Radio Ink Magazine – August 12, 2019

24 RADIOINK•COM AUGUST 12, 2019

we actually had more listeners to our

broadcasts. That speaks to the power of

the content our on-air talent is creating

over the air and online.

Radio Ink: You have said your digital

business will be a $200 million

business. How big can that be over time,

and will it surpass spot revenue?

Wilson: There is no doubt digital will sur-

pass spot revenue. That is a “when,” not

“if” question. Our last earnings call, which

was for Q1, we shared that a third of our

revenue was digital — about $120 million

and growing over 20 percent year-over-

year.

We have Townsquare Interactive, our

digital marketing solutions company —

we create a Web presence for small and

medium-sized businesses doing reputation

management, directory listings, SEO, all of

those important things for a business.

We started Townsquare Interactive in

2012 organically, from the ground up,

with an amazing team and world-class

technology platform built in-house. We

now have 16,200 subscribers who pay us,

on a monthly basis, roughly $300. That

is currently on an annualized run rate at

the end of Q1 of $58 million. That business

on its own will be $100 million in revenue

within three to five years.

We broke out the business as its own

segment so that investors external to the

company can see the profit profile of that

business. I have always shared that it is

about a 30 percent profit margin business,

and we now show that in our external

financials.

The third segment is called Townsquare

Ignite, which is our in-house technology

platform for digital programmatic adver-

tising business. That is our fastest-growing

business from a revenue standpoint as

well as a profit standpoint. On its own,

Townsquare Ignite will also be $100 mil-

lion in revenue in three to five years.

Those two businesses will be $200 million,

but we also have our owned-and-operated

websites, and platform all of the client

solutions around that.

Thus we will be well north of $200

million of digital revenue in three to five

years. That will clearly surpass our spot

revenue. Radio is growing in low single

digits, while digital is growing double

digits. It’s clear those lines will pass each

other, not because radio is receding,

but more importantly, because digital is

exploding. Radio gets 7-8 cents of every

dollar now in the U.S. Digital gets about

52 cents of every advertising marketing

spend.

For Townsquare, we’re fortunate that

we’re competing for 60 percent of the

spend, where a traditional broadcaster for

radio, without a digital platform, you’re

competing for less than 10 percent. We

feel confident we will continue to capture

a large share of broadcast and digital

while also eating into print and direct

mail spends, and continue to have strong

growth as a result.

Radio Ink: Where does podcasting fit

into all of this for Townsquare?

Wilson: We love podcasting. A lot of our

talent are doing podcasts. Our philosophy

is to be wherever the consumers are and

create that content, so our brands extend

to every platform, including podcasts. If

you look at the industry overall, there is a

nascent profit profile for podcasts today.

There’s not a lot of companies generating

meaningful profit yet. There is revenue

and audience there. It is something we are

doing.

We don’t necessarily highlight it exter-

nally. There is not a lot of profit margin

there today, but I think it is incredibly

important. Radio is in the best position

moving forward because of our connection

to the community and our on-air talent,

and we are already creating audio content

to leverage those assets. We are extremely

bullish on podcasting.

Radio Ink: Why did you get out of the

event business?

Wilson: We are still in the event business,

and events are important to our company.

We do over 200 live events every year and

will continue to do that in our local mar-

kets. What has changed is getting out of

events that were not in our markets.

As the company had great success in

our markets through the years, we moved

outside our markets, and my perspective

was that we did not have a clear competi-

tive advantage in doing that, and it would

be best to put our financial and human

resources in our local markets.

That was part of our reorientation to

what I call the “local first” mandate. We

shed assets like the carnival business,

North American Midway Entertainment,

in 2017. On our last earnings call I shared

that we would be selling our music festi-

val business, which was multi-day music

festivals outside our markets. There is a

misperception that we are stepping back

from live events, and nothing is further

from the truth. In our communities we’re

hosting not only great community events

and functions, but providing great enter-

tainment value. We will continue to do

over 200 local live events, but they will be

in our markets.

Radio Ink: Describe the perfect

manager.

Wilson: We are hiring media executives.

They don’t necessarily have to have radio

experience. We are looking for great man-

agers, period. For us it is someone who

embraces all forms of content and under-

stands the connection to the community

that our brands have, as well as empower-

ing, coaching, and mentoring their teams

on a daily basis.

I feel so honored to have such a pas-

sionate group to work with. I think that

it’s tied to the local markets, that sense

of connection to the community. They get

feedback in a physical form and through

our digital platforms. You need a strong

leader, but a strong leader without a

great team doesn’t mean anything. A

primary part of their job is recruiting

underneath and retaining the best. Our

core focus is to retain the best talent we

have and recruit where we need it.

I was in Amarillo, where we had a new

market manager recently join us, Carolyn

Carver, who is so energized. In Bismarck,

where I was a few days ago, we hired

a new operations manager, Rick Acker.

More and more people are seeking us out

who are in media and the radio industry,

acknowledging that we love radio and it’s

our foundation, but we are really digital,

live events, and a radio company. As a

result, we’re getting great talent relocating

from larger markets to our size markets

because of the platform we have.

Scott Richman in our Missoula market

worked with me in the early ’90s in the

music industry and then at AOL. He went

on to run digital for Madison Square

Garden, and then he joined our team six

years ago. He has built an incredible team.