Q3 2020 Townsquare Media Inc Earnings Call
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Good morning, and welcome to Townsquares third quarter Conference call. As a reminder, today's call is being recorded and your participation implies consent to such recording at this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad with that I would like to introduce the first speaker for today's call Claire Yenicay Executive Vice President. Please go ahead.
Thank you operator, and good morning, everyone. Thank you for joining us today for Townsquares third quarter financial update with me on the call today are Bill Wilson, our CEO and Stuart Rosenstein, our CFO and executive Vice President Please.
Please note that during this call we may make statements that provide information other than historical information, including statements relating to the company's future expectations plans and prospects.
These statements are considered forward looking statements under the safe Harbor provision of the private Securities Litigation Reform Act of 95 and are subject to risks and uncertainties that could cause actual results to differ materially from these statements due.
These statements reflect the company's beliefs based on current conditions that are subject to certain risks and uncertainties, including those that are detailed in the Companys annual report on form 10-K for the year ended December 31st 2019 filed with the FCC.
You May also discuss certain non-GAAP financial measures, including adjusted EBITDA and adjusted operating income between May referred to as profit in our remarks and make certain pro forma adjustments such non-GAAP financial measures should be used in conjunction with all the information contained in the quarterly yearend and current reports available on our website at this time I would like to turn the.
All over to build off of.
Thank you Claire and thank you all for joining us this morning.
I'd like to start this call by acknowledging the hard work and dedication of the entire town square team.
Our team continues to impress me, each and everyday with their passion for what they do and their dedication to their local communities and to our company as well as their adaptability during these challenging times.
Our teams focus and commitment to do their job with their best ever each day, despite the circumstances, whether it be the challenges of the pandemic, where the hurricanes that swept through our Louisiana markets twice.
Hi, Super serving our audience and our local advertisers has resulted in a significant improvement over our business each month since the pandemic hit hardest in April.
I'm proud to say that our third quarter financial results exceeded our goals and expectations and.
As we look out to the fourth quarter and into 2021, we believe that we will continue to see strong improvement in our business absent any significant external disruptions.
As I shared on our Q2 earnings call. My goal for Q3 was to improve our net revenue to close to negative 20% year over year from Q2's negative 35% year over year decline.
In fact, our net revenue far exceeded this goal with net revenue negative 15% year over year in Q3, an improvement of 20 percentage points.
This led to a material increase in adjusted EBITDA.
From 2.1 million in Q2 17.5 million in Q3.
We experienced sequential net revenue improvement throughout Q3.
As our business continued to pick up pace with.
With net revenue declining negative 21% in July there.
Negative, 16% in August and ending the quarter at a much improved negative 9% in September as compared to the same months in 2019.
Our better than anticipated third quarter results were driven by gains in both our Townsquare interactive and advertising segments gains, which I am pleased to say are continuing into the fourth quarter.
I have spent the last two calls talking in depth about how townsquare interactive our digital marketing solutions subscription business.
Has outperformed during this crisis and its recession resistant qualities.
Today I'll keep my highlights on Townsquare interactive brief.
Let the impressively strong results of this recurring subscription business speak for itself.
As a tremendous resource for our local clients Townsquare interactive has delivered revenue profit and subscriber growth throughout the pandemic and Q3 was no different.
Third quarter net revenue increase plus 14.5% over prior year and improvement from Q2's net revenue increase of plus 10.5%.
In addition, Townsquare interactive added approximately 1150 net subscribers in Q3.
Ending the quarter with approximately 21900 net subscribers.
The 10th consecutive quarter of 850 or more net subscriber adds and the most quarterly net subscriber adds in nearly six years.
Let me repeat that in the middle of a pandemic, we added more quarterly net subscribers than any quarter since 2015.
Amazing.
Our Q3 net revenue for Townsquare Interactive was 18.2 million and based on our current subscriber base Townsquare Interactive is run rate annual net revenue is over 79 million as of the end of Q3.
And therefore, I am confident and reaffirming our expectation of Townsquare interactive achieving 100 million in annual net revenue within two to three years.
In addition, Telx way interactive.
Continues to generate healthy profit margins with Q3 margin to 30.2%.
Translating to 5.5 million a profit in the third quarter.
And over 15 million a profit in the first nine months of 2020.
Looking to Q4, I expect Townsquare interactive Q4 revenue growth to improve from Q3's 18.2 million, which was an increase of 2.3 million in Q3 2020 compared to Q3 2019.
So over 18.8 million, which would be an increase of over 2.7 million in Q4, 2020, compared to Q4, 2019, and thus plus 17% growth in Q4 year over year.
Given the pace of approximately 850 net subscriber adds per quarter, we expect to reach 30000 subscribers and approximately 29 months or less.
When we reach 30000 subscribers, we expect our run rate net revenue at that point would be roughly a 110 million on an annualized basis.
This also reinforces our expectation that Townsquare interactive will reach 100 million in annual net revenue with approximately a 30% profit margin within two to three years.
In total our third quarter digital revenue increased plus 7% over the prior year period.
And digital revenue accounted for 44% of our total net revenue.
We believe this serves as a clear differentiator between town square and others in local media.
Townsquares digital assets feed our digital audience to our websites and apps, our video social mobile and programmatic advertising solutions.
Or our robust subscription digital marketing services.
And our ability to generate digital revenue.
Proves out the fact.
That although we are proud of our roots and DNA in radio talent.
Townsquare is not limited to being just a radio.
Our audio company, but rather at this point, Ken and quite honestly should be classified as a premier local media and digital marketing solutions company.
We believe our diversification has enabled us to rebound more quickly than others in the radio broadcast industry from the COVID-19 pandemic downturn.
Our advertising segment, which is composed of both our broadcast and digital advertising solutions also.
Also improved greatly as its revenue decline improved to negative 17% year over year in Q3, a 20 point improvement from Q twos year over year decline of negative 38%.
Our improvement was broad based across the segment.
Broadcast advertising revenue improving from its low of negative 52% year over year in April.
Negative 45% in Q2.
And finally improved to negative 23% in Q3.
Ending the quarter with revenue declines of only negative 14% in September.
Broadcast revenue improvement was driven by new local business generation in.
And improvement in National revenue, which is a very small part of our business. Yet was one of the hardest hit revenue streams during the downturn with national broadcast revenue down negative 65% in the month of may as compared to the prior year.
And of course, strengthen political which I'll touch on in a few minutes.
Digital advertising revenue, which has been more resilient than broadcast advertising revenue throughout the pandemic given the strength of our digital online audience and their engagement actually increased in the third quarter as compared to the prior year.
Something we are incredibly proud of.
Amped revenue, which is advertising revenue associated with our owned and operated local websites.
Increased an impressive plus 9% in the third quarter compared to the prior year period.
This revenue growth.
It was supported by the popularity of our local web sites as more and more people engaged with our brands online to obtain information specific to their local community.
With an average of 34 million people coming to our local websites each month during the third quarter.
I've been incredibly plus 84% versus Q3 of 2019.
As we have highlighted on previous earnings calls.
As local newspapers and local TV stations have reduced their coverage and investment in local news and our size markets.
The resulting coverage for the 67 cities that we serve locally has greatly diminished over the past five to 10 years.
Townsquare has through our websites and mobile apps stepped in to fill that void.
Rich the COVID-19 pandemic has magnified.
As a result, we're not only experiencing an all time record number of people visiting our web sites this year, but.
But we are also experienced hitting all time record level of engagement.
More visits per month more article Reds per visit et cetera, which is one of the numerous reasons why our digital advertising solutions are performing so strongly as more people than ever engage with our brands online to obtain information specific to their local community.
To that point.
As I highlighted on our last call group.
Google provided townsquare, a $260000 grant for the creation of two news outlets, serving the great cities of Tuscaloosa, Alabama, and Portsmouth, New Hampshire.
We launched the Tuscaloosa thread in early August.
In its first month reached over 93000 unique visitors incredible.
And in Portsmouth, New Hampshire market in partnership with Google, We have recently launched the sea coast current brands Www Dot Cecos current dot com.
One of the many silver linings of the pandemic has been the clear evidence that our local brands that are 67 markets our beloved by their communities and are where the local audience turns to be informed and entertains across our broadcast and digital platforms.
Townsquare ignite.
Our proprietary in house technology platform and digital programmatic offering.
Increased revenue, a very strong plus 10% in the third quarter and plus 7.5% for the first nine months of 2020 compared to the same periods of 2019.
Making townsquare ignite our fastest growing advertising solution for both periods.
We believe that ignite will continue to be among our fastest growing advertising solutions for the next several years and remain confident in our estimate that tells Greg Nice annual advertising revenue will reach 100 million in the next two to three years.
Touching now on political.
Suffice it to say like.
Like Drake political revenue has been on fire this year.
In the third quarter political revenue was 4.5 million more than three times, what we booked in Q3 2016 during the previous presidential election cycle.
Based on what is currently on the books today.
We expect 2020 political revenue to be approximately 16 million.
Which is roughly 75% more than we booked in all of 2016.
Improvement in our advertising business has continued thus far in Q4.
In part due to the strength of political.
The strength of digital.
As well as the strength in new advertising business.
In fact.
October was our strongest new advertising business month of the year.
Defined as business from an advertiser, excluding political that is not advertise with town square in the last 13 months.
And although the political surge is now behind us our current forecast points. The Q4 advertising revenue improving over Q3 with and without political revenue.
Given our expectation of continued strong rebound in broadcast and impressive year over year growth in digital advertising in Q4.
The last point I want to touch on briefly before handling the call over to Stu is a very important one.
And that is to highlight our strong cash generation ability and liquidity position.
In the third quarter cash flow provided by continuing operations was positive 12 million.
And positive $24 million in the first nine months of 2020.
And that is after making approximately $17 million of cash interest payments in 2020.
We ended the quarter.
With $79 million of cash on the balance sheet.
And we also have access to our $50 million Undrawn revolver.
And our business has recovered to the point.
That we are not concerned about our liquidity.
And the ability to meet our cash obligations going forward given current market circumstances looking.
Looking forward.
If there were to be another way to state shutdowns and a subsequent further downturn in advertising revenue. We are confident that we would be able to manage through it efficiently and effectively as we have done to date.
And come out on the other side of this pandemic.
Even further differentiated from our local media competitors.
I Trust that I have provided a very thorough in depth perspective on not only Q3 results, but also what we are currently expecting in Q4.
As you would expect we will not be providing formal guidance for the fourth quarter, given the COVID-19 pandemic.
That said our goal in Q4 is to improve net revenue.
From negative 15% decline in Q3.
To half that were negative 7.5% decline in Q4 as compared to last year.
And we are confident we.
We can achieve that given our talented team the.
The strength and continued growth of Townsquare interactive subscriber base.
And continued improvement in our broadcast and digital advertising revenue.
As well as the strength of political net revenue.
Which we estimate will be approximately $9 million in Q4.
As was the case in Q2 in Q3.
Where we had no material event revenue.
We expect the same in Q4.
And we're comping against $2 million in live event revenue in Q4 2019.
We also expect to continue to see sequential improvement in adjusted EBITDA as we begin to approach prior year profit levels and expect to build cash once again in the fourth quarter.
With that I'll turn the call over to Stu.
Who is going to discuss our financial results in much greater detail take it away still.
Thank you Bill and good morning, everyone. As a reminder, in 2019, we sold our bridal Exposition live events. So our year to date 2019 results and year to date 2020 growth rates are presented pro forma for the sale of these events unless otherwise stated please refer to the tables included in our earnings release, which provide GAAP results and pro.
Former results as well as our non-GAAP performance measures as Bill mentioned, our third quarter financial results exceeded our original expectations as the performance of our advertising and Townsquare interactive segments improved throughout the quarter and political revenue reached new Heights.
In total third quarter net revenue decreased 15.3% over the prior year period to $95.3 million and third quarter adjusted EBITDA decreased 37.8% to $17.5 million. This is a mark and significant improvement from second quarter revenue and adjusted EBITDA declines of approximately.
35% and 93% respectively.
In the third quarter Townsquare interactive subscription business experienced sequential revenue improvement throughout each month of this quarter. This.
This translated to subscription revenue growth of 14.5% in Q3 and 13.7% in the first nine months of the year compared to the prior year.
In addition, Townsquare interactive continues to generate healthy profit margins with the Q3 margin of 30.2% equally $5.5 million of profit in the third quarter and over $15 million of profit in the first nine months of 2020.
Importantly, and impressively Townsquare interactive booth net revenue and subscribers in each and every month of 2020, demonstrating its resilience as wells as well as its importance to smbs.
The quarter advertising net revenue declined 17.2% as compared to the prior year period, the significant improvement from Q2's decline of 37.5%.
Each month, so a sequential improvement and we ended Q3 with advertising net revenue declining only 10.2% in September compared to that of the prior year period.
Our digital advertising solutions returned to growth in the third quarter led by year over year net revenue growth from our and Townsquare ignite advertising solutions, which increased 9% and 10% in the third quarter.
Yes advertising revenue also improved materially throughout the third quarter narrowing declined from 45% in the second quarter to 23% in the third quarter, each as compared to the prior year periods.
2020 has been a record political year for the company.
Q3, political revenue was $4.5 million as compared to $886000 in the third quarter 2019, and $1.3 million in the third quarter of 2016, the last presidential election year.
We're currently forecasting full year 2000, and twin political revenue to come in at approximately $16 million as compared to 2000 to $93.1 million in 2016 $9 million.
Due to the pandemic, we're still not hosting live events, resulting in third quarter live events net revenue declining nearly 100% versus the prior year.
Fortunately, we pruned and rightsize the live events portfolio in 2018, and 2019 to align with Bill's local first strategy and as a result, our cost basis now in 2020 is largely variable. Thus if we do not host an event, we do not incur many of these expenses there.
Therefore, while third quarter net revenue for live events decreased nearly 100% versus the prior year period.
Direct operating expenses decreased approximately 95% versus the prior year and we were approximately breakeven for the quarter with a loss of approximately $93000.
In the first nine months of 2020 live events net revenue declined 83%.
Evidence direct operating expenses declined 82% compared to the prior year period, which resulted in positive adjusted operating income of $363000.
Given our largely variable expense base in live events, assuming no more events revenue for the remainder of 2020, we expect our live events division to breakeven on an EBITDA basis and cash flow basis for the year, given our strong expense management.
In total third quarter direct operating expenses decreased by 8% compared to the third quarter of 2019. This.
This was driven by the live event expense decreases as well as a 7.6% decrease in advertising direct operating expenses, partially offset by an increase in Townsquare interactive direct operating expenses of 16.7%.
The declines in advertising direct operating expense were driven by our cost reduction efforts enacted earlier this year due to the pandemic and the reduction of various expenses such as sales commissions.
Due to the prepayment we made this year to our bank term loans and bonds as well as lower LIBOR rates interest expense for the third quarter declined approximately 9.8% or $800000 as compared to the prior year period, and 7.5% or $1.9 million in the year to date period.
For the third quarter net income from continuing operations was $1.3 million or three cents per diluted share as compared to net income from continuing operations of $8.5 million or 29 cents per diluted share in the third quarter 2019.
The decrease was primarily due to the decline in net revenue driven by the COVID-19 pandemic.
We'd like to remind you that the provision for income taxes included on the face of the income statement is for GAAP financial statement purposes, only we maintain significant tax attributes, including $191 million of federal and it will carry forwards and other substantial tax shields related to the tax amortization of our intangible assets. We continue to believe that.
I will not be material taxpayer until approximately the year 2026.
In the first nine months of 2020, we generated positive cash flow from continuing operations of approximately $23.8 million and 40.6 million prior to interest payments, thus demonstrating townsquare strong cash flow generation ability and our careful expense management during the pandemic.
As a reminder, following the onset of dependent we enacted a series of cost cuts and cash preservation measures such as eliminating a quarterly dividend and limiting capital expenditures to only those.
Projects that are essential.
In the third quarter, Capex declined $2.7 million or 48%.
$3.3 million and 23% in the first nine months of the year compared to the prior year period.
We ended the quarter with $79.1 million of cash on our balance sheet. This is reduction of less than $6 million. Since December 30, Onest 2019, despite reducing long term debt by $14.7 million, making a $4.2 million payment for dividends prior to us eliminated dividends and making 16.
Point $8 million of interest expense payments.
In the near term, we anticipate holding cash on the balance sheet in order to continue to preserve flexibility during the pandemic. However, a long term goal remains the same to reduce net leverage to four times, which we had been on track to achieve by the end of 2020 prior to the impact of this pandemic.
At current market conditions, given the strength of our cash generation abilities and the recovery we've experienced.
In our revenue year to date, we believe we have ample liquidity to operate our business for the foreseeable future and with that I will now turn the call back over to Bill.
Thanks, Stu and thank you everyone, who dialed in this morning.
2020 has been a challenging year, but one of the things. Our team has noted with great Pride does that even with all of the challenges during the pandemic, we did not need to alter our core strategy rather the pandemic has allowed us to separate from our local media peers by executing our existing strategy and placing a spotlight on the resulting success.
Yes.
Our focus on underserved small and medium sized local markets, our investment and commitment to local first and our investment in world class personnel technology and infrastructure that allowed us to build a strong digital platform with best of breed products services and solutions.
Including a recurring digital subscription business.
Which together brings digital revenue to 44% of our total revenue.
All of this contributed to our ability to mitigate revenue declines and managed quite effectively through this downturn.
We want to ensure all of our stakeholders that we will continue to carefully manage through this crisis. However, long it may last and whatever turns it may take.
As we have stated on earlier calls our goal has been to balance cost reductions with our opportunity for long term growth.
We want to be best positioned to emerge from this downturn more quickly and more efficiently than our competitors and we believe that this strategy together with our diversified and differentiated in house proprietary product offering ensures that we will be.
This call was a bit shorter than our last two calls.
And that is because we wanted our Q3 results.
Speak for themselves and we hope you agree that they do however, we are always available to further discuss our great company. So please do not hesitate to reach out and call us.
B, well and as we say internally stay townsquare strong.
And with that operator, please open the calls for any questions.
Thank you at this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad a confirmation.
I mentioned total indicate your line is in the question queue.
You mean prestart queue, if you'd like to remove your question from the Kim.
I just meant using speaker equipment, it may be necessary to pick up your handset before pressing this dark.
Our first question comes from the line of Michael Kupinski with Noble capital markets. Please proceed with your question.
Thank you and congratulations on your impressive quarter.
Just a couple of questions in terms of your cost reduction of your previous cost reduction how much of those were permanent and how much do you ask.
As we think about Q4, how much of those operating expenses are going to flow through Q4.
Maybe just give us some color on what your thoughts are on Opex.
Sure Hey, Michael Good morning, It's Bill I'll have a stool step in and take that question for you.
Hey, Michael how are you.
Great you know the majority of our.
Majority of the cost reductions are going to be permanent.
We will add back sales folks and investment in our digital products as time goes by and when we feel comfortable with the pandemic is in our rearview mirror, we think that we'll probably bring back the four one k. match, but things like the dividend and all the permanent head staff reductions that we made that we feel.
Make us a stronger company, we're not going to bring back.
Gotcha and in terms of Ts side really impressive there how many of those.
Subscribers are in market to your stations versus out of market and how does that compare to maybe the year earlier results.
Yes, Michael its bill again, so thank you for the recognized recognition of the Townsquare interactive strength throughout the pandemic and quite honestly year after year.
In terms of subscriber growth given the size of our inside sales team in Charlotte.
Each quarter, we are adding more out of radio market clients that radio market clients.
Approaching 60, 40, 60% outside our markets, 40% in our markets, but it hasn't hit that threshold, yet I think its like 57% to be exact outside of our markets, but on a quarterly basis, adding more and more outside of our markets, which we expect on prior calls as you may recall, Mike we talked about the addressable market.
What we call the perfect Smbs that meet our profile of under $5 million of revenue under 24 employees population size 1.5 million or less there's 500 those smbs in our radio markets are 67 radio markets, There's 8 million of those outside of our radio markets that fit the criteria.
That I just described so our expectation is as we approach that 30000 subscriber base, we talked about on the call and over 100 million in annual revenue, we'll be adding more out of market CSRI subscribers that end market.
And bill that subscriber growth is it's really extraordinary and I was just wondering is there any particular differences with the new subscribers added like such as the business side. The number of locations of businesses or I mean are we seeing you know.
Or is it very similar to what we the types of businesses that you had before it's.
It's very similar to the types of businesses before you know obviously, we've had the benefit of.
Really started this business organically in 2012 learned a lot for many years and really I'd say perfected may be too stronger word, but really understand the SMB and what we can provide through townsquare interactive and and really the ideal customer set so they havent changed quite.
Quite at all and as we talked about during the pandemic I think not only our company, but if you look at other companies like wix or other other publicly traded companies in this space.
Theyve really done well because the pandemic is showing the value and importance of having a strong digital marketing.
Presence and that's why Townsquare interactive is performing so well I think it's a our talented team and b, it's more clear than ever the need for this service and when you think about the scale. We can provide at an average price point of only $300 per month and us to be able to essent guaranty traffic to a smbs website.
As a quite valuable value value proposition. So we're really moderating investment in Townsquare interactive just to keep the margins at 30%.
I annualize that that's what we target and we moderate that investment. It's due just said in salespeople and customer service people.
Obtain that but the opportunity is vast at one point, we could accelerate that investment we're not going to do that during this pandemic, but I think on prior public earnings calls, we talked about a second location out west which post pandemic are still very much part of our plans.
Got you and last question in terms of the sequential improvement in advertising can you give us a sense of maybe the categories that you're seeing strength.
You know I understand that some are saying financial services are showing some proof strike what are you seeing in terms of what's driving the sequential improvement in advertising.
Yes, one of the things I'm most proud of from up from the team perspective, as I talked about on the last call. The team has adapted.
Quite remarkably throughout the company in terms of the daily challenges and obviously as we were facing significant advertiser translates into March and April May and then you look at I'll start with the negatives for for Q3 entertainment and travel and auto and food, particularly instrument chamber traveler auto and food, but those categories.
Really are categories that we've done quite well so our account executives throughout our 67 markets had to really prospect and reach out to industries and categories that may not have been categories that we excel that in the past and that's why one of the things I'm. Most proud of is the new business generation, you're getting close.
Science to advertise with US who who are new advertisers to our platform is quite important obviously as as you've got no events and you've got restricted traveling all of those things. So to answer your question on what we saw strength was in insurance healthcare recruiting education.
And education for example in health care are typically our largest categories and through the pandemic goes a bit our fastest growing categories.
Great. Thank you so much congratulations thank you Michael state well.
Thank you. Our next question comes from the line of Jim Goss with Barrington Research. Please proceed with your question.
Thanks, and good morning.
No doubt, you're aware that as Rob and preparing for this call.
The Big news is that the Pfizer vaccine was determined to be more than 90% effect there.
On a par with measles and smallpox without major side effects.
Which is a.
The game changer.
And so I have a number of questions with you for you with regard to that.
First will.
You just mentioned that 300 seller amongst great failure.
Is there a pricing flexibility with Ts I.
Well, what do you think the impact could be on each one of your business operations.
As.
Thus the prospect of vaccine and probably multiple vaccines would be more of a reality and how would your strategy be of adjusted and how quickly is any of this.
Likely to occur.
Yes.
Sounds like a plant and thank you good morning glad to hear your voice I'm glad to hear you're well, yeah, obviously exciting news for not only our country, but the world with Pfizer announcing earlier. This morning that their vaccine is as you just noted 90% effective which is in line with measles and other vaccine. So.
Quite great news for everybody.
On a personal level, including the economy, and our and our business how quickly that is going to be distributed in that.
In that release, they expected review by the end of the month of November and possible distribution in the first quarter. So I don't know when it will be distributed but I would expect distribution of this vaccine or quite honestly I believe there'll be many others in the first half of 2021.
We have as you know moderated our expense reductions to make sure that we can capitalize on long term growth prospects. So although it was hard to do we did limit that the full time reduction workforce, 6% in early April.
Which although was hard decisions was moderate in the scope of what we are facing and Thats why our EBITDA in Q2 was roughly 2 million and we're glad to see that bounce back so strongly in Q3 and weve seen sequential improvement across our revenue lines every single month, not only quarter to quarter, but literally every single month, we had broadcast digital advertising.
Beat ignite and everything we touched on so our expectation is whenever a vaccine does get widely distributed and assuming obviously people take it we will return back to our 2019 growth levels, which as you may recall work.
High single digit revenue growth approaching double digit and double digit EBITDA growth. So thats, what our expectation is post a vaccine and a post coded world and we believe regardless of how long this pandemic last and whatever.
Turns it may take if there is incremental cases spiking as we've seen over the last four weeks, what cases, increasing and in certain markets hospitalizations, increasing we actually haven't seen those spikes lessen our recovery.
Month to month.
Which I think is a testament to our team's adaptability roads answering Michael's question and being more I think prepared if things do change, but as it relates to a vaccine and what that means for our business. We clearly expect to return to 2019 growth levels for revenue and profit and as I mentioned earlier are things that we put on hold like a.
Second location for Townsquare interactive out West, we would quickly ramp that up and therefore accelerate.
That business is March to 100 million in revenue at a 30% profit margin I know you got other questions. Jim So I will turn it back to you.
No no that's great and on.
I'm wondering listener trends tended to be to.
Well bump ups to some extent within home, but then radio tends to be in.
On the car type of a situation I wonder what you how do you how do you expect that to balance out even though radio maybe is less important business as you become more of a digital company and then the live events that have been mothballed.
I imagine they could be restored quickly do.
Do you think it probably start to think about putting some of those numbers back in your model for 2021 with this sort of news that we hoped would come that didnt necessarily now and then.
I guess with the cost cuts.
You and Mike were just discussing the that does.
Seem to build in some better profitability than maybe you have.
Been able to achieve because now you have a better idea of what you really need and what you can do us out and.
Any other enhancement in that question would be good Jeff Allah.
Ill take them and then if I missed any of them just let me know so as it relates to live events. I think you know me well enough that im conservative in terms of our modeling so even with this news I will be modeling I know you don't know mass gatherings of people for 2021 with this news could that be accelerated and we start to do live events next summer.
So the fall I, clearly think thats, a possibility, but as it relates to modeling and forecasting.
Our conservative in that regard so we'll still plan on no live event revenue for 2021, and hopefully we'll have surprises to the upside it given that our live event business. As you know we were thankfully sold our name Carnival business. We sold our music festival business anything that was not core to our local markets and really almost like a brand extension at this point where.
We're getting great brand extension for our local radio stations were great getting great client activation opportunities that said, it's still a very small part of our company. It's less than 20 million in revenue I think last 2019 was roughly 16 million in revenue roughly $3 million of profit. So although important strategically a very very small part of our business.
The Great news is we have a variable workforce and our ability to that as you said ticket from a multiple scenario to actually executing we could do that within 60 days and we have a wonderful extremely talented.
Women, Ashley who runs that for US who has been with us for many many years. So I feel very confident whatever a vaccine is distributed and it's safe to have mass gatherings of people 60 days later, we can be up and running for our live events as it relates to your last point and then I'll circle back to your Listenership question. You are correct I believe as we look at post pandemic beat.
End of 22nd half of 20 be that 21, and 22, our profitability margins will improve for the reasons that that you just touched on and Stu touched on earlier.
Going back to your first question, which is to me one of the most important because in media. If you are a believer that money follows eyeballs, obviously audience is critical so as I shared on the prepared remarks I couldn't be more proud of our online audience and how that has grown so remarkably really year end and year out since we started.
The company and.
We didn't have that and we didnt have digital advertising growth like we did in Q3, and we talked about it not only ignite growth, but growth of our amp product line, which is our owned and operated inventory we wouldn't have digital revenue being 44% of our our company's total but more importantly, we wouldn't be a diversified media company that could weather this downturn.
As we have to date and we will continue to do so so as it relates specifically to listenership I actually think we get the best of both worlds as it relates to this pandemic weak. During this period pandemic, we saw a record number of consumers downloading our mobile apps as well as utilizing our station through home devices.
Like Amazon, Alexa and Google home, which I believe will.
In essence accelerated R&D can change in consumer behavior, which actually served us quite well because as we talked about on prior earnings calls the mobile App. Each station has their own mobile app when you get into an automobile every consumer what they do is they plug it into charger battery and now the car dashboard is controlled by your phone.
And given that all of our apps are integrated with Apple Carplay and Android auto our apps show up on your dashboard not only that they are integrated into the steering wheel and all the controls of your car. So that is incredibly valuable to us with a potential disruption.
Boards in the next couple of decades, so that behavior is greatly benefited to us, but then as you said as people get back to work and are in their car more that has the additional benefit what I would share is we're so blessed not to be in the top 50 cities that's core to our strategy its quarter, our local first strategy, so commuting time and listenership trends even prepared.
Derek as you recall, Jim are quite different for our company. The good news for the broadcast industry from a radio perspective is that number of people listening to radio has been consistent for decades, 93% of Americans listen to radio every single week, what has been quite challenge for the industry is actually time spent listening pretty pandemic as well as through spending.
The good news is listenership levels for Townsquare has been quite stable. The last two years, even though the industry is declining I.
To my core believe that's a combination of our smaller market size, we're radio really matters. Its companionship our on air talent, our social Influencers are now the fabric of the community where people tune in everyday to be inform and entertain which is quite different in my view and large market America. So I think the combination.
One of the two gives us the benefit of accelerating consumer change on our digital footprint as it relates to listeners shipped through apps and smart devices and then to your point people is being either back to work and listening at work or listening more in the car travelling to work gives us really a good.
Wind at our backs as we come through the hopefully the second stage and last stage of this pandemic. So Jim hopefully I answered those questions, but if you want to circle back on any of those or ask any others feel free to.
Now that you have given quite a robust answer and we really appreciate it. Thanks Youre welcome Jim gradual.
Thank you, ladies and gentlemen that concludes our question and answer session I will turn the floor back to Mr. Wilson for any final comments. Thank you operator, and thank you everybody for dialing in this morning, and taking a few minutes of your Monday morning to care about updates for our company as Jim Just said, we're obviously optima.
Optimistic about the news that Pfizer released this morning, but more importantly to you and us is or just as importantly, as we couldn't be more confident in where we're how we're recovering and where we're heading as a company and just want to give or take the opportunity to thank the townsquare team for their tremendous adaptability and ability to conquer our everyday challenges.
And perform as well as we are during this pandemic and just thank the team and be safe B, well and as we say at Townsquare stations Townsquare strong and until next time. Thank you operator.
Thank you. This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation.