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Pandemic Watch: April 21, 2020

It’s April 21, 2020. Time has been fuzzy lately, so I’m sticking to Stitcher’s accounting of the pandemic timeline, which marks the March 2-8 stretch as “Week 1” to signify the last “normal” week before the initial implementation of COVID-19 social distancing measures. By that measure, we’re now in Week 8, or seven weeks into the major rearrangement of everyday life.

So far, we’ve spent these Pandemic Watch columns tightly focused on audience numbers, trying to assess how listening has changed since the near-disappearance of the daily commute and the widespread grounding of most Americans in their homes. To recap: listening dipped in the aggregate but has since flattened out for the moment, bigger publishers seem to be doing better than smaller publishers, and the primary listening window appears to have shifted to later in the day.

Let’s now shift our attention to the revenue side, particularly on advertising, which remains the primary engine for the business. I haven’t seen anything that provides a clear sense of the big picture just yet, but a Digiday report from last Tuesday suggested podcast ad revenue has continued to grow despite the broader economic disruptions. Citing sources at Stitcher, Megaphone, and Entercom, the piece turns on the notion that brand advertisers are continuing to buy podcast advertising even as direct response advertisers, long the foundational constituency in the podcast advertising pool, have been pulling back on their own spends.

While just a shard, Digiday’s report is an interesting place to start as far as piecing together the full picture is concerned. The big question moving forward is just how much the advertising mix is going to change, and the extent to which the overall podcast advertising spend will ultimately respond to the on-going changes in listening trends. I imagine there will be some substantial fluctuations on both counts, as different parts of the economy grapple with different aspects of these considerably complex pandemic conditions.

Another question worth tracking: how will those advertising dollars be distributed across publisher types? Given the pronounced uncertainty, it’s understandable to be concerned that this may be a situation where smaller and independent operations end up seeing fewer ad dollars flowing their way over the length of this crisis, as the spending environment shakes out to be more conservative even if actual spending levels stay steady.

Should that be the case, we’ll likely come out on the other side with far fewer smaller and independent publishers in the ecosystem, leaving us with a scenario where value, power, and opportunities in this business become largely centralized within a smaller group of bigger institutional players. This has been a prominent anxiety within the community for several years now, but as it’s been said elsewhere about other contexts, crises tend to accelerate certain dynamics already in play. This is almost certainly one such dynamic, and I feel compelled to say: an environment where the bulk of value, power, and opportunities are centralized within a handful of bigger organizational bundles hasn’t traditionally turned out to be beneficial for creative and media workers as a class.

Speaking of bigger organizational bundles, last week saw several such entities, many of which operate significant audio operations, begin to either signal or execute cost-cutting measures to weather the stormy financial waters.

Early last week, iHeartMedia indicated that it is looking to cut $250 million in costs, an effort that will include executive pay cuts and the furloughing of staff they consider to be “non-essential at this time.” The Hollywood Reporter’s report on the matter highlights that the organization is facing drops in traditional radio station advertising revenues, and that they are hoping to offset those losses with podcasting and digital revenues. (Meanwhile, interestingly enough, Deadline notes that the company is also estimating a $100 million cash tax saving from the CARES act.)

Also early last week, EW Scripps, which owns Stitcher and Triton Digital, announced through an internal memo that the company’s senior leadership and board of directors are cutting their salaries and fees, with the equivalent value of those cuts being donated to a relief fund they have set up to help employees requiring basic needs assistance.

On Friday, Vox Media officially furloughed 9% of its staff from May 1 through July 31. According to The Daily Beast, many of those cuts hit the SB Nation and Curbed brands, and the company also implemented a few other cost-cutting measures, including reducing hours for some non-furloughed workers and pay cuts for higher-earning employees as well as executives.

Major public radio organizations have been tightening their belts as well. On Friday, Current reported that NPR and APM are planning to make spending cuts in anticipation of major budget hits as business closures throughout the country have resulted in significant drops in underwriting and sponsorships. Executive pay has been reduced, and NPR chief executive John Lansing was quoted as saying that the organization’s goal is to lower costs without eliminating jobs and that cutting positions is currently “not on the table,” but that there are no guarantees. Both organizations had started out the year with strong projections, and are currently seeing strong audience numbers amidst the crisis.

These are but a few examples. If you’d like a more robust (and wildly depressing) accounting of cuts and closures hitting the broader industry, Poynter’s Kristen Hare has been keeping an actively updated list here.

Before we move on, here’s a link to the coronavirus update post from the folks at Podtrac. The three big things that stood out to me: the listening dip within Podtrac’s sample continues to look like it’s leveling off for now; in a fascinating turn, the fiction genre is bouncing back; and take a gander at the “US Hourly Downloads by Week” section, which noted an interesting bump during peak hours on Sunday.