We taped this episode live at Hot Pod Summit. That’s our conference for the podcast industry. We have a whole newsletter for podcasters. It’s called Hot Pod, written by our very own Ariel Shapiro. Hot Pod Summit is where we bring that community of creators, trendsetters, and decision-makers together to explore the latest developments in podcasting, audiobooks, and more. It was a packed house and a great time.

We ended the day by recording our first-ever live Decoder with Conal Byrne, CEO of iHeartMedia’s digital audio group. Conal oversees podcasting at a giant radio company, and his group accounts for a quarter of iHeart’s revenue, which was $1 billion last quarter alone. His team makes some of the biggest podcasts around, with huge talent like Will Ferrell, Shonda Rhimes, and Charlamagne tha God, who you’ll hear Conal talk about quite a lot.

Conal and iHeart Digital earned that success by doing some unconventional things. Whereas other big podcasting players like Spotify and Apple have tried to boost revenue through subscriptions or platform exclusivity, Conal shunned those approaches and said he’s going for big audience reach, made possible in part by his ability to run ads and even shows on iHeart’s huge network of traditional radio stations.

But that maverick approach has included some controversial steps as well. Last year, Verge alumni and Bloomberg reporter Ashley Carman reported that iHeart worked with a firm called Jun Group to essentially buy podcast downloads through video games. To many in the industry, that seemed pretty disingenuous. So of course I asked Conal about that and lots more. He was a great guest, super game to answer the questions, especially in front of a live audience.

Conal Byrne is the CEO of iHeart Digital. Hello, my friend.

Hey, how are you?

 I’m good.

Hello, everybody.

I have to say people are very excited to hear from you today.

Awesome.

People were shouting questions at me as I walked through the halls. It’s crazy to see your podcast expressed as a series of note cards by the way — it’s very humbling. One of these cards literally says, “What is your org chart?” That is my whole brand. 

I want to start at the beginning. You’re the CEO of iHeart Digital, which is a big company with a long history. It has been a player in the audio space across multiple kinds of distribution for a long time. You came to it through an acquisition. Why did you want to sell to iHeart?

In around 2008, I was the general manager of a company called HowStuffWorks.com, and we were acquired by Discovery Communications. Discovery bought our company because they were about to go public, and they wanted to have a really strong digital strategy. It was a smart move on their part to buy a company like HowStuffWorks.com. 

Our job was really simple. We were a medium-sized website trying to explain everything under the sun through medium-sized articles. Once we were inside Discovery, we suddenly had the air cover of this huge, already global media company, and we could start to experiment a lot with other content types, other stuff. 

We realized that maybe our greatest asset was the people who worked there. They were really good storytellers; they could take anything from air conditioning to artificial intelligence and tell a story about a topic. There was this new-ish thing called podcasting, so we soundproofed some rooms and threw some people in — those people being Josh and Chuck, who co-host Stuff You Should Know and several other shows. 

Cut to 10 years later, and that has become almost as — and in some ways more — successful than the source of it, the website. We spun it out as its own company, Stuff Media, and very shortly thereafter we realized we needed two or three things to grow a lot faster and get a lot bigger. We felt like we were really onto something with podcasting, but we wanted to accelerate it 10 years ahead fast. You always do if you’re running a startup. 

iHeartMedia came along and offered us two or three things specifically. One was just investment. “Make more shows, make more great content, and level up the stuff that you’re doing.” 

Number two was this massive marketing machine. Broadcast radio is a mass-reach medium still today. iHeartRadio, through its broadcast radio stations, reaches nine out of 10 Americans a month. That’s an insanely large but insanely accurate number. We wanted access to that to shout really loudly about the stuff we were doing. 

The third thing they let us do was have a sales team. We had three or four people who were our formal official sales team at Stuff Media. iHeart has 1,300 salespeople in all 50 states across 160 or so markets as we’ve divided up the country. 

Those three things let us go from 2018 to 2028 in our own trajectory almost overnight. The last piece I will say is Bob Pittman, the CEO of iHeartMedia. He founded MTV way back in the day, and he’s had a long career of being the CEO of several companies. He has a certain energy and vision about him, where he’s able to run large companies as if they were startups. This is very immediately notable when you sit in a room with him and talk to him for 30 seconds. That definitely helps, so we jumped in.

I talk to a lot of startup CEOs, and a lot of them who get acquired by big companies. In the tech world, this is a common situation. The things you’re describing don’t always happen, right? The culture is not preserved; the nimbleness is not preserved. In particular, attaching a 1,000-plus-person sales team to a startup usually goes sideways. Is it just Bob Pittman being like, “Chaos reigns. Be a startup,” or is it something that you did?

It’s a great question, because I’ve been on both sides of that. It’s not that being inside Discovery was bad, it was just different. Ultimately, I think Discovery did the right thing by leaning into more of a streaming strategy for their digital media. What that meant for us was that we were not the main course anymore, as it were. 

Inside iHeartMedia, it’s an audio company. It’s what we do. We tell stories through human conversation, more than anything else. There has never been a moment in the company that we were sidelined or deprioritized. It didn’t hurt that this explosion hit podcasting. We predicted it to some extent, we felt that it was coming in 2018 or 2019, but that certainly helped. 

And yeah, a lot of it is Bob Pittman, and his partner, Rich Bressler, and our head of finance, Mike McGuinness. It’s a deep belief in the C-suite across iHeart that podcasting merits a place at the table. It’s never been any different from day one, and it has made all the difference.

iHeart recently restructured and you became the CEO of a formal division. I told you it was all about org charts, and I’m not even to the org chart question yet. You became the CEO of a formal division that’s responsible for podcasts. Walk us through what that actually means. Sometimes these restructures are a little bit fake. This one seems like it’s much more real, and you have a terrestrial radio business that is undergoing its own massive change.

This one was definitely very real. Our podcast division, the iHeart Podcast Network, was seeing explosive growth, and I thought we were doing a good job. Also, the medium was exploding. At iHeart, we felt that we wanted to unlock a lot of the value that we had as a company, and we wanted to make it more transparent to the investor community, to audiences, to researchers, and to analysts.

One way to do that is to create different operating segments in your company so you can talk more about how well you’re doing inside certain divisions and businesses as opposed to it all getting lumped together into one big overall set of numbers. The way to do that was to create two segments in our company. 

One is called the multi-platform group. It comprises broadcast radio, live events, and a few other things. The other is the digital audio group. That comprises all of our social media assets, all of our websites, a huge streaming business, a lot of the innovative tech work we do — like how we launched iHeartLand in Roblox and Fortnite — and podcasting. After two or three years of just running the podcast division, I was made the CEO of the digital audio group. What it allowed us to do, along with a lot of other stuff, was to talk more freely to the market about how well this segment was growing, specifically podcasting. 

To be clear though, there’s a whole lot of fluidity between these segments. One thousand or so of the sellers that I mentioned sit in the multi-platform group, and they certainly sell all the assets we have. We have this mantra at the company that “Any seller can sell anything any day of the week wherever they live and work,” and that has rung pretty true. That’s driven most of our growth in podcasting over the last two, three, four years at the company.

If I was to reframe what you just said more rudely, you could say that you have a division full of older distribution and you have a division full of newer distribution. Some of that newer distribution has proven out, like podcasting; some of it is Roblox. You could also say that you have a division that might be declining and a division that might be growing at a faster rate. Is there any tension there at all?

Oddly, no. I’ve learned about this a lot, and I’ve talked about it a lot as I’ve learned it. This may be debatable, and may feel like an affront to a lot of folks in the room who live and breathe podcasting as an “original medium.” But I have learned firsthand and talked a lot about the extent to which broadcast radio talent has honed this craft of conversation over the last hundred years and certainly the last few decades, and the extent to which that has driven our medium, just sheer talent hitting the medium, but also with an awareness of the medium. 

The easiest example for me is Charlamagne tha God hosting a show called The Breakfast Club out of Tribeca every morning. This show is also a podcast where we capture the file, distribute it as an on-demand thing, and then it drives upwards of 15 to 20 million downloads a month. He also co-owns a company with us called The Black Effect, that he 51 percent owns. It has 29, 30 podcasts under it, and it alone drives 15 to 20 million downloads a month. All I see is this constructiveness across these two segments. 

There is very little competition, and there’s very little, “They do that and we do this.” In fact, I think the only way we succeed, and the reason we have succeeded, is that it has been quite the opposite of that. In my opinion, I don’t think we would be where we are as an industry otherwise. I certainly wouldn’t be where I am as a podcast network without the support of not just the sales team, but the creative juice of the broadcast radio guys.

One of the themes we come back to on Decoder over and over again, especially when I talk to creatives or creative executives, is that your distribution fundamentally shapes what you make. If you just describe to me the constraints of any distribution platform, I can tell you what you’re going to get. YouTube is a good example of this. We all know what a YouTube video is, because YouTube has designed the constraints of the platform to produce that thing. 

Radio and podcasting have very different constraints. You’re saying, “Oh, there’s a seamless back and forth,” but surely you must see, “Oh, okay. On this distribution I make this. This is what the audience wants.” Terrestrial radio distribution is a thing that we’re all very familiar with. Where’s the tension there?

It’s a great point and question. It has been a pitfall of digital media from day one. First of all, search engine optimization, period, is a version of what you’re talking about. You start to reverse-engineer all the content you make because that works best on such-and-such platform. There was a moment on YouTube, around 2010 or something, where we all realized the same thing. It was like, “The optimal video is this length, and you have to open with this thing and close it with that.” 

To some extent, you kill creativity and true innovation when you start to reverse-engineer what an asset should be for the content platform it’s going to be distributed on. In fact, you almost certainly kill true creativity when you hit that moment. Podcasting — not to your question, but as a side answer — has bucked that a lot to date. It has resisted this notion that a podcast episode is supposed to be 28 minutes long and have two ad breaks. It’s actually a lot of different things. It can be a true crime limited series of eight to 10 episodes that are 30 minutes long, or it can be a “stuff to blow your mind” episode with just two guys talking for three hours. Both are completely okay and actually really perform well. It hasn’t yet hit this moment of reverse-engineering from the platforms it’s on. 

But no, you’re spot on. Broadcast radio is a highly formatted media type. I think if you were to sit down with any of these creators who are on broadcast radio, they would openly say it to you. The other day, we were talking with Angela Yee, who was a former co-host of The Breakfast Club and has started a new radio show on iHeart called Way Up. She said, “On the podcast, it’s much looser. It’s clearly not as regulated as radio. I can talk about the things I can’t talk about on the radio. I can talk about sexuality or about what trends I do or don’t like. I can go on as long as I want.”

I think there’s a creative freedom to it that allures a lot of people, but it doesn’t have the mass reach of broadcast radio yet. The allure backwards to radio is that you have true mass-reach audiences, which I think brings them back.

Are you converting off the radio? Are you programming across to the radio, saying, “We’re going to run ads for our podcast on the radio, and you’re going to come listen to it”?

I think we’ve said this publicly. We spend $120 million a year — it was something specific like $113 million a year the last time we said this out loud — of our own on broadcast radio valued impressions or commercials to promote our podcasts. I’m proud of the numbers. At the iHeart Network, we have about 70-ish shows in the iHeart Podcast Network that drive over one million monthly downloads or more — some of them way more. Stuff You Should Know is usually up in the 40s. A million monthly downloads or more is a ton. Anybody in the room, and most of us do work in podcasting, know that number is harder and harder to get every day. The only reason we have that number is because of broadcast radio marketing. 

Here’s a funny anecdote. When we launched The Ron Burgundy Podcast with Will Ferrell four years ago, we gave him a really big gross radio point push across broadcast radio. We ran a 30-second ad for The Ron Burgundy Podcast on broadcast radio every single hour in 160 markets. It was the only time I’ve ever gotten a call from somebody. Will Ferrell was like, “Please, please stop running so many ads,” but it worked. I didn’t know if it would work, but these shows started to pop one after the other because of the broadcast radio promotion that we were giving them. We give a ton of in-show podcast promotion as well. But yes, we’ve seen that convert.

Do you convert people to Apple Podcast or to Spotify? Do you care?

We don’t care. If it’s a jump ball, I’d love them to use the iHeartRadio app. I understand where we sit in the pecking order in terms of cume.

No, I admire your optimism.

I want you all to download the iHeartRadio app. This is like a $1,000 CPM host-read ad right here.

He’s going to leave now. He only came on here to pitch the app.

No. We’ll tag all of our spots on air with, “Listen wherever you get podcasts.” We’ll say our own app, but then we’ll say other apps too. We are an obsessively, widely distributed content company.

This is a split, right? On the other side of the business, you own the distribution. You own the radio stations and you program them. Bob Pittman can buy Stuff Media and say, “You know what? We’re going to build the podcast business by running Will Ferrell at you until you’re sick of it, because we control that inventory and we control that distribution.” 

Do you worry that you don’t have the same control? I mean, aside from the iHeartPodcasts app, obviously. By the way, put TheVerge.com on the home screen of your phone. Like I told you, we all have the same problems. The iHeartPodcasts app aside, this is an inherently decentralized medium with lots of different players, lots of different controls, and lots of different monetization schedules. Does that worry you?

No, because podcasting is a decentralized medium insofar as its distribution is concerned. It thrives when it is a widely distributed medium. It is a centralized medium when it comes to RSS feeds. We take this for granted as creators, as publishers, and as networks. 

But to tell it in a reductive way, 20 years ago, when some folks were sitting around a table deciding how they were going to distribute all these great podcasts they were going to start making, they could have used several different technologies to do that. They could have published them on YouTube. They chose a real simple version of it called Really Simple Syndication, RSS feeds. This changed everything for podcasting. It made it the medium that the internet promised creators it would give them but hadn’t yet. 

If you’re a creator on YouTube, it’s a terrific platform and incredibly creative, but you don’t own your fan base. This is obvious at this point. We all get it by now, painfully. In podcasting, it is fundamentally different. As a creator or a publisher, I can plug my RSS feed into a distribution app if I so choose, and people subscribing to my RSS feed. They’re mine.

Are they yours if they’re subscribed in Spotify? There was a YouTube announcement earlier today. Are they yours if they’re subscribed on YouTube?

I choke my audience if I choose to pull my RSS feed out of a distribution app, because people who go there and expect it there won’t see it anymore. But I still own and control the pipe. Whereas if I were to decide to stop distributing or making content on my YouTube channel, my brand just goes away. It’s gone. I could try to convert people to a different platform to keep that audience relationship going post my YouTube channel. It is possible to that extent, but it’s hard to convert to a new platform. It’d be like being able to walk away with your channel.

This has made podcasting different. It’s why we widely distribute. Otherwise, I’d be sitting up here saying, “We are really working hard to get everybody on the iHeartRadio app.” The business and the economics of podcasting today still sit with the creator and the publisher, because you own the pipe that you distribute your shows through. I haven’t found a business model that proves it differently, so I think it behooves all of us to plug that pipe into as many distribution points as possible.

I will say one more thing. It has made conversations with creators really simple, because you can rest assured that at some point in the conversation they will ask, “How are we going to distribute?” Let’s hang with Will Ferrell for a second. He’s like, “I want to get as much audience as possible. I make content. I think it’s going to be good, and I want to put it in front of many people.” There’s no asterisk on the answer back to him. “Yeah, we do too.” It’s really that simple. “In fact, we’ll distribute it on broadcast radio,” and so we did. The Ron Burgundy Podcast was distributed as a show on late Sunday night on broadcast radio too. There’s no ulterior motive or different goal. 

Yes, it’s about my competitors, I get it. But I also think it fundamentally tripped up a little as a business model. It said, “Let’s do mega deals.” That could be worth it, if a creator is that good, you may want to pay that. Where it tripped up is with these exclusive distribution models that made sense for streaming services, like Netflix, Hulu, and maybe Prime, because they were solving problems. In this one, I couldn’t identify the problem that it was solving, and therefore I think the industry tripped up on it.

I want to come to exclusives and to consolidation. You have sat out a bunch of stuff, you have sat out subscription, but I just want to sit with distribution for one more second. The money from each of these pipes is not the same. The money you might get from overserving the Spotify audience or doing marketing on Spotify to get downloads does not necessarily result in the same return. If you were to just run the audio on YouTube, and say there’s a YouTube audience here, it’s probably a very different return based on how that ad model works. Do you look at your distribution endpoints and say, “That one is the most lucrative one, and this is a less lucrative one that we should focus on”?

All of the distribution points that we distribute to today through RSS feeds are equal to us in terms of the money we make, because that’s just how RSS feeds work.

You’re doing ad injection into the feed? Into the whole thing?

You got it. We’re in total control there. The creator and the ad-serving publisher, in our case, are in total control.

How do you reconcile the metrics across?

To answer your other question, if this industry were to wholly move to a platform like Facebook or YouTube, it’s a different platform. You would have a platform tax that has not yet been introduced into podcasting, and may never be introduced. 

It makes sense to me why a platform like YouTube, which is a wonderful platform in many ways, would smartly say, “This is some of the best content in the world, we’d like to distribute that.” But it’s a different business model, and you just have to be aware of it. That’s the only difference so far. Everywhere we distribute to today — and candidly, where the lion’s share of our listening happens — is on platforms that are all created equal in terms of the economics that flow back to the publisher, in this case, iHeart.

I talk to a lot of digital media CEOs and digital media types. Most of them are like, “Facebook won’t give us the time of day. Google won’t give us the time of day.” It sounds like you think you have some leverage over the platforms. Is that how it goes when you talk to these folks? Do you even talk to them, or are you just like, “Screw it, take my RSS feed”?

We do talk to them. Google and YouTube are awesome.

There’s a sigh of relief from the YouTube people somewhere.

Yeah. They’re all like, “Oh, thank God he said that.” I don’t pretend to know what’s in their heads. This may be cheesy, but they seem to be genuinely in love with the medium, like we all are. I fell in love with this medium 10 years ago. That’s important, because I think they want to do the right thing by the medium. 

Facebook’s interest has grown and waned and grown a bit on podcasts. We’ve all seen this, so I’m not saying anything privileged. Over the last 10 years, I think it has been a question of them figuring out what they are as a platform and what the next chapter for them should be, whether it’s the metaverse or just doubling down on making newsfeed better. There have been moments in the last five to ten years where Facebook has shown real interest in audio, and then they’ve backed off the two or three times that has happened, so I’m not sure.

I would say it’s a broad story across digital media that Facebook wants something, everyone is going to make it, then they will turn off of it and all those businesses will go away. You brought up SEO. Google wants something, we’re all going to make it, then they’re going to turn it off, and a bunch of businesses will die. ChatGPT will eat us all. Live it up. Is that present for you? Do you think that you’ve built a business that is resilient to that kind of platform shift, or is the answer just RSS feeds again?

I do. I don’t have this concern in the same way I had it when I was writing text-based articles for HowStuffWorks.com 20 years ago or when I was focused on social and digital video at Discovery Communications. You were always worried, like, “Oh, man.” But I’m always at the beck and call of the platforms I distribute on to a crazy, existential extent. I don’t have this concern in podcasting. 

Perhaps it’s because there is nothing broken in the distribution and monetization model today. Nothing’s perfect, but it’s pretty close to perfect. You have a distribution model that is free. You have an ad load that is light. You have a content type that is the highest quality in the world, I would argue, out of any content getting made today, except maybe TV, which is pretty good right now — but we are right there next to it. I struggle to see something broken with this. 

Even if ultimately it was frustrating to the creator network, usually when there was a huge shift in a business model, the newer platforms were fixing a problem. We may not have liked it, but there usually was a problem getting fixed. Again, streaming was a really obvious example of this for TV streaming companies. I don’t see it in podcasting, and maybe that’s why I’m not super concerned.

Last year when we were all in this room, we could not stop talking about Spotify. This year, we’re all talking about YouTube and video podcasts.

And iHeart.

Well, yeah. You’re here.

And org charts apparently are coming.

Oh, it’s right here. It’s happening. I’m building up to it. No, for real. We were talking about these giant platform companies. Have you had conversations with Spotify about making stuff exclusive?

Making stuff exclusive to Spotify? No.

Would you ever?

No.

That’s just ideological for you?

No. I will test anything. I don’t see a reason. To put it simply, we have a platform. We have an app of our own. I can test exclusive or windowed content there. We’ve dabbled in subscription channels on Apple Podcasts, just because I had creators who came to us and said, “I’d like to try this.”  We are very proud of this. We’re a very good partner with creators. We tried it. It’s not a huge focus for us. Again, I hate to keep repeating it, but I don’t see the problem I’d be fixing.

Yeah. This is the org chart question now. It’s finally arrived.

Thank God.

I know. It’s the suspense for the org chart question. It sounds like you have things figured out, that you have confidence in your business. How have you arranged iHeart Digital? What’s the structure below you to make all this work?

I don’t know that we’ll have a big reveal. There is a product lead; Uta Knablein is our chief product officer. There’s an engineering team that has maybe 100 people at the back end of all of our digital products. We obviously have a podcast team, run by the president of the iHeart Podcast Network, Will Pearson. He’s fantastic. He had a similar trajectory to me; he came from MentalFloss.com 20 years ago.

Oh, wow. He’s like an internet OG.

Yeah. He founded it in a Duke University dorm room, and now he’s found his way into podcasting. So he had a similar trajectory, and he’s a wonderful guy. We have a huge digital revenue sales team run by Carter Brokaw, who’s fantastic. 

I end on this team because it’s very important, we have our business affairs team. We do a bunch of partnerships with a lot of creators and a lot of distribution platforms. There are iHeartRadio streaming channels that show up on your electronic programming guide on Roku. We also co-own a company with Will Ferrell. Our business affairs team is busy and accounts for a lot of our growth. That’s loosely how it’s org’d out.

The reason I ask that question all the time is because I’m always curious. I think every CEO has but one tool, and it’s shuffling the org chart to solve problems. Sometimes they just shuffle it to create change. I know you do. Everyone does it. But if you listen to this room over the course of the day, we’ve probably said podcasting is in its infancy 100 times on this stage and in the breakout rooms. You are describing a mature company. A company that’s like, “A lot of action is in business affairs,” is a company that has figured out a bunch of stuff. It’s just like life. A Hollywood studio at its peak has a bunch of studios and a roomful of accountants doing billing on syndication across companies. Do you think the industry is mature enough to be like, “Actually, what you all need is a business affairs group”?

Yes and no. So, I have four kids…

Which one of your children is the business affairs group?

They’re all looking for internships. The oldest one, Pierce, is 17. He’s going to start this journey now of trying to get into college. I’ll answer it this way. He’s like, “How did you decide what you’re going to do?” I said, “All I can tell you is,” and this is where he rolls his eyes, “is that the job I have, the industry I work in, didn’t exist when I went to college. There was no digital media when I went to college, let alone podcasting.” So I said, “All I can tell you is just have your aperture be wide open, man. Be wide open to new industries and new things inside that industry.” When I told him this, I was like, “You know, like the blockchain!”

Oh, God.

This was a year ago, and so now he’s like, “Whatever, dude.” You take the point. 

I didn’t think I would have or need a robust business affairs department two years ago. Are we mature enough as an industry for every medium-sized network or larger to have one? Sure we are. We’ve arrived. Podcasting is a mass-reach medium. Eighty million Americans a week listen to podcasts. One hundred and twenty million a month? Eighty million a week is the more interesting stat to me. We are a mass-reach medium.

In Chicago, I sat in front of OMD. The day before, I was with Publicis. Next week, I’m with Universal McCann. All I say to them is, “This is no longer an experimental bucket of marketing. This is a must-buy bucket of marketing. You just saw it happen. The newest mass-reach media just happened, and it is called podcasting. And by the way, it’s not slowing down.” Our downloads were 412 million downloads in January, and that was up 12 percent from the month prior. 

Do I think we’re mature enough to have all of the things that a big, respectable, grown-up-table business should have? Yes, of course we are. We’ve earned this. Everybody in this room has worked damn hard for the last 20 years to get to this point. For sure, we deserve and need it.

You brought up your numbers, so I have to ask you about them. Notable Verge traitor Ashley Carman, who is in this room somewhere, wrote a great story at Bloomberg about Podtrac and how you might be inflating those numbers with mobile game downloads using the Jun Group. Are you doing that?

No, we don’t.

You don’t? You’ve never bought downloads to run game ads?

No. We used Jun Group. We’ve talked with Ashley a lot about this. Jun Group is a vendor that drives marketing for podcast companies that is targeting mostly gamers, whether those are gamers playing Subway Surfer or people who overindex for the metaverse. We have experimented with Jun Group across the years. I think our stats were something like never more than 1 percent, 2 percent, 2.5 percent of our downloads in any given month. 

We were especially interested in it recently because we were launching a thing called iHeartLand, which was basically iHeartMedia as a Roblox map and an island in Fortnite. We were especially interested in, “If we got gamers into our podcast network, could we then bring them into these live shows in iHeartLand?” We don’t use it anymore.

Look, iHeart is an old company, it’s a radio company, and Bob Pittman built it in a very particular way. Radio is a more ruthless industry than podcasts. Was there ever the thought, “Hey, as long as we’re getting listeners in the door and making these numbers go up, some of them will convert and stay”?

What do you mean?

I think most podcasters are bad at marketing. Even Decoder is bad at marketing; this is as much marketing as we’ve ever done. Our marketing people are here, you’re very good. I love you very much. The idea that we’re going to run ads at scale and on broadcast, that we’re going to put the local news anchors on the side of buses, this is not this industry. If any of you are buying bus ads, please let me know, because I’m dying to know how it works. We’re going to buy ads somewhere where someone will push the button and download the episode, the number will go up, and hopefully some of them will stay.

I see.

It’s not the kind of game that is usual in this industry.

Right. No. We do not do that.

How do you think about audience acquisition then?

Well, we have over $100 million a year in broadcast radio marketing. We run billions of podcast impressions in a month to promote our own shows and our partners’ shows. We also have a digital marketing team, I forgot that in the org chart. I’m going to get in trouble too, just like you are.

Yeah. The BD team is livid. The marketing team is like, “What are you doing?”

Yeah. They’re killing it right now. I think our marketing team spends literally 95 percent of their time thinking about how to deploy what we’d call house ads, and then maybe 5 percent of their time on paid marketing. Paid marketing is still helpful, but like 95 percent of that is Facebook marketing for a specific show if it wants to hit a very specific demographic. Ninety-five percent. I think I’m being conservative with how much of their time is spent on, “How do I deploy billions of impressions of house ads a month?”

Is that something you think about as targeting? The standard Facebook line is, “Okay, you’re going to find your customer. You are going to describe them to us, we are going to put an ad in front of them, and it’s going to convert,” and then maybe Apple will ruin everybody’s business with ad tracking. But that has been their promise for years, and it might still be their promise. If you were to ask the n+1 digital marketer, “Where is the best place to spend your dollar?” They’re still going to say, “A Meta platform,” or they’re still going to say, “A Google platform.” They’re not going to tell you that you should buy billions of podcast impressions yet. Are you saying, “It’s actually billions of podcast impressions”?

Absolutely. And I’m actually saying they should also buy broadcast radio, and I’m not in the multi-platform group.

Yeah, but the shares go up either way.

But I’ll talk you through why. Some of this is obvious. Like you said, yes, targeting is getting harder for digital social media platforms. In some part, because of what Apple’s moves are, but it’s getting harder. CPMs are going up and the quality of the online ad marketplace is going down. These are objective truths. If you’re a marketer, and this was a well-worn, tried-and-true way to market over the last 10, 20 years, that just got a lot harder. We’re starting to use words like “cohorts” instead of “one-to-one targeting.” It’s confusing and it’s less effective. 

We haven’t even discussed the trust issues that are very real on social media. Folks trusting social media less, influencers having less success on social media because of that, and therefore marketers being like, “I don’t know what to do with this. It used to be tried and true, my go-to tool, and now it isn’t.”

As that has happened, this thing has come along called audio. In fact, it was always there, but now it has exploded. All of our attention is on audio now because of podcasting. Because you have this new platform that’s incredibly cool, and lots of great creators using it, and it’s 80 million Americans a week. The truth is, audio all-up is a third of all the media we consume. Think about that for a second. We ran a third-party research study two years ago with WARC. A third of all the media we consume is just audio. By the way, 75 percent of that third is broadcast radio. It’s a massive amount of the stuff we take in and that we call the media.

I’ll end on this. If you’re a marketer and you hear that third stat, you’re like, “Wow, a third of all the stuff that people take in is marketing. I wonder how much I’m spending on audio marketing?” That number is usually nine or 10 percent of their overall investment. It’s just a disconnect. 

These are marketers who are usually really good at this stuff — like really good. This is what they do really well. “I know exactly where to find that demographic, that psychographic, or that particular male 18- to 34-year-old who wants to buy a truck in the West Coast.” But they’ve just created this gap between where users are, where ears are, literally, and where their investment is. That’s what we’re trying to true up. Podcasting is helping us do that, because t’s grabbing so much of the oxygen in the room, especially in the last year or two, and now people are like, “Oh, wow.” It’s a way for us at iHeart, candidly, to pull them into audio all-up through podcasting. It’s been cool.

Is radio the upsell on podcasting for you? That’s what it sounds like.

It often is. You walk into a holdco in New York and you’ll say, “I know we’re going to talk about podcasting today. By the way, if you love digital audio, and we all do…”

This is the only room where you can say that and people perk up.

Yeah. If you love digital audio and you want real reach, there is no way to get real reach in digital audio. As much as I would love this to be the case, there is no way to get real reach in digital audio unless you contend with and purchase broadcast radio. 

To try to help with this, iHeart, the multi-platform group, built a product called smart audio that’s really cool. They take our panel listening on the iHeart radio app, look at it by geo-territory and day part, and they tie it back to the shows that you’re listening to on air. So now it’s digitally infused, data-infused listening that they can target digitally. They have taken this nine out of 10 American adults a month and just informed it with a digital listening panel. 

I only say this to you because that’s how we do that sale. We’re like, “Hey, you should buy podcasting. You should buy streaming. Here is your reach extender. If you don’t do this, you will never have the reach you need in digital audio. Maybe one day you will, but not today.” Yes, we do that all the time.

I look at the companies that have the targeting capabilities. Yes, there’s some Apple chaos in the mix, but Google, Facebook, Amazon — which secretly has a gigantic advertising operation — are all hurting. Are you feeling the pinch of the ad downturn?

The short answer is, no, we’re growing. The longer answer is, we’re in an odd economy. We’re all watching metrics daily — inflation rates, interest rates, unemployment rates, the Ukrainian war. We need certain things to calm down and other things to end. I think marketers in this moment are actually not turning down in advertising as much as you’d expect. I think some of that is because a lot of the folks who are in power at marketing companies were also in power 10 years ago when the last major downturn happened, and certainly two, three, or four years ago when COVID-19 hit.

I don’t think this is wishful thinking. I think it’s real. I think they know the effect, long-term, that you have when you stop marketing. So there’s a little bit more of a prioritization of continuing marketing, even through a strange economy, that there might not have been if the memory of COVID-19 wasn’t so fresh, that’s helping us a little bit. 

I also think there’s a new thrust in influencer marketing. It kind of never went away, but now we’re back to this again. Maybe it has something to do with the tools of targeting getting harder, so people are just cycling back to, “Humans, tell my story on the platforms where you make stuff.” Podcasting, in particular, benefits from this. Simply put, the whole podcast industry in one sense is just the most amazing, best storytelling group of influencers to hit media in a really long time, so we benefit from there being new attention on the influencer market.

I feel like an early version of the podcast industry was entirely built on host reads for direct-to-consumer brands. We all did it. You can feel however you want about it, but we all did it. The toothbrushes were great. Those companies are also struggling. Is that still who you’re pitching to, or are your publicists saying, “All right, GM, Will Ferrell is going to read about electrification today”?

Yeah. That’s a super good question. I think the first five or six years of the podcast industry can honestly take credit for several companies that are around today, like Mailchimp, Blue Apron, and probably the mattresses that we all sleep on. I know that sounds crazy.

It’s because of the venture capital money.

That too.

Did the businesses survive? Who knows! 

We saw a shift from performance marketers or direct-response marketers into bigger brands thanks to ad tech evolving fast in podcasting. Dynamic ad insertion and geo-targeting made lots of stuff possible. Competitive separation, category exclusivity, and share-of-voice conversations suddenly became possible when you could dynamically insert into ad tags. That wasn’t possible prior. I know I’m sort of recapping the obvious, but this was an inflection point in our whole industry, that you suddenly had big brands and sometimes big holdcos swooping in and wanting to invest in podcasting.

There were lots of things that moved what were initially experimental marketing dollars from those big brands and holdcos into permanent marketing dollars. People trust podcast content more than they trust what they see on social media by like 60 percent more. Sixty percent of podcast listeners have bought something because they’ve heard about it on a podcast. It’s another 60 percent — this is the only reason I remember these numbers — or more specifically, like 57 percent, of marketers currently spending in podcasting are going to be spending more next year, not less.

This has made direct response brands’ lives a little harder, because now there’s a lot of competition for their best-kept secret in marketing for like five or 10 years. We’ve actually noticed in the last two or three months that it’s a very timely question for us at our businesses, because I feel like we’ve moved off the direct response business too fast. I feel like it’s still a thriving business. There are huge, great ad agencies like Ad Results, Veritone, and Oxford Road who do great business for performance marketing companies. If anything, we’re making that more of a focus and paying more attention to it in the last two or three months. I think we moved off it too fast and I think it’s a robust business we should still focus on. It’s also how we got here.

When you say “direct response” in the context of performance marketing, these are the words the ad agency invented to describe very simple concepts. With podcasts, you’re talking about promo codes at the ends of the ads, right?

Usually, yeah. It’s a great question, because isn’t everything direct response at the end of the day? Yeah, you’re right. It’s redemption codes and URL codes. It’s why those guys initially were the first people to jump into podcasting, because the only kind of marketer that doesn’t need your data is a direct response marketer.

Is there any way to actually innovate? You’re saying we have to innovate and push back in it, but it’s still just promo codes.

I don’t know. I don’t know that it needs innovation. It’s worked for them for 10, 15 years. I think we can do all the innovating with different kinds of marketers from bigger brands, bigger budgets, and maybe long-term, multi-year campaigns. 

When we launched a company like The Black Effect with Charlamagne, we had huge annual sponsors that were deeply ingrained in that company. We were actually working and trying to make change together genuinely. I think that it’s okay to innovate over here, and with the direct response folks, they innovate in their own way. You’d be surprised actually, as much as it may sound nuts, the extent to which you’re innovating by iterating many different reads, at many different lengths, and many different placements across a show. I know that sounds like, “eh, it’s kind of boring.” It’s not for them, it’s a multi-billion-dollar business, so I want to be more a part of that.

Glass-walled conference rooms where they just come up with funnier promo codes? That’s a meeting I want to go to. I’ve always thought about it. We have a few minutes left. You mentioned that you had experimented with subscriptions. I’ve listened to you in the past. You’ve been more or less anti-subscription. Why is that?

I just don’t see it fixing anything that’s broken. It made perfect sense to me as a consumer 10 years ago or so when I subscribed to Netflix. The problem it was solving, the price point was undeniable, it made perfect sense to me. I can’t find the reason in podcasting. 

I’ve never seen a medium move from  widely distributed, free, high quality, and low to no ad load, move into a paid medium with exactly the same assets. When you pay for a subscription on most platforms, and you receive a podcast that somebody else is piping into that platform through an RSS feed, nothing has changed about it. You’re still getting the full ad load. I’ve just really struggled to understand why you would do that. 

Also, subscription models usually come with exclusive or windowing of content, which I think you’re starting to see with creators. I don’t think there’s a creator on the planet who is interested in literally decimating their audience size, even for the sake of a big check. That’s interesting. I think that’s creator psychology, like, “Actually, sometimes it’s more important for me to have a large listener pool than it is to have a big check.” Some of the press recently has focused on that, and I think it’s smart.

The counterexample there is obviously Joe Rogan at Spotify. Huge exclusives, Spotify got whatever out of it, we don’t know how Joe Rogan feels about it. Then on the other side, you have MrBeast, who literally gives away money to start a hamburger chain that will make him a billionaire.

Are you on the side of having a wide distribution and using that to convert against whatever your other business is?

Yes. We widely distribute.

Is that a pitch you make to creators?

Yes. When we sit with Malcolm Gladwell, Shonda Rhimes, Questlove, or Charlamagne tha God, our own radio DJ, the pitch is, “I assure you every single episode of what we make will be available to any listener, wherever they want to pick it up.”

And that will lead to conversion for something else for you?

That’s right. Sometimes.

Sometimes.

Or this will be a business in and of itself, and that’s fine too.

That was my next question there. Do you offer rev shares to your creators? The math works out with subscription, but I’m not sure how it works out with advertising.

Yes. The core fundamental, pretty consistent business model of podcasting is a rev share model.

None of your creators are saying they want to line up subscriptions to take rev shares off the subscriptions?

No.

How do you account for that? They’re not in charge, right? They’re just trying to grow their audience while you’re selling the ads.

It’s always collaborative with their approval. As two easy examples, we have multi-year relationships with Malcolm Gladwell and Pushkin Industries and then with the NFL. Two really different examples.

Malcolm Gladwell has an existing slate of shows. Our partnership with him is to monetize his shows better than he thinks he could himself, but to also co-produce a whole new slate of shows. And then overlay iHeart marketing across all of it, so we grow the whole thing bigger and be able to make more revenue together. We do all kinds of advertising models with Malcolm and his team. We’ll do standard, straight-up, quick-turn, host-read ads. We also have an original content series we make with IBM called Smart Talks with IBM. That’s actually a podcast we make together that’s actually awesome. And everything in between.

The NFL is very similar. They had seven or eight podcasts that they were making. We had a good relationship with Roger Goodell and the league. He was like, “I believe in this medium. I think it’s really cool. I just don’t know that we at the NFL are going to get this as right as you guys might, as fast, and we want to partner with somebody really big.” It’s a very similar model to Pushkin Industries. We pulled in their seven or eight podcasts with the promise that we would market and monetize them better. We’re also co-producing a slate of whole new stuff. 

I hate to answer it so vaguely. It’s incredibly collaborative. There is no moment where they’re surprised a month or two later that such-and-such advertiser has been underwriting their entire slate and they hate that brand, or something like that. That’s not really how it works. I think it’s high attentiveness at scale with partners that we’ve been able to maintain so far.

We have talked about a lot of your shows, and we have talked about all of the new things you’re doing. iHeart does a lot of new things. There is always something new happening. I have a card here that says “NFTs” on it. I feel like I already know how it went. How did the NFT thing go? Lightning round. Up or down on NFTs?

We did a…

No, lightning round. Up or down.

It went okay?

So, medium.

We’ll see. We’ll see.

Fair enough. I was like, “I don’t need you to talk more. I just need answers.”

“No, lightning round.”

Yeah, we did a great Decoder episode with Chris Dixon, the lead partner for that stuff at Andreessen Horowitz. It didn’t go well for him either. Not great. That’s where the VC money went. 

You launched a lot of new stuff. Just before we started, I was looking at your website. There are lots and lots of podcast titles, lots of celebrities in the format, lots of rewatch podcasts. There are these formats that hit, the things you lead with, but then there is an enormous long tail of stuff. Because if you’re launching new stuff, you’ve built the archive, you built the library. How do you tend to the things in the library that aren’t the celebrity shows? How do you make sure they get attention? How do you make sure they sustain?

Are we still in the lightning round?

No.

Then the medium?

The medium. Thumbs up or thumbs down, library.

I’ll give two answers. It’s not mutually exclusive, first of all. We started a company with Will Ferrell called Big Money Players. The reason we started this company was because I think he genuinely had a blast making The Ron Burgundy Podcast. I think more importantly, he saw the potential of the podcast medium to be a way for him to find, develop, and break new comedic talent in America. 

There’s this adage for anybody that has worked in video. “Fast, cheap, and good. You get to pick two.” In podcasting, I think he realized, “I don’t have to pick. I can get all three, all the time. This is very unique.” So we launched a company together.

My point in answering this way is that he uses this company, to some extent, to find new comedic talent that is the long tail you’re talking about. In the Big Money Players network, comedic talent like Langston Kerman or Carolina Barlow are right alongside folks like Bowen Yang, Nikki Glaser, or Eric André. That’s really cool, but it’s not mutually exclusive. 

The second thing we do is spend a lot of time focusing on every show that we have on our network. We try to organize them into slates that have EPs and producers on top of them. It’s back to the org chart a little bit with this.

It’s all about the org chart. Every single question is about org charts.

We do this so no one ever feels like, “I haven’t heard from iHeart in a month.” A decent example of this is a program we have called NextUp. I think it’s the single thing I am most proud of at the iHeart Podcast Network. We basically built an academy where once a year we grab eight or 10 people. They apply, they get admitted, we build a bit of a podcast studio at their house, we teach them how to use the gear, we teach them how podcast marketing should work, and most importantly, we teach them what a business deal should look like in podcasting, so that they know walking into it. Then if they want to, we launch their podcast with iHeart Podcast Network. You talk about that long tail content, this has borne out some of the most amazing stuff we’ve made. It has brought in underrepresented creators like nothing else we’ve done. 

I’ll give you an example of a show. A guy did a show out of Alaska where he was one of 20 or 30 people who spoke a dying language. He used his podcast as a way to capture that language and report on how a language dies off the face of the earth, never to come back. You have this relic now, that is a podcast limited series of what this language means to this guy and why he captured it in a podcast. That is technically a long tail show. That got its own set of executive producers out of LA who shepherd the NextUp program. So it’s a bit of an answer, but hopefully it gives you a sense of how it’s never mutually exclusive for us. It’s not like, “I spent 95 percent of our time on Will Ferrell. Okay, I guess we have some calls to make at the end of the day to the long tail.” It is usually one continuum or even the same slate.

Do you think that you’re moving the high-margin dollars into the longer tail? It’s probably cheaper to buy those shows, it might be cheaper to produce those shows. Are you doing that math?

No, not really. If anything, we have doubled down on this model of partnering with a creator, like a Shonda Rhimes, who wants a big playground that’s long-term. Who wants to be able to try stuff a lot, make a few mistakes, get it righter and righter, and then hit something big — or two or three things. Standing back and watching how her and the Shondaland audio team work, it seems they want to use this medium to do two things so far. One is really good companion content to a lot of the shows they’re making for Netflix. That feels obvious to me. It’s good content. And the other is really edgy, innovative audio drama. What is the audio drama today? 

I think the value of that creative playground to a creator, that is really free and really permissive, cannot be underestimated. I just don’t think they get that in a lot of places anymore because of the highly formatted other platforms that they’re making content for. We’ve won in that sense in podcasting.

You get to market all these shows with your massive terrestrial network and your now massive podcast network. Everyone else in this room is like, “We have to make TikToks because that is the future of all podcast marketing.” Sorry, I’m making TikToks. Go follow Decoder on TikTok, it’s great. Are you open to video? Is this a thing you want to do?

I’m open to video. We make TikToks too, by the way.

Go follow Conal on TikTok, it’s great. What’s your best TikTok meme?

On iHeart Media. We are interested in video. I’ll go from the more obvious down to the less obvious. I’m very interested in the derivative work potential of podcasts. We all are. It makes sense to me.

Is that part of your business affairs team, just selling the IP out?

A little bit. I don’t have it candidly on a P&L anywhere. I don’t depend on it. I don’t predict what we might get. Hollywood is a difficult, complicated industry, it’s nothing new to say that. So I don’t depend on it, but we have seen some traction there across 10, 12 shows getting optioned and it’s meaningful, with huge partners in Hollywood. It has been fun, if nothing else. 

What worries me a little bit is that we have this tendency on the internet, and since I’ve been working in digital media overall, to have this belief sometimes — that I think is false — that everything really needs to be a video when it grows up. “That’s a really cool medium — if only it were video.” Podcasting is not video. It’s an audio medium. While some podcasts will make amazing video channels, YouTube channels, Facebook video series, and amazing Netflix series, I worry that it feels like the requirement to sit at the adult table. 

I really just keep going back to this notion that it’s perfect the way it is. You have a mass-reach medium. Do you know how hard it is to make a mass-reach medium, that 80 million Americans a week are like, “I’m going to do that today”? They do it like an hour a day. It’s not like a low-engagement medium. That’s my only fear with video. 

We have shows with video, like Stuff They Don’t Want You to Know, and it’s awesome. You should subscribe to it. It’s three guys who are hilarious and fantastic. I just get a little bit defensive or protective about the other 3,000 shows. I’m like, “They don’t need to be if they don’t want to be. They’re just audio podcasts and that’s awesome.” That’s probably how I think about it.

I want to wrap up with the Decoder question. I ask it of everybody. I feel like you have a very strong conviction, so I feel like I might know how you’re going to answer this, but I do ask everybody this. You have to make a lot of decisions. You’ve had a lot of different kinds of careers; you’ve had to make structure decisions, you have to make video decisions. What is your framework for making decisions? How do you do it?

Humans have a predilection for overcomplicating things. They’ll do it for usually one of two reasons. They want to do a really good job. They have this instinct to do good work, so they will try to over-perform and overcomplicate a task. Or, the negative reason, they’re covering up bad work. They’ll overcomplicate in order to camouflage something they probably shouldn’t have done. We will avoid, at almost every turn, simplicity. Just simplicity. Be as simple as you can in your answers, in your approaches, in your strategies. Everything, I promise you, is simpler than you think. 

The second reason is parallel pathing. We tend to think and work sequentially. It’s that whole waterfall versus agile thing.

That is some real Silicon Valley stuff. That’s good.

Throwback. On the iHeart radio app.

Oh my God, do you have an Agile scrum podcast? You should start one.

We tend to think we have to do things sequentially. Everything will get better, faster, and easier if you parallel-path projects. 

The last thing I’d say is more of a human thing. Most of people acting strangely, politicking at work, or behaving badly is born out of insecurity. It’s not that they’re bad people. They’re just insecure. If you have that framework when you walk into every meeting — every creator meeting, every partner meeting, every competitor meeting — it changes your whole outlook. 

I have not mastered this, by the way. A friend told it to me a year or two ago. I didn’t know it until then, but once he said it I was like, “Oh my God. That’s right.” All of us do this, including myself. If there are principles that I try to remember once a week or so, it’s probably those three.

Well, Conal, thank you so much for being on stage, and thank you for answering questions about your org chart.

Thank you.

Thanks to all of you for coming to the HotPod Summit. Thanks to Ariel who did an amazing job. Our partners at Work x Work. I think that’s it. Go make good decisions and follow Decoder on TikTok.