Considering its massive potential in an even faster growing marketplace the shares of Audioboom can be rated as a very interesting speculation, writes Mark Watson-Mitchell.
On Thursday of next week (18th) I am looking forward to seeing the interim results from Audioboom (LON:BOOM). They should be very positive and indicate that the current full year to end December 2019 could see revenue almost double from the $11.7m recorded last year, to around $21.5m.
Despite that massive increase in sales, Audioboom is still making a loss, which is totally understandable as the company continues to establish itself globally. The adjusted pre-tax loss last year was $5.3m, so the estimate for the loss this year of just $3.8m is actually really quite encouraging.
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The group, which has subsidiaries in both India and in Maryland in the States, is UK based and yet it is one of the leading global podcast companies. It has operating partnerships across Europe, Australia, North America and Asia.
The Company was one of the first to provide seamless dynamic insertion of advertising into the basic podcast content file as it is being broadcast and users are playing their podcasts.
By this direct insertion of the ads into the content it is far easier for the users to be fed advertising copy. This is so much more effective for both the podcast publishers and obviously so too for the advertisers, taking advantage of the direct broadcast.
Using podcast frequency together with listener data enables both the publisher and the advertiser to assess the revenue per 1,000 listens, known as eCPM (effective cost per thousand). The sell-through rates and the variation of advertising slots for each podcast generate revenues, with such slots being pre-podcast, during the podcast and at the end of the podcast.
When new content is created, it is uploaded to the Audioboom and its channel partners’ apps and websites, whilst automatic notifications are posted on the content partners’ various Facebook and Twitter pages.
The company’s channel partners’ content covers a plethora of popular interest, including sport, politics, news, films, music, and business. Content partners include the multiple BBC channels, Sky News, talkSPORT, The Premier League, the Wall Street Journal, ESPN, The Guardian, Mirror Group and CNBC.
Audioboom is fast becoming a trusted partner with both publishers and advertisers, both of whom are anxious to increase their audiences – great news for Audioboom, as it derives its income from helping to generate greater listening. It even has its own channels through which it derives income.
The podcasting industry worldwide is exploding in popularity and Audioboom helps to consolidate the business of on-demand audio and help it be as far reaching and profitable for all concerned.
Working with over 4,000 broadcasters and hosting over 13,000 content channels, Audioboom shares the content via Apple Podcasts, Deezer, iHeartRadio, BookMyShow, Saavn, Google Podcasts, Stitcher, Facebook, Twitter and Spotify.
Spotify is now the second largest broadcasting platform globally. All of Audioboom’s content is now available on Spotify, which is heavily promoting that content. This tie-up could prove to be a real winner for the group.
It appears that it has tight control of its overheads, and at its current rate of growth, estimates suggest that next year’s turnover could well be north of $30m, thereby helping to more than halve its operating loss to around $1.8m for the 2020 year.
This company is still at an early stage of its corporate development and it may well continue to operate at an overall loss for the next two years. However, I do understand that it is on cashflow breakeven currently, so tax-free (almost) profits could be earlier than the pessimists suggest.
With the shares trading at just 210p, the company is valued at £28m. Considering its massive potential in an even faster growing marketplace the shares of Audioboom can be rated as a very interesting speculation.