and celebrities of all types to jump in with their own shows, which in turn attracts more listeners.
The talent base is increasing, with pioneering podcaster Joe Rogan conducting iconic interviews with Elon Musk, celebrities such as Ricky Gervais, Alec Baldwin and Shaquille O'Neal all hosting their own shows, and guest podcasts featuring the likes of Kobe Bryant, Justin Bieber and even a sitting US president.
All of these generate greater listenership and monetization strategies.
What Is Being Done?
Traditional media outlets and broadcasters are embracing the medium, seeing the opportunity for growth, with major players like the BBC and The Telegraph posting their own podcasts.
Investment in podcasting is increasing:
Luminary Media earlier this year raised $40 million from venture capitalists, billing itself as the “Netflix of podcasting”.
Gimlet Media last year closed a $15 million Series B investment round, with British advertising giant WPP investing a $5 million stake.
Wondery, is an American podcast network recently launched by Hernan Lopez, with a successful media programming track record and backing from 20th Century Fox.
Midroll Media who produces, distributes, and monetizes podcasts, was acquired in 2015 by broadcasting giant E.W. Scripps.
What’s Behind The Success?
Podcasts are very popular with advertisers because the ads are much longer with more content and information, they are harder to skip, and they are less predictable than other ad forms due to presenters’ customized “spins”.
Furthermore, a remarkably large number of people who listen to podcasts, listen to the end, with 93% of podcast listeners who downloaded a podcast listening all the way through and 60% of listeners buying products or services they hear about on a podcast.
The outlook remains promising, as the current number of people listening to podcasts every week remains less than 10% of the population, leaving a large percentage of the population yet to be tapped.
Moreover, podcasts are now far more accessible, with smartphones becoming more widespread, as over 80% of the population over 12 own a smartphone today, compared to 14% only 8 years ago, according to a report.
With Spotify’s adoption, the addition of Google’s native podcast player and a large proportion of the population yet to jump into podcast consumption, there is substantial room for it to grow.
Why Are Investors Closely Watching AudioBoom
AudioBoom is a global podcasting platform which announced a trading update with negative news, sending shares plunging over 30% on Friday 5th Oct. The results following a failed acquisition with “a material impact on EBITDA” was enough to spook investors.
According to the trading update, it achieved record revenues for the quarter after year-on-year revenue growth and despite the materially negative EBITDA, there was no cash warning issued.
Subscriptions were up, brand advertiser count was up, and revenue per 1000 listens in the US increased 40%. At the current growth metrics, 2019 profitability has been forecasted. This should come as no surprise given the failed acquisition is a one off expense.
On the day of the trading update and share plunge, newly appointed Chairman Michael Tobin increased his stake in the company by over a million shares, according to an RNS release.
On Monday he further increased his position in the company by another 700,000 shares.
He was appointed as non-executive Chairman of the Company a month ago and granted 30m in share options.
The appointment has had a very successful track record, growing Telecity Group Limited, the FTSE 250 data centre operator, from a market capitalisation of £6 million to £1.6 billion at the time of his departure.
After stepping down he turned his attention to supporting entrepreneurs, businesses and leaders in the digital and technology space, receiving The Order of the British Empire from Her Majesty the Queen for Services to the Digital Economy in 2014.
Robert Proctor, Chief Executive Officer of AudioBoom, said: “These are very exciting and dynamic times for Audioboom and the wider podcast industry.”
He added: “Michael has had a stellar career within the technology and creative sector, leading companies to billion dollar valuations.”
“Mike's experience and knowledge, especially regarding revenue generation and growth via M&A, will be invaluable to Audioboom as we seek to grow within the highly fragmented podcast market."
The platform receives over 60 million listens per month and allows partners to share their content via Apple Podcasts, BookMyShow, Deezer, Google Play, iHeartRadio, Saavn, Spotify, Stitcher, Facebook and Twitter as well as their own websites and mobile apps.
Below is the Vox Markets Podcast which features AudioBoom CEO Robert Proctor speaking about the update: