Audio's old guard looks to consolidate
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SiriusXM is in talks to acquire iHeartMedia, a deal that would combine America's largest radio provider and its biggest terrestrial radio station owner.
Why it matters: Audio is having a moment. But the businesses of some traditional players have been under strain, limiting their ability to invest in digital as Big Tech giants like Spotify and YouTube surge.
- Spotify spent $1 billion building up its podcast business. YouTube has ranked as the most preferred platform for listening to podcasts, per Edison Research.
The latest: "I don't address a rumor, period. But what I'll say is the intensity around audio is as high as it's ever been," Lizzie Collins, SVP and head of B2B marketing and ad innovation at SiriusXM, told Axios onstage at Possible on Tuesday.
- At Possible, Collins described a clear shift. Last year, most ad tech vendors she met were focused on TV and video. This year, many are "trying desperately to help figure out audio" due to the "untapped potential" as audience growth outpaces advertiser demand.
- "The overall attention that audio is getting is phenomenal," added Lisa Coffey, chief business officer for iHeartMedia. "AI is playing a big part of that. ... The trust of your podcast host, your radio host, is really what's rising to the top."
Yes, but: Audio's full potential won't be realized until "all of broadcast" is fully integrated into the digital ecosystem, Coffey said.
Between the lines: Audio's major challenge has been infrastructure. Inventory is fragmented and the complexity of ad buying and creation has slowed digital ad growth.
- While the TV industry has quickly embraced streaming advertising, audio has been slower to migrate from traditional to digital.
- The digital audio market reached $8.4 billion last year with podcast advertising reaching $2.9 billion, per the Interactive Advertising Bureau. The global radio advertising market today hovers around $28 billion, per ResearchAndMarkets.
Zoom in: The merger talks come after years of financial restructuring and cuts across the audio industry.
- iHeart filed for bankruptcy protection in 2018. It went public again in 2019 after spinning off its outdoor advertising business.
- Audacy filed for Chapter 11 in 2024 and emerged as a private company.
- SiriusXM completed a debt refinancing last month.
- CBS News Radio shut down last month.
The big picture: Traditional audio players face steep competition from digital-native companies with healthier balance sheets.
- But their audio expertise coupled with the scale of their radio footprints make them attractive to creators.
- Alex Cooper's deal with SiriusXM includes exclusive channels like "Unwell on Air" and "Unwell Music," bringing creator content to satellite radio.
- Speaking at Media Trends Live on whether he was going to renew his deal with iHeart, Charlamagne tha God said, "Nobody does audio better than iHeart."
