As radio fight its way back to 2019 revenue totals for its core over-the-air business, digital continues to be a bright spot. And, for Townsquare, which reported Q1 earnings Monday, it was a very bright spot.
Townsquare Interactive, the company’s monthly digital solutions program for local advertisers, added 850 net subscribers in Q1, the 12th consecutive quarter of 850 or more net subscriber additions. Revenue at Townsquare Interactive increased $2.5 million, or 14.9%, to $19 million.
Townsquare Interactive services 23,600 small businesses both in and outside of markets where the company has radio stations. Each business pays Townsquare $300 per month for the service. CEO Bill Wilson believes there are 8.8 million small businesses in the United States that are potential customers for Townsquare Interactive, a $32 billion pot of potential digital revenue.
Townsquare Interactive throws off a 30% profit margin and in early 2022, Townsquare plans to open a West Coast office to expand the division.
Digital revenue (Townsquare Interactive, Ignite and Amped) made up 49% of Townsquare’s revenue in the first quarter of 2021. The highest percentage ever for the company.
Townsquare expects to grow its current $167 million of digital revenue (on a trailing 12 month basis) to $250 Million of Digital Revenue over the course of the next 3 years (+50% growth).
Taking a look at the full Townsquare revenue picture in Q1, net revenue, including over-the-air ad revenue, decreased $4.7 million (5%), to $88.8 million, as compared to $93.4 million in the same period last year. Advertising net revenue decreased $4.8 million (6.4%), to $69.8 million, and Live Events net revenue decreased $2.4 million (99.7%), to $7,000.
Wilson expects revenue in Q2 to be up 36 to 40%. In 2020, the second quarter was hit very hard from government shutdowns due to the pandemic. The goal, for every radio company, is to get back to 2019 revenue levels as quickly as possible. 2020 revenue started strong for radio, then March hit, the pandemic took hold, and the bottom fell out.
Wilson also expects to see live events ramping back up as the year move along and return to normal in 2022. Townsquare had a very successful event this quarter in Tyler Texas with record revenue as people clamor to get out of their homes after being locked down for nearly a year.