Three decades of courtside seats at Los Angeles Lakers games gave Westwood One (DIAL) founder Norm Pattiz not just a front-row view of Kobe Bryant—he’s built a Rolodex of Hollywood’s top names. Now Pattiz is getting his celebrity pals to create talk shows for a venture he began in February, PodcastOne, which sells ads in its free, downloadable radio programs. Superagent Ari Emanuel, who sits next to Pattiz at Lakers games, helped sign clients such as Kathie Lee Gifford.
Pattiz is using the formula he honed at Westwood One—bundling traditional radio shows to create a bigger target for advertisers—and updating it for the Web. Gifford saw enough potential to start Kathie Lee and Company three months earlier than planned, kicking off her first interview in October with Regis Philbin. “It’s like sex. If you’re both excited, it’s time to do it,” says Gifford, sipping pinot grigio after recording a segment with Kris Jenner at PodcastOne’s Beverly Hills studio. “Don’t wait, because somebody is going to lose interest.”
While U.S. advertising on Internet radio outlets such as Pandora (P) will reach $331 million this year, podcasts have been stuck at about $34 million since 2010, says researcher ZenithOptimedia. Pattiz, 70, says he’s out to steal advertising from traditional radio, where national networks draw $1.15 billion in ads a year. His lure: one-hour shows from celebs including love guru Dr. Drew Pinsky, sports radio host Dan Patrick, and comedians Russell Brand, Dennis Miller, and Adam Carolla.
The audience for U.S. podcasts has surged 58 percent since 2010, says EMarketer. With 200 shows, PodcastOne averages 100 million downloads a month. Wrestler “Stone Cold” Steve Austin’s podcast gets 1 million of those. Within a week, Gifford’s first show attracted 100,000 listeners on iTunes.
So far, Ford Motor (F), 21st Century Fox’s (FOX) Fox, Walt Disney’s (DIS) ABC, and Hulu.com have aired commercials on the podcasts. “You can really identify who is listening,” says Patty Newmark, chief executive officer of Newmark Advertising. Almost all her Fortune 100 clients use podcasts, she says. Podcast-One says it will see $8 million in sales this year, and it projects $15 million in 2014. Pattiz says that mirrors the early years at Westwood One, which he started in 1983. When he departed in 2006, revenue was about $500 million.
To build an audience, Pattiz is signing social-media-savvy celebrities and asking them to interview their A-list friends. He also books his lesser-known hosts as guests on more established programs. “I don’t have an advertising budget for any of our shows,” he says. “I don’t need it.”