Proactive Investors - Everyone likes a good podcast right?
From wine mums’ insatiable appetite for true crime to football lads hanging onto every word Crouchie has to say, episodic audio streaming has taken over the cultural world since the mid-2010s boom.
So why has podcast distribution platform Audioboom Group PLC (LON:BOOMA) consistently underperformed on the AIM market?
The London-based group’s share price has plummeted over 90% from its all-time high in April of last year, with this Friday’s disappointing trading update sending the stock over 25% lower in a single day.
Despite setting a new record of 135mln global monthly downloads this May, Audioboom has had to downgrade its revenue and adjusted EBITDA forecasts for the current financial year.
Per the update, the group said it “has adjusted the approach taken to calculating its minimum guarantee offers for podcast partners”.
Or in plainer terms: Audioboom will start paying podcasters less.
This mismatch between surging listenership numbers and lack of profitability underscores the biggest problem in the podcast industry: No one has quite figured out how to make any money, aside from an exclusive few (*cough* Joe Rogan’s US$200mln deal with Spotify *cough*).
Furthermore, the UK has not quite jumped on the podcast bandwagon to the extent of the US or Asia. Compared to 22% in the US and a cracking 58% in South Korea, only 12.5% of Brits listens to podcasts on a weekly basis (as of 2020 anyway).
A lack of advertising revenue appears to be Audioboom’s biggest problem.
While the group says it is in a prime position to take advantage when the advertising markets improve, for now, shareholders are looking at a fairly bearish share price.