The size of Entercom’s investment into the world of podcasting has been revealed. According to a regulatory filing on Friday, Entercom says it paid $9.7 million to buy its 45% stake in the on-demand audio entertainment provider DGital Media. Entercom also tells investors that it has an option to buy DGital outright in 2021 under the terms of its purchase agreement.
In a quarterly filing with the Securities and Exchange Commission, Entercom says it has signed a multi-year services agreement under which DGital will dedicate “significant resources” to create on-demand audio content leveraging the broadcaster’s roster of local talent and relationships in the world of sports, news, politics, music, comedy and technology. In return, not only will Entercom make the cash investment, but it will also provide DGital Media with what the radio company calls “significant” annual marketing and promotion across its 126 radio stations in 28 markets.
The investment comes on the heels of a new IAB-PwC report showing podcast ad revenue has grown by 85% this year and is on track to reach more than $220 million in 2017. According to The Infinite Dial from Edison Research, 67 million Americans aged 12+ listened to a podcast in the past month.
Entercom president and CEO David Field said the partnership would allow Entercom to scale its podcast capabilities. “Upon close of our CBS Radio merger, Entercom will be the clear leader in creating original audio content and we are committed to reaching our listeners in any way they wish to engage with us, whether through live over-the-air broadcasts, streaming audio, on-demand audio or in-person events and experiences,” Field said. “DGital Media has an impressive track record of developing and producing podcasts and growing audiences for their content partners. This partnership will strategically enhance our ability to deliver compelling audio to the public, wherever and whenever they please.”
DGital Media launched in May 2015, led by David Landau and Spencer Brown, the former co-CEOs of Dial Global/Westwood One, in a partnership with venture capitalist Michael Rolnick. Since then it has launched a slew of podcasts, many focused on sports, including a recent series in partnership with Collegiate sports rights holder Learfield. DGital Media produces podcasts from writer, columnist and sports broadcaster Tony Kornheiser, mixed martial arts promoter UFC, the Derek Jeter-founded Players Tribune and Yahoo Sports. Most recently it launched “Suiting Up,” hosted by entrepreneur, online education guru and world-class lacrosse champion Paul Rabil.
In April DGital recruited Jay Green from AdLarge as senior VP of digital strategy and analytics.
“We see Entercom as the perfect catalyst for the next phase of our growth,” said Brown who is CEO of DGital Media. “As the leading creator of live, original audio content in sports, news and music, Entercom offers DGital Media access to a national audio platform that will accelerate the development of our audience engagement efforts. This strategic investment helps us extend the reach of our partners and build their audiences across the audio landscape.”