iHeartMedia Inc (IHRT) 2021 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the iHeartMedia Q4 2021 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions)

I'd now like to turn the conference over to Mike McGuinness, Head of Investor Relations. Please go ahead, sir.

Good morning, everyone, and thank you for taking the time to join us on our Fourth Quarter 2021 Earnings Call. Joining me for today's discussion are Bob Pittman, our Chairman and CEO; and Rich Bressler, our President, COO and CFO. At the conclusion of our prepared remarks, management will take your questions.

Please note that in addition to our press release, we have an investor presentation that you can use to follow along with our remarks. Before we begin, let me quickly cover the safe harbor statements on Slide 2.

During this call, we will make forward-looking statements, including the current and expected impact of COVID-19 on the company's liquidity, financial position and results of operations.

These estimates are based on the current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ from these expectations and assumptions, and these risks and uncertainties are discussed in more detail in our filings with the SEC. During this call, we will refer to certain non-GAAP financial measures. Reconciliations between our GAAP and non-GAAP financial measures can be found in our earnings release or in the investor presentation available on our website.

And now, I'll turn the call over to Bob.

Thanks, Mike, and good morning, everybody. Thank you for joining our fourth quarter 2021 earnings conference call. We're delighted to report another strong quarter and wrap-up a very strong year, which we see as evidence of the progress we've made in the continuing digital transformation of the company.

In 2021, we achieved a number of important milestones, both financial and operational that reflect the success of our company's transformation into a data-led digital business with important new platforms like podcasting, all built upon the flywheel effect of the scale and unparalleled reach of our broadcast radio assets and the only unified ad tech stack in audio advertising.

We believe we're poised for continued success in 2022 and beyond and that our Q4 and full year 2021 performance is strong evidence of that momentum. Before Rich takes you through the detailed results of the fourth quarter, I want to touch on a couple of key points.

First, our revenues continued their strong performance in the fourth quarter while driving margin expansion in both of our 2 key segments. Our fourth quarter consolidated revenue grew 14% compared to prior year. You may recall that our guidance was an increase of 10% versus prior year.

Excluding Political, Q4 revenue increased 25% versus prior year. Importantly, for the first time since the beginning of the pandemic, our quarterly consolidated revenues exceeded their pre-pandemic comps, with Q4 2021 revenues up 3.5% when compared to Q4 2019.

We generated adjusted EBITDA of $294 million for the quarter, an increase of 11% versus prior year while generating $52 million of free cash flow. For our segments, in Q4 2021, our Multiplatform group adjusted EBITDA margins were 34% and our Digital Audio Group adjusted EBITDA margins were 36%, both of which represent year-over-year margin expansion.

Second, we continued to deliver industry-leading growth in our digital audio group and the momentum continues. The digital audio group grew Q4 revenues by 59% versus prior year. And within that group, podcast revenue was up 130% versus prior year, and digital ex-podcast revenue was up 36% versus prior year.

To put those results in context, according to Magna, in Q4 2021, we significantly outperformed the podcasting industry growth of 30% and the digital ex-podcasting industry growth of 20%, continuing our trend of outperformance compared to the industry.

In Q4 2021, digital revenues represented 26% of total company revenues compared to Q1 2019 when they represented under 10%. And in Q4 2021, podcasting revenues alone represented almost 10% of total company revenues, clear evidence of our digital transformation.

And in January, according to Podtrac, iHeartMedia was again the #1 Podcast Publisher in the U.S. now with more downloads than the next 4 largest publishers combined. Finally, the Multiplatform group, which includes our broadcast radio, networks and events businesses, continues to demonstrate that it is also a growth engine for the company in both revenue and earnings.

Q4 revenues grew by 9% versus prior year, and when excluding the impact of political, Q4 revenues increased 17% versus prior year.

We're confident that we will reach our 2019 Multiplatform group revenue levels and continue our growth past that point, and here's why. We believe certain key advertising categories will continue the recovery to pre-pandemic levels, like auto, entertainment and retail and others like pharma continue their strong growth.

And there are also new ad categories and customers that are continually added to the mix, like cryptocurrency players and sports betting. We'll also continue to take share from competitors in the radio advertising space.

According to Miller Kaplan, we continue to outpace our broadcast competitors and expect to continue to take share there. Looking more broadly across the media landscape, we believe the TV TAM represents an important growth opportunity for us as well. Ad-supported TV reach continues to decline, down to 54% reach for the largest broadcast TV network and just 32% reach for the largest cable network compared to iHeartRadio's broadcast radio audience, which reaches 90% of Americans every month.

Broadcast radio in general and iHeartMedia specifically is the most efficient and effective way for an advertiser to provide the missing reach in any TV-centric advertising campaign. We've also developed the capabilities for our broadcast radio assets to participate in the $160 billion digital TAM through the utilization of data-infused solutions, including our SmartAudio product.

Finally, within our Multiplatform group, we expect our events business to not only recover to pre-pandemic levels, but to grow from there, given the pent-up consumer demand for live events and experiences and our ability to build new live and virtual events.

These financial results we're reporting today are a reflection of the continued successful execution of our strategy and the momentum of both our Multiplatform and digital audio groups.

As recent studies have shown, consumers now spend more time with audio than they do with linear TV. And the advertisers are following that trend with an increased allocation to audio advertising.

We believe that our consumer reach as the #1 audio company in America with a leading position in broadcast radio, podcast publishing and digital radio, supported by an unmatched sales force and ad tech capabilities, set us up to benefit from those trends in a way no other company is capable of.

And we will continue to build new platforms for our brands and creators to serve consumers and advertisers using our unique assets to build a strong position in Web3, the Metaverse, NFTs and Tokens as the market opportunity develops.

And now, Rich will take you through more details of our earnings and a look ahead into Q1.

Thanks, Bob, and good morning, everyone. As I take you through our results, you'll see the consistency and stability of our financial performances. And we believe we have the assets to maintain that predictable growth going forward.

Turning to Slide 13 of our investor deck. Our consolidated revenues were up 14% year-over-year; exceeding our guidance for the quarter of up 10% year-over-year. We are also pleased with our continued sequential revenue improvement against 2019, highlighted by our revenue in Q4, which was up 3.5% compared to 2019.

Our direct operating expenses increased 17% for the quarter, driven primarily by the significant increase in revenue, which drives higher content and profit-sharing expenses, third-party digital costs and expenses related to the return of local and national live events.

Our SG&A expenses increased 10% for the quarter, driven by increased employee compensation expenses resulting primarily from higher variable bonus expense based on strong financial performance and higher sales commissions due to high revenue.

As a reminder, in 2020, the vast majority of our employees did not get paid a bonus. And as a result, you'll see our corporate expenses increase year-over-year. In addition, increased headcount from the investments in our fast-growing digital businesses contributed to the increases in SG&A.

Increase in both direct operating expenses and SG&A expenses were partially offset by decreases in employee compensation and other expenses resulting from the modernization initiatives and cost reduction initiatives taken in response to the COVID-19 pandemic.

Our fourth quarter GAAP operating income was $123 million compared to an operating income of $112.8 million in the prior year quarter, and our fourth quarter adjusted EBITDA was $294.2 million compared to $265.5 million in the prior year quarter.

If you turn back to Slide 4, I'll provide additional color on the performance of our operating segments. And as a note, there are additional slides in the investor presentation on our segment revenue performance.

Digital Audio group revenues were up 59% year-over-year and adjusted EBITDA was up 65% year-over-year. Within the digital audio group is our podcasting business, whose revenues grew 130% year-over-year and our non-podcasting digital revenues, which grew 36% year-over-year.

We continue to expand our digital audio group margins. In the fourth quarter, they were 36%, a 140 basis point improvement year-over-year. Multiplatform Group revenues were up 9% year-over-year, continuing our sequential improvement compared to 2019, and adjusted EBITDA was up 20% year-over-year.

Multiplatform Group adjusted EBITDA margins also continued their improvement. Q4 2021 margins were 34%, up 300 basis points compared to Q4 2020 of 31%. The Audio Media Services Group revenue was down 35% on a reported basis.

Excluding the impact of Political, revenues in this segment were up 7% year-over-year.

On Slide 19, there's a summary of our debt. At quarter end, we had approximately $5.4 billion of net debt outstanding, which includes a cash balance of $352 million. We also continued to improve our net debt to adjusted EBITDA leverage. As a reminder, the terms of our debt structure include no material maintenance covenants and there are no material debt maturities prior to 2026.

We are continuing to actively monitor market conditions and will optimize our capital structure as opportunities arise. In the fourth quarter, we generated $52 million of free cash flow. We also successfully executed against our previously announced savings initiatives.

As a reminder, our pre-COVID modernization initiatives achieved $100 million run-rate target as of mid-2021. And we successfully replicated the majority of the previously announced $200 million post-COVID savings as well.

In 2022, we expect significant revenue, adjusted EBITDA and free cash flow growth. And we would like to provide the following specific guidance.

Starting with Q1; our January consolidated revenues were up 18.3% compared to 2021. For the first quarter, we expect revenue to be up approximately 17% to 19% year-over-year. In addition to being a cash taxpayer in 2022, as previously announced, we will continue to have supplemental capital expenditures in order to complete our high ROI real estate consolidation project.

And as a result, we expect our capital expenditures to be between $150 million and $165 million.

And in 2022, we expect to make significant progress towards our previously announced leverage target of approximately 4x.

Bob and I would like to thank our employees without whom this journey would not be possible, the communities we serve and our business partners. We appreciate you joining our fourth quarter earnings call.

And now we'll turn over to the operator to take your questions.

(Operator Instructions) Your first question comes from the line of Steven Cahall with Wells Fargo.

Rich, thanks for that outlook on the leverage targets. I was wondering if you might just be able to unpack maybe the 2 primary components for us. So we've got adjusted EBITDA and free cash flow generation. Would love maybe a little bit of color on how we think about each of those as contributors to deleveraging this year?

And then, on Multiplatform, I was wondering if you could talk a little bit about SmartAudio. You talked about the tech stack that you built. I am curious what percentage of Multiplatform revenue or spots is being done through the SmartAudio?

It's probably a question I'm going to ask every quarter. So I thought I would keep on that theme.

Thanks, Steven. First, let me start on the first one with respect to leverage target. Looking at it, there's 2 pieces as you articulated in terms of driving. Objective is to get to 4x debt-to-EBITDA leverage. I think you can see we've made significant progress even from Q3 to now and throughout the full year.

And I think to put that in context in terms of '21, what we've always said is the value creation for iHeart in terms of driving the equity value that we do drive life equity value by just paying down our debt, I think we'd all agree with that, mechanically. And we've made significant progress. And we intend to make significant progress again towards achieving our goal of 4.0 on leverage ratio.

And I think that's going to come from really two areas. Again, we haven't given full year guidance. But we expect to get significant EBITDA growth for this year. And we expect even with becoming a full cash taxpayer and along the capital expenditure guidance we gave today, we expect to see significant increase in free cash flow. So both of those pieces moving forward.

And then, finally, I would just add one thing to make sure everybody is very clear. When we get to about 4x as a company, Bob, myself and the rest of our Independent Board Members will take a step back. And we'll say okay. We've been returning value to shareholders and equity shareholders due to pay down of debt and a levered capital structure.

And now, we're going to take a step back and say, okay, what's the next step in iHeart's capital structure life in terms of returning equity value to shareholders. So -- and one final piece, I'll add before turning it over to Bob on your second question as a reminder also, we have a $1.450 billion of [8 3/8] that has a soft call in March, I'm sure that may come up -- a soft call in May, I'm sorry. And I'm sure that may come up later as a question. And just rest assured, we're monitoring that situation like with the rest in on our capital structure. But that's another lever we have to pull that will create value for all of our shareholders.

Yes. And I think going to the SmartAudio question, SmartAudio continues, as you might imagine. Although it's a small piece of the total revenue, continues to outpace the revenue growth of the Multiplatform group, again indicating the power there.

And SmartAudio, again, then that suite of services is used not only to generate money directly through the SmartAudio line. But also we're finding increasingly that the data analytics associated with SmartAudio are finding their way into a lot more buys and a lot more discussions with advertisers.

So it remains really an important focal point for us for our future growth, not only in digital, but probably significantly in the Multiplatform group as we make that inventory much more digital like.

And we look forward to your question in Q2 again Steven.

Your next question comes from the line of Stephen Laszczyk with Goldman Sachs.

2 if I could. First, thanks for the commentary on January revenue growth. I was wondering if you could maybe talk a little bit more about advertising trends and activity as it trended across digital Multiplatform in 4Q and into 1Q?

Digital appears to maybe have grown a little bit faster than we expected in 4Q. I'm curious if that's a trend that we could extrapolate or if there's anything unique to 4Q, maybe COVID, that we should consider?

And then, could you talk a little bit more about some of the recent trends you're seeing across your ad verticals, what verticals are over-indexing, what verticals are under-indexing? And which of those do you think are most likely to see improvement over the first half of the year?

Well, let me hit the second part first, and then, I'll let Rich take the first part you have there. I think in terms of what we're seeing with advertisers is we saw some advertisers pull back some during the pandemic, some doubled down during the pandemic.

And so we've sort of seen not necessarily an impact from the way you might have expected looking at headlines and certainly nothing like we saw the first year of the pandemic. So we remain optimistic that the country and advertisers are just beginning to take all of this in stride. And we're not seeing the kind of disruption we've seen in the past.

In terms of across verticals, I think we haven't broken out verticals. But I would remind you that we have no category that's more than 5% of our revenue, no advertiser, single advertiser more than 2% of our revenue. So we have a very diversified revenue base, which allows us, I think as any time you get a shock to the system within reason, we probably see a corresponding benefit somewhere else and tends to mitigate that risk a bit.

Yes. And Stephen, just on the revenue trends. Looking at it, pretty much as we talked about in Q4, I mean, we really haven't seen any slowdowns in the overall revenue trends. And just as a reminder that January tends to be one of our slower months of the year just historically and it's also a little bit the law of small numbers compared to the rest of our numbers, which again, is nothing new historically.

But you see the guidance we gave for Q1 coming out. And quite frankly, I think you tie it into a box without specific categories, but -- and part of the reasons we really don't talk a lot about categories is because as certain categories go down, it's our job to find other categories and bring our offerings to them and find the revenue streams there, so not much to add to that.

Your next question comes from the line of Ben Swinburne with Morgan Stanley.

I wanted to ask about your technology platform following the Triton acquisition and integration. And also, I saw you made an interesting investment in a company called Sounder around brand safety.

And just how you think about the podcasting business really scaling from here beyond host-read ads to more programmatic and radio like ads and how the sort of iHeart audience network compares to other options in the market, obviously companies like SiriusXM and Spotify are building marketplaces as well.

So I am wondering if you could sort of talk about how you see your portfolio versus theirs? And I just had one question on expenses, either for the first quarter or for the year, any help in thinking about expense growth on sort of a fixed cost basis or whether the employee base and compensation levels in Q4 are a good run-rate. Just trying to think about, all the work you've done on the expense base over the years is that now a largely the structural change is largely done and now are looking at more normalized expense trends going forward?

Well, let me hit the podcast question. I'll let Rich hit the expense. I think on podcast, our podcast business is really built at the end of the day on our strength as a publisher; the fact that we publish and control that number of podcasts.

And again, it's sort of interesting trajectory we've had -- it was 18 months or so ago, we were neck and neck with NPR. Today, we are in the last pod track. We had 4 -- we had more downloads than the next 4 podcast publishers combined.

That kind of strength gives us a lot of what we think of strength in building marketplaces. And when you say what makes ours different from others is our marketplace is not just about the technology. It's about we have the product. And now we can fly the technology to it to improve the monetization of it.

You're absolutely right that I think one of the big areas that people have monetized and certainly we have are host-read ads. As you know, we developed technology early on to be able to dynamically insert host-read ads so they're not permanently associated with any one podcast, which allows us to, again, maximize that kind of revenue.

And we made the Triton investment and built out our ad tech stack because it became apparent that there's still going to be a portion of the podcast inventory we're not going to be able to get through traditional sales methods even though we have the largest ad sales group by a lot I think in audio, that we've got the long tail of either old episodes, additional episodes or in many cases, regional or small podcast.

So we've been able using our -- again, the data and analytics suite is to build our audiences and [find] those across the marketplace and again, open the marketplace up to other publishers as well using our footprint of our big published podcast as the fulcrum point.

As a quick follow-up before we get to Rich. Just Bob, do you see that third-party publisher business as a big opportunity? Because that would seem like as podcasting scales, obviously, you can monetize your own IP really well. But there might be a big third-party opportunity as well. I was just curious if you think that's a good business long term for iHeart.

It's an additional business. It doesn't come with the same margins that our published products do. And I think when you see the performance of our podcast business versus others, when we're talking about profitability and the way others talk about it, I think you see the financial implication of that.

So we're very cognizant of that. But yes, I think there are opportunities for us to extend. And by the way also just a big opportunity for us to extend into the podcast inventory that we have not sold.

When we've got a huge podcast we tend to sell it out. But we've got a lot of small podcasts, singles and doubles. We've also got some very big regional podcasts, podcasts from one of our personalities that happens to be big in Detroit, but nowhere else. And we've got an opportunity now to tie all those together and find money.

And then, when we make that sale, we have a much better margin because it's a published podcast versus just a sales rep deal.

Ben, I just want to hit a couple of additional points, and then I'll go right to expenses. And for yourself and obviously, the benefit of everybody on the call because I know people are wildly busy. So we try to continue to put more and more in writing that I think addresses that you could take away.

If you look at the investor deck that we put out today when everybody has a chance, there's a number of slides in the deck that go through and make the points that Bob talked about. So I would invite you to look at those in terms of, quite frankly, the breadth of our podcasting offering and our significant outperformance, not just recently but over a consistent period of time and widening our lead there.

So I would suggest everyone in terms of going through and kind of looking at those numbers, because I think it should give you a lot of confidence in our significant outperformance on the revenue side for podcasting. But you've got to remember, we were up 130% in this quarter on podcasting revenue. I think the industry was up about 30% according to Magna out there. The second thing, I would say, back to your question about Triton, we put in a slide we've had a number of times that we've gotten good feedback on, which highlights the audio text that we've built up over the years.

Again, I think what's important also about all this story, it's a story that Bob and I have been telling for a number of, number of quarters now. We may be beyond the number of quarters. So there's a consistency to the story, there's a consistency to the numbers, there's a consistency to the growth rates and what we're bringing down to the bottom line on margin that we need to continue to share with all of our shareholders because, again, I'm not sure if people have fully appreciated this is not just 1, 2 or 3 or 4 quarters, there's been a consistent story here, and we feel very comfortable with this story going forward.

And finally, I thought Bob mentioned this in his opening remarks. We also put for the first time in a slide, which broadens out your question to kind of all of digital. And, Ben, I think of all people, you'll particularly appreciate this, is that in Q4 of this year, we had 26% of our company revenues with digital and in Q1 of 2019, 6% of our company revenues were digital.

So we have that in there. So as you guys think about doing things and modeling things out, it gives you an anchor to do that. And back to your question on expenses. As we said in the script, yes, we've -- all the expense numbers we put out there, we have hit, they're baked into the numbers.

And we achieved everything in Q4 of this year. You did notice our corporate number was a little bit higher because we had full year bonuses this year, our bonuses this year quite frankly that Bob articulated earlier.

We didn't have any bonuses for the bulk of our team because of Omicron and because of COVID in [2001] and 2020. And what I would say on expenses and you saw where our margins wound up. I think if people are always questioning, gee, when are you going to get back to the mid-30s on margins? And are the -- and we show that in Multiplatform for Q4.

And the question we always get are margins sustainable in digital in the mid-30s, where most of the big digital players have no margins. And again, we're in the mid-30s here again. I think we actually had on margin point improvement over Q4 of last year, which I think people are very pleased with.

And so we're going to continue to focus on how to make our operations more efficient and bring the flow-through down to the bottom line that you saw both in digital and Multiplatform this year. So I do -- long-winded answer but we'll detail expenses. I do think it's a pretty good proxy for run-rate going forward, but that doesn't take away.

We're not always looking for more efficiency. And at the same time, we will continue to invest in our high growing businesses like the ones Bob and I just spoke about, particularly on the digital side.

Your next question comes from the line of Jim Goss with Barrington Research.

A couple of them. First, I was looking at -- I was wondering if you have had any significant variance in ad sales trends by market size since you cover a lot of market sizes and whether you tend to see a lot of variance in terms of political spending, since we'll be getting into that very soon.

It's interesting. We start out by -- unlike broadcast radio companies, we have a national footprint. We're the only one that does. When you look at our broadcast radio alone, we have a 90% reach of the country of consumers, not overlap, but that's actually consumer reach in a month.

And so, what that allows us to do is to be able to talk to advertisers about a national footprint with local execution. So as opposed to thinking about each market as independent business units, we think about the markets as local execution for advertisers. And it varies advertiser to advertiser as to which markets they want, whether they want all markets.

And we're able also to put that together with digital podcast audiences et cetera. And now with our SmartAudio suite of services, we're able to actually find audiences that go through all of them.

And we've talked about in our tech stack with the addition of the Triton acquisition, we now have the only unified electronic ad tech platform. And as a result, we now can find an audience and seamlessly go across everything from podcasting, digital audio to broadcast radio. And I think that puts us in a unique position.

And the earlier question about our platform and how does that help us? I think probably one of the most significant ways it helps us is we're -- we've got this huge reach. We've got these big audiences across all of our product lines and all of our platforms.

It allows us to stitch it all together. And for an advertiser, there's an advantage to someone who is able to seamlessly find those people wherever they are. And I think that's a big advantage for us.

Are you saying then that -- your national platform with a lot of market sizes tends to blur the distinction in trends that might -- others might experience whether in small or medium or larger markets because of...

Yes, that's a really good point. I think, yes is the answer. And I think you begin -- in the old days, people in radio would talk about local advertising and national advertising.

We've talked about it on the calls before that we have a strategy of any seller anywhere can sell anything. We've built out the training for that and we've built out the electronic platforms to enable them to do it and to track it. And so, what that allows us to do is blur the line.

We've got a local seller in Jackson, Mississippi can sell a national ad campaign if they want to. And -- or they sell 4 markets or 3 markets. It almost doesn't matter where it's coming from. That has been -- now so even internally, we say, what's national, what's local, it gets very blurry.

And I think, again, we've taken focus much more of what's the -- who's the advertiser, what are they trying to accomplish? And what's the best way to accomplish that using our assets? And we have so many platforms now, as you point out, so many markets. I mean no one's got a reach like we do.

It really puts us in a unique position. And finally, when you compare the reach, there are really 3 what I would call Tier 1 reach vehicles in America. It's us, Google and Facebook, reaching about 90% of America. It's a pretty substantial falloff from there. And when you look at other audio players, broadcast radio at sort of half our size.

When you get to digital, it's even lower than that, when you look at a pure play like a Spotify or a Pandora. So it really puts us in a unique position. And I think we've built out both the company capabilities and our strategy based on that unique capability.

Jim, it's Rich. I might just add one more thing to what Bob just said. And I'll go back to something I just said before with Ben's question, I think the other important point is at the end of the day, we're responsible for delivering, Bob and myself, the rest of the management team, the #1 priority is to create value for our shareholders.

And so we've been building out these capabilities we have whether it's between the Multiplatform. And the reason why Bob mentioned and I pointed out the audio tech stack, which is highlighted, I think the reason we talked about in our investor deck, I think the reason why it's important that we mention for context what digital was part of the overall company's revenue in Q1 and what it is today.

We get all that as context to say, okay, we identified investing in digital. We identified podcasting, following the consumer, following the advertisers. And then, I think we've just consistently put some pretty significant increases on the board and expect to continue to do that going forward.

Again, we didn't give specific guidance. But we did say if you look back to what we said in the earnings remarks a few minutes ago, substantial growth in revenue, substantial growth in EBITDA, substantial growth in free cash flow, substantial improvement to getting to 4x, which, by the way, the leverage ratio is a data point for what I said earlier.

But all the pieces that I talked about, how do you get to the revenue, good expense management generation and free cash flow manifests itself into that accelerated rate of getting to 4x.

And like I said, one of the reasons you'll never hear us talk about different categories or individual advertisers or by the way, big and small markets, because the company is called iHeart. At the end of the day, there's only one stock that's there, which is the iHeart stock, so great question out there. But I just want to make sure we kind of bring it all back with the one focus and mission we have is to create equity value here through all these pieces that we're talking about.

Okay. And a couple more quick -- one quick one. Networks and broadcast radio tend to track one another pretty well. Networks lagged a little this quarter relative to the radio group. And you might say why that might have been the case.

And secondly, you mentioned more time spent with audio than with linear TV, which I think you've said a number of times in the past. When you talk about linear TV, does that partly reflect just the shift to streaming and how would it compare to all TV viewing?

And then, the other issue with radio has been time spent listening, which tends to lag by quite a bit. And maybe you can talk about the trend there too.

Sure. Look, on our broadcast radio, let me start with that, we get about 30 minutes a day of listening that's more than social. That's more than -- that's more than search. So it is quite significant. And I think from a macro picture, this company, we don't really have an audience issue.

What we have is monetization issue, and that's really where we focused our resources. There are many -- like the TV business, if I were there, I'd be worried about what am I going to do with this lost audience? TV usage has not probably gone down much, but it switched to non-ad-supported viewership.

People are watching the streaming services and subscription, basically all drama, comedy, scripted stuff has moved over there, leaving mostly reality and sports on ad-supported TV. And I think as we look at our unique position, I think we see opportunities that others don't.

Going to your point about networks, we are -- in the Q4, Premier Network was down just a little bit, but our total traffic in network was up. So we see some were up, some were down. I don't think we think networks tracks exactly our broadcast radio, because we sell it a different way. And it's going for a different audience and has different characteristics to it.

Your next question comes from the line of Dan Day with B. Riley Securities.

Once again great job on the podcast side in the quarter. I just -- I think all eyes are going to be on sort of the growth rate. It's going to be hard to continue to grow at a 100% plus quarter-over-quarter or year-over-year rather.

So I guess just if you had to isolate maybe 1 or 2 factors between CPMs, rising ad fill rates, more creators choosing to join the network, something else, maybe, I guess, which of those do you think is going to be most important here in driving the incremental podcast growth in '22 and beyond?

And then, if you could just give us anything to try to frame up what that growth rate might look like, I'd appreciate it.

Sure. Sure. I think, look, at the end of the day, we've got a flywheel effect going with being the #1 podcast publisher. And when you get this kind of lead in terms of the world, if you've got a great podcast idea, you probably come to the leader first to see if they can do a deal.

And we probably do almost any deal that makes sense based on content or economics. And if we don't do the deal, it's probably because the economics don't work and we're delighted for it to go somewhere else.

And by the way, if the economics don't work for us as the #1 podcast publisher, they're certainly not working for anyone else. And we don't want to get in the business ever of that slippery slope of profitless prosperity. We're not willing to do it. Margins are important to us and profitability is important to us.

So we continue to start there. And I think in terms of profitability and how we keep it going, one, is we increase the number of podcasts we do; two, we improve the performance of our biggest podcast. I mean, if you look at how many of our podcasts have 1 million-plus downloads, you see that growth trend as well. Three, we're experimenting with different kinds of ad products, that can go into the podcast. You're exactly right.

I think the podcast industry as a whole is adding more inventory. It's very, very low compared to what we see in radio. There is -- of course, the long tail, which we get at 2 ways. We get at it through having any seller anywhere selling anything, including podcasts now, which gives us, by far, the biggest sales force selling podcasting.

But we also, as we talked earlier, the tech stack and the investments we've made in terms of being able to get at that long-tail inventory begin to sell audiences in addition to titles becomes very important.

We have huge titles, whether it's from the NFL or Will Ferrell or Shonda Rhimes, or the biggest now Black Network, a product with a black effect with Charlamagne tha God as our partner there that we've got so much we can do, but we've also got audiences.

So when we're looking for specific audiences, we can find them now in podcasting. We can also link them to digital audiences, digital audio audiences and link them to broadcast audience as well, providing a scale on top of the podcasting.

So I think all of those things contribute to the growth and it's interesting. The podcast usage just continues to increase in America. It has surpassed the reach of the big streaming music services like a Spotify or Pandora and continues to grow.

So we -- the question is, will it one day have the same kind of reach as broadcast radio? I don't know. But I certainly think it's got that kind of engagement and got that kind of popularity. So we are both fueling it and benefiting from it.

What I might just add to that, just a couple of points. One, you talked about in terms of the growth in the numbers. Just to remind everybody, yes, we were up 130% in Q3 -- I'm sorry, in Q4. And I think Q4 is a critical indication, I think whether it's our company or anybody else, you should look at Q4 to give you confidence as you go into 2022.

So it's not even like we just changed the page and it's a different date out there. But just to remind you, we were [actually able to] scale up 148% for the year on podcasting. So it wasn't just the 130% for 1 quarter. It is -- I'm going to keep using this word again and again and again. It is a consistency and predictability to our revenue growth and bringing things down to the bottom line that would be great that investors continue to focus on.

The second thing I would say, Bob highlighted in terms of, yes, you can drive all the podcasting revenue in the world. But if you don't have the sales force and the efficiency to bring it down to the bottom line, and again, if you look at our margins and look at our conversion ratios for both digital and Multiplatform, I think you'll see that we've said this is a great business in terms of generating value on incremental advertising revenue dollars and we've demonstrated that again.

And just the last piece I'd add much in terms of the pool of money that's out there. If you look out 4, 5 years and you look at whether it's Price Waterhouse or Magna or eMarketer, because there's so many people doing projections. And I'm not saying take any one projection because we don't take any one projection. But they pretty much coalesce around the $3 billion, $4 billion, $5 billion podcasting pool of revenue, which I think is up from about north of $1 billion again, U.S. advertising dollar podcasting revenue from '21.

So whichever number you believe or whatever you think that pool of money gets there, it is -- I think we can all agree, it's very significant growth going forward.

And let me add one more thing, because we didn't highlight it in the call, but I think it's worth noting is we're increasing our share of the podcast revenue pie. In addition to the pie growing, the second vector for us is increasing our share of it.

And that outperformance based on the Magna number gives you a pretty clear indication of how we're doing that. So although we haven't given guidance for podcast revenue going forward, we have said we intend and we expect to continue to increase our share of it. So we do get that flywheel going as well.

And finally, in terms of some comfort about the growth of podcast revenue is look at the engagement numbers. Almost anyone you want to look at, whether listening to the whole thing, how long they spend, how many episodes they're now listening to is clearly that's an engagement that the advertiser is very interested in because messages get heard and the impact is great.

And indeed when people are measuring the impact of advertising through podcasts, it's pretty dramatic too. So I think all of those things give us confidence that this is a great growth area for us, both in terms of the marketplace for podcasting growing and also our vector for growth in it, both in terms of product and in terms of monetization.

With that, we'd like to like to thank everyone for their support, for taking the time today to listen to the iHeart story. Bob, myself, Mike McGuinness and the team are available for follow-up questions. And we're always here and again, thanks for your time and support.

Thank you for participating in today's conference call. You may now disconnect your lines at this time.