How Will Radio Survive The COVID-19 Nightmare


Is the slow-rolling COVID-19 vaccine roll-out having an impact on local advertisers enough so they increase their ad spend? That’s the focus of our daily series of interviews with radio executives. Salem Media Group has 99 Radio stations in 35 markets. We spoke to Salem’s President for Broadcast Media David Santrella to get his take.

Radio Ink: The Vaccine is here (you are living proof), what sense are you getting from the community, the people you talk to about it, even though the roll-out is slow?
David Santrella: It’s a bit of a mixed review. There’s a great deal of excitement around the idea that these vaccines have the potential to fully reopen the economy and irradicate this COVID strain. On the other hand, about 40% of the population is hesitant to take these vaccines. They came out quickly and the long-term effects of have not been realized and I think that gives some folks a reason to hit the pause button. In terms of the slow roll-out…I am not sure any of us that are not in that business realize what an immense undertaking it is. There are over 330 million people in the United States. Producing enough of the vaccine with the significant oversight it requires, compounded with the complexities of getting it safely into the hands of those that will administer it is a “taller than tall order.”

Radio Ink: What is the business community feel in the markets you are operating in?
David Santrella: It varies by market based on the level of lockdown still enforced in a particular area. In general, however it seems that there is a cautious optimism. Business owners are optimistic because they see signs of the economy reopening, because there are vaccines being administered, albeit at a slow pace, and because many of them have received some government assistance through PPP loans , and other COVID Relief options which has provided some temporary assistance. But the challenges they face are immense. Utility bills still must get paid. Most landlords expect the full rent to get paid and have tacked on any short-pays to the remaining months in the lease which increases operating expenses for the business going forward. So those realities have many businesses hanging on by their fingernails. They fear more lock downs, or steps backward which will thwart any forward momentum they are gaining. And they fear that any of those would be a final blow to their business.

Radio Ink: How are pacings looking compared to the middle of 2020?
David Santrella: We’re publicly traded so it’s difficult to be too specific here. Pacing’s are certainly looking better but it’s all relative. It’s a little early to get an accurate line of sight on the middle of the year. In January and February of 2020, the economy was still open so those comps are irrelevant. The back half of March of 2020 was the worst, followed by April, and then May, so we need to be pacing ahead in those months because the comp is based on an almost complete economic shut-down prior year. June through August will likely give us the first real read on how we’re doing because it will be the most “apples to apples” comparison. I know a lot of folks in the industry are hoping that by summer it will look like 2019 but I am not sure that it will. A lot of us make good top and bottom line revenue from events and I am not sure those will come back in 2021. If they do, capacities will be limited and that will impact profitability. Overall, I think it will be a much better year than 2020 but I am not sure it will look like 2019. The economy is just not there yet. I am convinced however than when we do start to see a true reopening of the economy, we will see a significant uptick in our business. There’s massive pent up demand. Everyone I talk to seems to be very anxious to travel again, dine out, go to a ball game, see a concert, etc…And then there’s all the home improvement projects. Home improvement has already been pacing up as consumers have had to turn spare bedrooms, garages, etc…into home offices. But more than that, COVID has put a new value on our homes and the comfort and safety they provide. In 1981 Faith Popcorn coined the term “Cocooning”, which is defined as “the need to protect oneself from the harsh unpredictable realities of the outside world.” She explained that we would likely see a rise in home improvement spending as consumers tried to make their “cocoon” as comfortable as possible. Now, and with the lock-downs of COVID fresh in our memories, as individuals begin to feel more secure about the economy and their own employment I believe we will see a surge of home improvement projects as people seek to build more comfortable cocoons. Radio stands to be a massive beneficiary of advertising from all of this because radio captures consumers at the very front part of the buying journey. We make them aware of products and services that exist and we provide familiarity and credibility to businesses.

Radio Ink: Do you think some form of work from home will be with radio for a while?
David Santrella: I do. In fact, I think many industries including radio will look for opportunities to decrease their real-estate footprint by allowing some employees to work from home completely. There will need to be a balance here, however. As it pertains to our business, programming and sales just seem to work better in a collaborative atmosphere. A work-at-home environment does not foster the competitive and collaborative nature of our business that is the fuel for motivation and innovation. When you hear another teammate hang up the phone and you know they have just closed a deal, if you have a competitive bone in your body, you instantly feel the need to close a deal too! When air personalities can hangout and chat for a while it spurs on creativity. When both sales and programming start talking it gets even better because that’s where the magic happens. And all of that is lost when everyone is hermetically sealed and their scope of exposure to their coworkers is limited to a computer screen and a Zoom call.

Radio Ink: Overall, how is your company doing?
David Santrella: We’re really excited about how we are doing. Salem has a unique business model that somewhat insulates us from downtrends in the economy. For many years our national ministry partners have remained steadfast and faithful in their commitment to reach and teach listeners in the major cities where Salem is located. Additionally, we have strong direct relationships with business owners and therefore we don’t depend as much on the agencies to drive our local spot business. Plus, we have some tremendous growth initiatives. In 2018 we launched Salem Surround, which provides digital marketing services to new and existing clients. That’s grown nicely since its inception and in 2020 it grew by 35%. As a result of the Pandemic, Salem developed which is a TVOD (Transactional Video On Demand) platform with free and paid content that complements the interests of our audience and often times is not available on other platforms such as Netflix or Amazon Prime. This generated substantial revenue in the last half of 2020 which helped offset other shortfalls resulting from the COVID 19 economy. We expect this platform to continue to grow in 2021. The Salem Podcast Network is our latest development. Like, the Salem Podcast Network carries content unique to the interests of our audience. The early numbers in both podcast downloads and ad revenue indicate that we have moved in the right direction. Our network has been on fire and continues to pull down great results for our clients and for our company. Even tough none of us are pleased with the present challenges, these challenges have created a mental toughness and have spurred on greater creative thinking that we believe has put us in a pole position as we move out of a COVID environment.

Radio Ink: Is Radio out of the woods yet?
David Santrella: I think some markets are closer to the edge of the woods than others, but I am not sure that any market is completely out of the woods yet. The damage done beginning in March 2020 was quick and extensive and it will take a while to recover and for business decision makers to feel like there is some real market stability. It’s kind of like breaking a leg. You can break a leg in seconds. Recovery takes months. So it goes with the marketplace.

David Santrella is the President of Broadcast Media for Salem Media and can be reached by e-mail at [email protected]

Our previous interview in this series:
Ed Levine – Galaxy Media
Ben Downs – Bryan Broadcasting
Ron Stone – Adams Radio Group


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