A year ago, podcast producer Audioboom was facing an uncertain future as management sought, ultimately unsuccessfully, to find a buyer to inject cash to expand the business. When the company gives its latest financial update this week, it will be telling a very different story: in the past 12 months its market value has more than tripled and a maiden profit is looming as Audioboom joins the ranks of the pandemic winners.
Digital entertainment services from Netflix to Spotify have been supercharged by lockdown viewing and listening, and Audioboom has been no exception. It now draws 25 million listeners a month with content from partners ranging from Formula One to the former Bake Off presenter Sue Perkins.
Audioboom, which counts Nick Candy’s investment firm as its biggest shareholder, saw revenues hit a record $26.8m last year, and losses almost halve to $1.7m. This has been fuelled by an advertiser boom creating a surge in the amount of money the firm now makes from the 85 million times its podcasts are downloaded and listened to each month.
The momentum shows no signs of slowing, with Stuart Last, the chief executive, already hailing 2021 as a “breakthrough year”, and analysts forecasting the 12-year-old business will make its first profit since it listed in London in 2014.
The drop-off in advertising demand traditionally seen in the first quarter has failed to materialise this year, as continuing coronavirus restrictions leave millions of people with limited entertainment options. The business has already hit 80% of its forecast advertising revenue, and its first-quarter update, on 14 April, is likely to bring investors even more joy.
Shares have surged more than 250% over the past year, giving Audioboom a market value of £95m – a minnow-esque figure compared with global rivals, but one which house broker Allenby Capital believes indicates that the company is still significantly undervalued. Last October, Audioboom sold a stake to a new Singaporean investor, raising £3m to invest in its own original content as it spied the risk of being outbid by deep-pocketed rivals when podcast partner deals come up for renewal. Earlier this month it launched Dark Air, a comedy series written by and starring Rainn Wilson from the US version of The Office, and extended its official podcast partner deal with Formula One to 2023.
Spotify has spent hundreds of millions of dollars on podcast companies and top talent, including deals with the Obamas and Harry and Meghan’s production company, in the battle for crown-jewel content and scale.
It said its strategy of diversifying away from music was paying off: podcast listening hours doubled in the final quarter last year, and this had been a significant factor in its 27% year-on-year increase in users, the company reported.
Last December, Amazon acquired Wondery, the network behind podcasts including Dirty John and Dr. Death, as it, too, adds audio content to its Amazon Music service.
Audioboom’s revenues are growing at almost twice the rate of the US podcasting ad market – the world’s biggest, at an estimated $1bn – and the recent buying spree has left few large-scale, independent contenders in the market. Audioboom’s investors will be hoping its growth story might soon be enough to get on the buy list of one the global players.
