Even if those are not exactly right, just look at them directionally. And finally, I would just say that just remember, the podcasting industry in terms of big advertisers, well, consumers listening habits, big advertisers coming to podcasting, which is so important because that’s where big dollars come from, big advertisers. That is really only a couple years quite frankly in the making. So when Bob talks about the early days and we see no signs of anything slowing down. Look to listening what’s out there with the consumers, I think it’s something like 85% or some number close to that of people that start a podcast listen to all the way through. So, I don’t think any of us have been running media companies for a long period of time have seen engagement at that level.
And that’s critical because that engagement is what’s driving this dramatic growth in ad revenue.
Jim Goss: Couple of other things. Political, I know you talk about reach, but video seems to trump reach in terms of attracting political ads, so local broadcast always gets the lion share of that business. I wonder, you feel there’s any risk to digital or other forms taking any of the political momentum you’ve tended to have because it’s not the biggest category, but it’s an important category and very profitable category for you?
Bob Pittman: Yes, no to the contrary. I think video has always been there and anybody wants to see their faces always bought video, I think. So now the only variable now is reach at a certain point they got to say, if nobody’s seeing it, they got to worry about getting their message out. And I think finally people are really beginning to appreciate, I think with the success of streaming audio and the success of podcasting, the impact of the conversation. And indeed, I think probably most products, and by the way, most candidates probably, it’s not seeing their face. It’s hearing the conversation about the candidate and nothing does that better than broadcast radio. So again, I think if you look at the history of sort of growth we’ve had in political advertising in the 2020 cycle and 2022 cycle, I think, we’re encouraged that we’re in good shape on political.
Rich Bressler: Jim, and just one thing you mentioned, I think when you asked you a question, you talked about video and digital and just and Bob, just to hone back on that. From a broadcast standpoint, remember going into this election cycle as well as we’ve done past election cycles, our capabilities from a data standpoint our ad tech capabilities that we’ve talked about with our ability just at a very high level to plan can — to plan out advertising campaigns, to monitor advertising campaigns and report out on them, that goes obviously not just from a digital standpoint, but we now have capabilities on broadcast that make our broadcast look like digital. Again, not one to one, which as we all know, the world has gone away from, but one, two, and four many. And we’ve got capabilities going into this political season to get our dollars that we didn’t have in the last election cycle. So, I wouldn’t — that’s not a small detail to overlook.
Jim Goss: Okay. Thank you. One last one, I know, you can’t exactly create a concert movie like Taylor Swift Eras tour, but you do have things that you put on ABC and Hulu as you mentioned, the Jingle Ball. But are there events you’re creating that could be monetized with sort of streaming relationships where it might be something that’s accessible on an ongoing basis with Netflix or something of that nature that could add to the monetization of those types of events?
Bob Pittman: The answer is yes, and indeed this year we moved the iHeartRadio Music Festival to Hulu. And I think that’s a perfect example of the success of that. And again, we do a lot of other major temp pole events and, we are wide open to that and really looking at where’s the consumer and how do we reach them? And we always feel to get the audience monetization follows.
Operator: We’ll move to our next question from Dan Day at B. Riley Securities.
Dan Day: So just wanted to push on the EBITDA guidance a little bit more, I think, the presumption coming into this share was that the cost savings efforts, the real estate reductions you guys have talked about would at least stabilize the margin profile, even if we saw continued softness in the advertising market. It seems like you’re implying a pretty big step down in margins here, 4Q kind of low 20s versus higher 20s in almost every 4Q you’ve reported. Just one of the things I hear from investors is that it seems like there’s been a number of quarters where these items have mostly offset any fixed cost savings. So just any thoughts there when those might start to become more evident and any pushback you might give to that?
Rich Bressler: Well, look, I think they are in all honesty becoming evident. And one thing I want to just highlight, and then I’ll spend 30 seconds on a little more detail is I wouldn’t overlook Bob’s comment that he said, when we were discussing earnings about — this is — it’s obviously there’s a lot of uncertainty out there environment. I think people have heard this one very earnings call with respect to advertising-based companies to different degrees. The ability to talk about guidance for Q4, whether you go into 2024, is challenging. And I think Bob highlighted this is based on what we know today, but if you look at just historical what’s happened. We’ve seen periods of time where we have had a lot of business placed at the end of Q3 — I am sorry, at the end of November and December.
When you look at this year, kind of in particular and just kind of contrast it just to last year, remember, we’re copying against last year. If you look at margins both in the MPG level and we highlighted in this in our discussion at the audio media services level a dramatic difference in what we had in political revenue year over year. I think last year we had $66 million in political revenue. At MPG, we had 20 about mid twenties — I’m sorry, about 60 million. It should be at MPG in mid 20s at audio media services. And that comes in the extremely high margin, quite frankly, that political of it is our highest margin business. So, that’s really — quite frankly, the biggest piece. And then the balance going the other way is obviously the increase in dag.
We do have some nice cost savings in two in Q4. And as a reminder, we announced a $75 million program at the beginning of this year that we started layering in during Q2. And we’ve got a nice benefit in Q4, and we’re lapping year over year, but I think, we continue to look at costs just a way of life. And I think also as we highlighted two other things, one is, we have bonuses back last year we didn’t pay bonuses to any significant amount across our employee bases. And finally, the trade and marketing expenses that we touched upon with both the Hulu deals now streaming the iHeart Music Festival and our deal with ABC. And so those are not comparable year over year. And those hit, even though the music festivals in Q3, those hitting Q4. So that’s really the items that are affecting comparability.
Dan Day: One more from me. Higher level question on podcasting. It feels like we’ve hit a tipping point, where within podcasts, like a majority of them, the most popular ones seem to have some sort of video component to them typically like hosted on YouTube or some other platform in addition to that, like, more traditional audio only format. So, I’m just wondering, how you’ve played in that whether that’s impacting discussions with talent and your thoughts on this sort of hybrid audio video approach that podcasting seems to be moving towards.
Bob Pittman: I actually disagree. I don’t think it is moving to that. I think you have some shows that are hybrids, but I don’t think that is an overall trend at all in the podcasting business. As a matter of fact, I think most people have been surprised by how little interest there is in seeing what they’re hearing. I think people who’ve come out of the video business think everybody wants to see it, and the reality is, no — they don’t. They’re cooking, they’re driving, they’re doing something else, and it doesn’t fit in well there. And I think, look, everybody who’s in the video business would love to capture podcasting that are all trying desperately to do it. And we have some shows that are on both. And if it’s the best way to do it, we certainly can do it. The video today is not much more expense to add to it. We’re just looking for the best way to make money.
Rich Bressler: And one last thing, I may just say that, look, if you look at what our revenue growth is both through the nine months and then what I just talked about Q4 also is reminded, as we’ve said, podcasting is accretive to the overall companies, if it a margin out there. So you look at what Bob just articulated, that is our overall part of our podcasting strategy. I think it’s hard to argue that we’ve not on the right strategy, that we’ve enjoyed pretty good success in the podcasting both on revenue and also most importantly driving it to the bottom line for the benefit of shareholders and profitability. So with that, I’d like to thank everybody for listening to the iHeart story. Bob, myself and the rest of the management team we are available for questions and follow up and appreciate everybody’s time and support. Thank you.
Operator: And this concludes today’s conference call. Thank you for your participation. You may now disconnect.
