More Revenue Sources are the Key

[joshzz]

Our radio stations hosts some concerts on a regular basis but it looks like it could be a huge revenue source based on Townsquare's earnings. The last concert I hosted was in March but we're thinking about a more robust schedule going into 2016.

Here's more on Townsquare from Inside Radio (a great source for all radio)

A 10.6% increase in second-quarter revenue to $117.5 million at Townsquare Media is being trumpeted by the company as further validation of a diversification strategy built on the tent poles of local radio, live events and national online portals. But it was events that paid the biggest Q2 dividends for the publicly traded company.

Driven mainly by music events, especially its multi-date festivals, event revenues increased 50.4% to $29.7 million during the second quarter when compared to the same period last year, Townsquare said Wednesday. It cited, among other factors, increases in attendance and revenue per attendee. The addition of three new festivals brought $2.1 million in incremental revenue in the quarter. Without them, event revenue would have been up 39.9%

Townsquare has also invested aggressively in a number of non-talent-based events, such as a national tour of craft beer festivals that is currently rolling out. “We’re doing lots of different things,” CEO Steven Price said during the company’s results call Wednesday.

 

[TheBigA]

To me, it's not much different from what DJs did in the 60s, promoting concerts for some extra money. Now, though, concert promotion requires deeper pockets and more insurance and guarantees than any DJ can bring. Radio stations are naturals in this role. This was the idea Sillerman had 15 years ago with Clear Channel and Live Nation. But yes, radio stations need other revenue. Fifty years ago, the healthiest radio stations were part of companies that did other things, such as sold insurance, made electronics, owned TV stations and newspapers, or sold cars. Most of those heritage owners got out in the 80s and 90s. So now the companies that own radio need to do the same thing. It worked then, it can work now. One of the myths of the late 90s was that radio was a big enough and stable enough business to exist on its own. We know now that's not true.

 

[westcoast]

One of the myths of the late 90s was that radio was a big enough and stable enough business to exist on its own. We know now that's not true.

Are you sure about that? I can think of tons of station owners who are only in the radio business and who are doing quite well.

The thing that hurt so many companies both big and small was the enormous debt they took on to acquire the stations. They were still bring in lots of money but it was all going to servicing the debt. You can't blame radio for the bad business decisions of some owners.

 

[TheBigA]

The thing that hurt so many companies both big and small was the enormous debt they took on to acquire the stations. They were still bring in lots of money but it was all going to servicing the debt. You can't blame radio for the bad business decisions of some owners.

The advertising business is cyclical. Radio needs to be diversified enough so that it can withstand dips in the cycles. My dad taught me not to put all my eggs in one basket. That's a good lesson. Too much debt is only a problem when the people you're in debt to call in their loan at a down point in the ad cycle. That's what happened to several radio companies in 2008. Otherwise, it's no different than the US government being trillions of dollars in debt, and still having a very strong economy.

 

[gr8oldies]

OK, who goes to Progressive Insurance's next board meeting and convinces them to buy 7 radio stations?