Rob Ellin is CEO, founder and chairman of LiveOne — this interview has been lightly edited for style and readability
Our Editor, James Cridland, spoke to Rob earlier this week, before their latest earnings data.
RE: We acquired PodcastOne and we continue to acquire, as you saw with the acquisition that we announced of Kast Media and now with Fantasy Guru. And I think you’re going to see more of those. You’re going to see the podcast industry rolled up. There’s going to be a real consolidation. I can easily see us buy three or four more podcast businesses in the very near future.
JC: What’s the thing that excites you about audio so much? Why get into audio when you’ve got all these live events as well?
RE: I’ve felt for a long time that radio is a melting ice cube. It’s just a matter of time. And digital radio now has an opportunity.
It’s so important that people have different opinions. It’s good to have different opinions and learn from people. I think that digital radio is giving that voice a real opportunity. And that’s why I focused on Slacker, which is a lean back experience, where we have 500 curated radio stations. We had such an opportunity to partner with Norm Pattiz. Sadly Norm passed away [in December 2022] but he was one of the great geniuses in the history of radio in finding hosts. We became friends - I was always a fan of his. I want to see people with different opinions, and I want to see people voice their opinion, and people to be able to challenge that opinion. It’s really important for society, around the globe. I think it’s going to be critical for this next election - having people with different opinions that are so extreme on both sides is very dangerous.
JC: Having talked about audio, of course, you’re launching PodcastOne TV later on in the year. Where do you see the future going there in terms of podcasts and video?
RE: Podcasting has gone from 200 million to 1.6 billion? That’s still in the first innings of where podcasting is going? You’re watching the habitual behavior of consumers move more and more to podcasts. We’ve grown from seven sponsors to over 700 in three years.
There’s always that joke - “you have a face for radio” - but there’s also a lot of hosts that have crossed over between radio and video. Now you’re watching video explode. And I think it’s just going to continue to grow. I’ve talked about second windows - podcasting becoming TV shows and movies. We just did a digital live show with Adam Carolla - I think there’s just so many opportunities for podcasters. This is a big opportunity for video, and the acquisition of assets from Kast Media has really expanded our video dramatically.
JC: So how is that acquisition of “certain assets of Kast Media?” - how’s that going?
RE: When we bought PodcastOne, it was a distressed asset. Luckily they had Norm behind it, so they had unlimited money - he could bail them out each time. But this is such an early stage for this industry. And Colin [Thomson] is a wonderful guy. He’s super talented, but he got himself caught in a rough situation where the banks pulled out - venture capital pulled out. And there was no money left for these small companies, unless you sold to Spotify or Apple - all those companies they bought were losing their shirts too.
Today, whether it’s Audacy, iHeart, there’s a lot of pain going on right now. If you have debt, you’re in pain. But if you can’t get money, you’re in a lot of pain.
So we stepped in and we said, - hey, this guy put together one of the greatest lineups in podcasting. Rob Dial, and Brendon [Schaub], and Whitney [Cummings] - it’s just a massive lineup, and you got to give them a lot of credit. But you also got to help them, right? And we couldn’t just step in and bail them out of the problem. We had to slowly try to fix as much as we could. So, whoever wants to come and be a real partner and change the economics - the 80/20 deals are all before, they’re never happening again, there have to be fair deals where both partners can make money.
We’ve done terrific so far. We’ve announced a couple of new shows, including Some More News. Millions of dollars are moving over. We said it could be as high as 10 million, and I would say we’ll be halfway there shortly. There’s no reason we can’t get all the way there.
We’ve spoken to every podcaster. We’ve offered really fair deals - equity in our IPO to help them. They have got to decide for themselves whether or not they want to go to another platform. No other platform is going to pay them for the past, they’re only going to work with them in the future. It has to be a win for everybody. I really hope more podcasters come over. Even if they just come for the distribution platform, they could get paid. We’ll all run it for them - we’ll help you, and if you get to know us well, and you get to see what we do, nobody’s going to leave. You’re not going to see a small company that is more entwined and entrenched with their creators. We’re a white glove, hands on, partnership. We’re going to keep holding their hands and keep growing with them.
We’ve gone through tough times with Podcast One before we acquired it. We made it clear to them you cannot move with a fistful of anger. You have to move over where you are truly in partnership with us, and all of us want to grow and build together and do something great together. And if we do something great together, we make history together. You are going to make your money back.
JC: So the acquisition is around shows. It’s not about the staff of Kast Media. It’s about the shows and the creative?
RE: We looked at all their assets. We don’t want people to lose jobs. We want to try to help them.
We’re growing fast. We just announced that this quarter will be over ten and a half million revenues. We only did 34 million last year, so that’s a $42 million run rate. If you put Kast Media and the acquisition of Fantasy Guru, we’re way over $50 million and this is the biggest pipeline we’ve ever seen in the history of the company.
No one has ever seen this big of a pipeline. These small podcasts that are truly focused on podcasting, and we’re the perfect candidate to really help them grow and build and utilize their community to grow. Jordan Harbinger is brilliant about it, right? He spends his own money, advertises on everyone else’s podcast, because he knows that’s the audience that wants more podcasts.
One of the smartest hedge fund managers I know at the JP Morgan conference says “I can’t believe you pulled off this acquisition. I got to tell you, the biggest problem in podcasting”. Well, I was scared to death of what he was going to tell me. He says: “The biggest problem is - there’s not enough hours in the day.” There’s so much great content, around history, science, math, politics, right. It’s hard to find it - there’s got to be a better search engine for it. We’re working on that now. You’ll see us do more and more. I’m really excited about where podcasting is going. I think it’s going to 10 billion by 2030. And that’s a big leap from 1.6 billion now. I think it’s a really exciting time for everyone in podcasting.
JC: Tell me about what’s happening with PodcastOne. You loved the company so much you changed LiveXLive to LiveOne, which at least meant I wouldn’t pronounce it ‘Live ex live’!
RE: I got so much heat for having an X as a logo. But I guess if you’re Elon Musk…
JC: Let’s not go there! But PodcastOne was announced as splitting from LiveOne earlier on in the year - the initial filing said January, and then we saw the end of March being mentioned… what’s the status of that spinoff right now?
RE: I changed the name in honor of Norm Pattiz. I couldn’t be prouder to continue to utilize that name. We’re using it across multiple divisions.
About the spinoff - we’re only spinning off a minority stake. So this is the first time ever you will have a public company on a major exchange, trading in the podcast industry. Everything will be consolidated up, and I’ll still run it as CEO, but we have such a great team. I think you’ll see an announcement imminently of us trading publicly. It’s been a terrible market for microcaps, for media and technology. We’re approved by the FCC, so effectively we’re public. It’s just a matter of when we start trading on the exchange. And I think you’ll see that you’ll hear about it in the next week or two - the exact date of both the dividend to our shareholders as well as the day we’ll be trading.
JC: The filing was a great read. I remember telling people to go and read the filing because it had so much positive data about the podcast industry. I was thinking - if there’s so much positive data about the industry, why would Live One want to spin that part of the business away? What was the thinking behind that?
RE: It happened somewhat by accident. We had announced that our pay per view business was going to go public, and all of a sudden the phone rang off the hook. JP Morgan is our banker - very rare, JP Morgan as bankers of a company this size. But we started getting phone calls left and right and they became an opportunity where we raised a quick $8 million when we were struggling during COVID. But really, it was a great opportunity for us to bring in a little bit of capital. We’ll be up in trading shortly - and again, it’ll be consolidated into the parent company. But I’m looking forward to when we begin trading. And, you know, I’ve had a history of ringing that bell!
JC: There’ll be quite a few people on standby flights, I would imagine, trying to ring that bell with you.
RE: There’ll be numerous podcasters there. We’re a family. Our company is a family. Our team is a family. We fight together. We all get into the bunkers together and we battle through the worst adversity you can have. You’ll see a lot of really exciting podcasters right there at the podium with us.
JC: You’ve talked about consolidation a little bit. What else do you think is going to be happening in this in podcasting?
RE: So we announced an exciting opportunity with a company called Legible - streaming of books. I think there is a dynamic opportunity to add audiobooks. We just added over 100 podcasts into the Tesla cars, so you’ll see Adam Corolla and you’ll see T-Pain, you’ll see LadyGang and Jordan Harbinger and so on. I’m a huge believer in self-driving cars. But for investors who are patient, looking at the future, I think self-driving cars are going to be a dynamic, enormous, enormous piece of the puzzle. And just think about those cost savings.
JC: Some people talk about the lack of measurement as being a real issue in terms of podcasting. I have to say, I come from a radio background - so talk to me about lack of measurement! Do you see that as being an issue? What’s holding us back as an industry?
RE: I don’t think we’re being held back. I think it’s just a maturation, right? You watched this consolidation: Spotify, Sirius, Apple, Amazon, YouTube, everybody bought off all these podcast businesses, right, for huge amounts of money. If you look at the numbers, we just moved up to number ten in the Podtrac charts. This industry is just going to keep growing.
I watch my kids, my 29 year old, my 27 year old, my 21 year old, 30% of their time has moved from just music to podcasting. I think it’s amazing. I think we’re still in the first innings - and we’re about to explode going into the next couple of years. I don’t know what people are complaining about with metrics. It’s really easy to see your metrics, right? This is very different than radio or television. Can’t fool the sponsors, right?
JC: Rob, thank you so much for your time. I really appreciate it.