iHeartMedia is converting radio listeners to podcast listeners

As on-demand audio consumption rises and radio falls, few companies bridge the divide between broadcast and digital media in a meaningful way. iHeartMedia has made an active effort to compete in radio and podcasting. According to iHeartMedia Digital CEO Conal Byrne, the company’s strategy is to use radio advertising to convert radio listeners into podcast listeners — an example of intentional cannibalisation in audio.

For iHeartMedia, the longer-term bet is either that 1) cannibalisation is more likely to result in a diversification of revenue streams than a complete substitution of radio by podcasts or 2) podcasting is the future, so it is best to convert as many radio listeners as possible now before radio dies out. Either way, given that nearly half of radio weekly active users (WAUs) also listen to podcasts, conversion is a viable and, likely already successful, strategy. In fact, Byrne claims that after heavily running radio ads and in-show promotion for podcasts, “these [podcast] shows started to pop one after the other.” If that conversion continues to happen as radio consumption declines, then substitution becomes a real threat for radio, making iHeartMedia’s decision to accelerate cannibalisation that much smarter as a means of staying relevant in audio.

iHeartMedia's mission is to “give everyone in America a friend who is there anytime”. While a benevolent enough statement on its surface, practically speaking, that means the company wants 332 million active users irrespective of format. Radio, podcasts, or even audiobooks could all provide “a friend who is there anytime”, i.e., that friendly voice in 332 million users’ ears. So long as iHeartMedia has its hand in multiple audio formats, then its mission seems achievable. If radio maintains a baseline of listeners, then the broad reach of the format will continue to provide an important top-of-funnel driver — and additional advertising revenue — for iHeartMedia’s other formats. If radio is destined for demise, then iHeartMedia has still managed to convert its existing radio audience into loyal podcast listeners.

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Business Strategy