Acquired ad revenue growth expected from improving ad market rates and optimization of programmatic CPMs
Near term integration of Auddia's AI into the Radio FM (RFM) app delivers a premium ad-free AM/FM listening experience for existing users who elect to subscribe
Near term integration of Auddia's AI into the RFM app provides Auddia ad-free podcast partners access to global user base
BOULDER, CO - (NewMediaWire) - February 29, 2024 - Auddia Inc. (NASDAQ:AUUD) (NASDAQ:AUUDW) ("Auddia" or the "Company"), a proprietary AI platform for audio identification and classification and related technologies, that is reinventing how consumers engage with AM/FM radio, podcasts, and other audio content, detailed today how the company expects to drive significant synergies through its proposed acquisition of streaming app Radio FM.
Theo Romeo, CMO and Chief Product Officer of Auddia, said, "Radio FM currently generates almost all of its revenue from digital ad placements on a free tier. Our product integration strategy is to leave this free tier intact and integrate our AI into the existing Radio FM platform. This will give the acquired user base of 4.6 million monthly users the option to pay a subscription to listen to AM/FM streaming stations without any commercial interruptions."
By not altering the free tier, Auddia expects no interruption to acquired ad revenue and continued growth from improving ad market rates and optimization of programmatic CPMs. Premium subscriptions for ad-free AM/FM listening are expected to begin within two quarters post-acquisition.
As previously announced, Auddia has recently productized a second AI technology that extends the Company's premium ad-free listening experience to podcasts in addition to AM/FM radio streams. Although Radio FM provides users with access to over 50,000 international AM/FM radio streams, they also provide their 4.6 million users with access to podcasts participating in Auddia's ad-free partnership once Auddia AI is integrated into the acquired RFM app.
"Our initial integration strategy is aimed at preserving acquired revenue by ensuring the user experience is essentially unchanged immediately post-acquisition," said Michael Lawless, Auddia CEO. "We will maintain a familiar user experience through the existing RFM app for all users and expose them to premium listening options within the familiar confines of their current app. As users get comfortable with the premium AM/FM and podcasting listening experiences inherent in the faidr AI integrations, we will eventually merge user interfaces of faidr and Radio FM into a single audio Superapp. We believe this strategy will preserve all acquired revenue while adding synergistic high margin subscription revenue and ultimately deliver cost synergies as well once the acquired RFM app is retired."
The user base that Auddia will be acquiring from Radio FM if the financing can be arranged is a user base where 100% of the users are already listening to streaming AM/FM radio on a mobile device. This is the ideal user base for Auddia's premium mobile AM/FM streaming radio experience currently delivered through faidr. Auddia management believes that if a subscription conversion rate of 5% can be achieved across Radio FM's acquired user base of 4.6 million monthly listeners, then the company will achieve profitability in 2025.
If the Company is successful in executing all three targeted acquisitions, the timeline to profitability is expected to accelerate.
About Auddia Inc.
Auddia, through its proprietary AI platform for audio identification and classification and related technologies, is reinventing how consumers engage with AM/FM radio, podcasts, and other audio content. Auddia's flagship audio superapp, called faidr, brings two industry firsts to the audio-streaming landscape: subscription-based, ad-free listening on any AM/FM radio station and ad-free podcast listening with the addition of interactive digital feeds that support deeper stories and open untapped revenue streams to podcasters. faidr also delivers exclusive content and playlists, and showcases exciting new artists, hand-picked by curators and DJs. Both differentiated offerings address large and rapidly growing audiences with strong purchase intent. For more information, visit: www.auddia.com
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 about the Company's current expectations about future results, performance, prospects and opportunities. Statements that are not historical facts, such as "anticipates," "believes" and "expects" or similar expressions, are forward-looking statements. These forward-looking statements are based on the current plans and expectations of management and are subject to a number of uncertainties and risks that could significantly affect the Company's current plans and expectations, as well as future results of operations and financial condition. These and other risks and uncertainties are discussed more fully in our filings with the Securities and Exchange Commission. Readers are encouraged to review the section titled "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, as well as other disclosures contained in the Annual Report and subsequent filings made with the Securities and Exchange Commission. Forward-looking statements contained in this announcement are made as of this date and the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
