How Spoken Word Streaming Site Audioboom Has Turned Its Business Around

Feb. 25, 2015 - PRLog -- Podcast comedy shows boast of an enormous, not to mention loyal, following. These shows are pivotal in making podcasts a popular medium for broadcasters, thanks to early adopters such as British comics Ricky Gervais and Stephen Fry, who have chosen the medium as an avenue for their works.

The space has been crowded since, but that hasn’t stopped newcomers and established ones from joining the fray. The podcast has become the medium of choice for comedians to resurrect their ailing careers, and to drive audiences at live shows.

It is the promise of the podcasting medium that in turn has helped little-known streaming sites like Audioboom to widen its exposure. From being just a small, audio sharing platform back in 2009, Audioboom has grown to tap big-name companies by the likes of the BBC, CBS, talkSPORT and SkySports, plus engage audiences in Australia, India, South Africa, North America and Latin America from its humble headquarters in London. These premium content creators produce audio shows, which are all hosted on Audioboom’s platform for syndication.

The company’s shift from being a free, user-generated content sharing platform faced mixed sentiments from its earlier community of broadcasters. There’s a huge upside potential in the spoken word market, and Audioboom, obviously, is not one to be left behind. According to The Financial Times, the company has to undergo the transformation, “in order to develop a sustainable business model.” This coincided with Chief Executive Rob Proctor’s entrance in the company.

Not long after Proctor joined the company, Audioboom listed on the London Stock Exchange’s AIM platform for smaller growth companies. Its valuation then of £6 million has ballooned to £53.51 million, while its number of content partners—now standing at 2,000—has increased by 675 percent in 2014 from the previous year. RTT News noted that the firm has also grown its user base by 64 percent in 2014 to 3.14 million.

It was indeed a giant leap for the audio platform, although The Financial Times noted that it has yet to make significant revenues. But Proctor, and COO Amanda Brown, were optimistic on what the future has in store for the emergent company.

In an interview with TipTV in August 2014, Brown noted that the release of its improved and rebranded app, as well as the addition of new content partners from Australia (“our overnight success”), would bring in more “audiences, listens, and shares” to the platform. Proctor also emphasized the importance of Audioboom’s new app, noting that with 80 percent of people listening to audio while “on the move,” it certainly helps that the company designed its app with that in mind.

“It's an evolution of listening to audio that's being driven by the user. Up until this point, most traditional media is all about pushing content to users to take what's coming through. The users now, especially through mobile and through apps, are used to pulling the content they want and curating their own experience,” Proctor said.

Aside from these, the company is banking on signing up more content partners and rolling out its ad monetization platform, which AdLarge is representing in the United States, and Global Radio is representing in the United Kingdom.

Positioning itself as a social media company also allows Audioboom to set itself apart from other streaming services—a fact that Arden Partners, the company’s stockbroker, believes is a competitive advantage for the company. The peer valuation of social media giants is estimated at around $100 per user, which translates to a “considerable upside” for Audioboom’s $7 per user, based on Arden’s estimates for 2016 registered user base.

Audioboom’s business model and host of offerings also puts it in a unique position compared with its social media peers. “Audioboom is unique among its social media peers in concentrating on spoken word, rather than music, which is now a crowded market. This has enabled it to sign the leading content players, providing real barriers to entry, and allows for a lower cost of content acquisition,” the broker said.

Audioboom’s gross margin, it noted, could soar by 68 percent in 2016, as compared with Spotify’s gross margin at 23 percent. This is because Spotify pays higher royalties to music content producers.

Audioboom can also be a good consolidation target for larger companies “with considerable financial resources, looking to add scale to their operations,” according to Arden Partners. It could happen anytime soon, with M&As rising in the online streaming sector, more so than ever now that talk content’s role growing in the industry.