Monday, June 26, 2017
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Salem Communications – Spreading the Word on the web & beyond

We had the pleasure of speaking with Rick Killingsworth EVP of New Media with Salem Communications. Salem Communications is a company serving the Christian Community. They feature such publications / websites as: The Singing News, Godtube.com, Tangle.Com and much more. They also have a significant radio presence in Christian Talk Radio as well as conservative talk & Christian music as well.

History

Ed Atsinger and Stuart Epperson each owned radio stations. They decided to combine forces 30 years ago to go full steam into Christian broadcasting. Their foundational format was Christian teaching & talk with such personalities as James Dobson and Charles Stanely. They also have Christian music in 11 markets. Their 3rd and most recent format is conservative news talk in selected markets.

The company’s foundation was being a radio company. They are publicly traded on Nasdaq the ticker symbol is : SALM. Rick has been with the company 17 years. In 1992, he started on the radio side of the business leading their National Rep division. Local sellers & radio stations call on local businesses to secure advertising spots. After 7 years working on the radio side of the business, he transitioned to the Internet division. Salem’s Internet Division started small but now has grown to 120 employees. The growth of the company is organic but most of it is acquisition in nature. One of the first acquisitions was Crosswalk.com. At the time, they were scared and betting their careers on it. Fortunately, it turned out to be a great decision. Through many acquisitions they now own 12 national website brands. Most of those are leading in their categories. It’s a pretty significant part of Salem’s overall company picture.

Xulon Press

Rick Killingsworth – VP of new Media Salem Communications starts out with a brief overview of their Self Publishing platform Xulon Press. Xulon Press is their print on demand / self publishing platform. The client sends in a word or pdf document. Xulon does the typesetting, design, and gets it in establishments such as Barnes & Noble and Amazon.com. There are no minium or maxium quantities required. It wouldn’t be uncommon to receive an order for as few as five copies to as many as 1000 or more. Pricing goes down as volume increases. It allows authors to start out small and if a project quickly catches on they have the capacity to ramp up production to meet the needs of the customer. It’s really hard to obtain a publishing deal in the current state of the business. The platform is scalable and grows as your needs change. Rick is currently helping out 3 to 4 days a month with this successful part of the company. In the past one might have had to use vanity press and end up with a huge surplus of unsold copies. With the advent of self-publishing & Xulon Press, this is no longer necessary. They offer a needed service in the world of publishing and we hope it continues to flourish for them.

Godtube & Tangle

One of Salem’s most recent acquisitions was of Godtube.com & Tangle.com. The decision to acquire was primarily based on the growth of video. Rick just read last month there were more views of video on the web than searches for the first time. With that being said, it’s likely to be a very successful business move on the part of Salem. They are really happy it worked out. With their many different web products, they have a solid video strategy. Godtube is the best url to do something like that with. Godtube url was a brand that had grown really quickly, but the business declined rapidly.

This was primarily due to the name change. The library of content and traffic was already there. It made it a great place to jump deep into swimming pool in the video content arena. They are going to put the majority of their short-term emphasis on rebuilding and re-launching Godtube.com & try to restore it to its former glory. They think that Godtube got away from that strategy for a variety of reasons. They feel it was a strategic mistake and that is where most of our emphasis is going to be in restoration of the brand. The long-term strategy for Tangle is still in the processing stages. It’s very much a work in progress with a lot of great minds kicking it around.

Rick has met most of the folks at Tangle & Godtube and they are very competent smart people with good hearts. He just thinks they made a strategic mistake. Rick says “We’ve made lots of mistakes in the last 10 years on the website. What we try to do, is to recognize those mistakes early. Because the internet is so measurable, you can run pretty fast when you are headed in the right direction. We’ve had to reverse some decisions that we’ve made about brands and things like that. We tend to do it in the first 90 days rather than holding on to our idea and riding it too far down the slope if it’s not proving to be wise.”

Godtube & Tangle Expansion

When asked about expansion of the user base for Godtube & Tangle, Rick said “We do but the first rule of thumb is to create a great user experience, where it’s easy to find what you’re looking for, have compelling content, easy to find that compelling content or whatever you are looking for, and easy to use.” They want people to be able to easily upload their video content. Phase 1 will be getting the foundation right and getting ready to promote. Phase 2 will be making sure the reach is as broad as possible. All of the technology tools (api, embedding,etc) and just standard marketing are all a part of their long-term strategy, but the first thing they need to do is to get the product right. They want to create a user-friendly experience. This will ensure the continual growth of both brands.

Acquisitions & Expansion

One of the reasons the acquisitions have been so successful is that most of the companies they have bought were stand- alone companies. They have a lot more scale not only because of Salem‘s backing but because of the existing infrastructure. They have their own managers, legal, and accounting departments already in place. It’s easy for them to leverage their infrastructure to operate more efficiently than a stand- alone organization can. It’s not that they feel they are any smarter it’s just a matter of scale. They have 10 full time sales people that work in internet advertising sales. When they acquire a company, they can just add new sellers rather than having to start from scratch. They can just acquire & plug in the company as a smooth transition. In addition to all of the other factors, business experience certainly helps in the area of acquisitions. They learn something new every day at Salem and usually it’s something significant that makes them say “how did we not realize this before, what an amazing revelation.” They’re currently in rapid expansion mode. The biggest thing Rick is currently doing is out looking for strategic acquisitions. While they will be potentially focused on websites, they’re also looking for other businesses that are strategic fits to their current marketing platform both on radio and online. Xulon press is a great example of that. It’s a business that has doubled in 3 years from the time of the acquisition. Their marketing platform cultivates rapid growth with their acquisitions. They are also turning their attention to businesses in other verticals that make sense because of who they are, but may not necessarily be a direct extension of their current business model. They are closing on one such business that is very synergistic and complementary to their business this week.

Technology Change

One of the greatest challenges they as well as many other businesses face is the pace of technology change. Rick says” “We are morphing ourselves from a radio company , to a radio company that has a digital / internet division, and now looking at ourselves as a media company.” They consider the company to be almost delivery agnostic. Wherever there is Christian content being delivered whether it be facebook, twitter, phones, or computers, they want to have a presence there. They tend to be close followers on the technology front. They are not chasing every single new idea out there, because they don’t have the resources to be successful if they go down that path. One of the things that has made Salem Communications successful as a company is focus and focusing on things they can execute well. Sometimes success in a ministry or company it’s almost as much about what you say no to as it is what you say yes to because it gives you the ability to do what you say yes to really well. When you say no to some things even though they might be opportunities that aren’t necessarily playing to your strengths, etc, then you don’t get distracted. They almost constantly have to reinvent themselves as a company. They tend to let technologies get a little bit of steam behind them before they get involved in them. That’s a very smart strategy as many times there have been technologies that have failed horribly. There’s no good reason to take a chance on something that has yet to mature to the point of being reliable, stable & sustainable. However, when they do get involved in emerging technologies, they do so in a big way.

The loss of CCM Magazine

First of all, we unfortunately are in good company with magazines ceasing print editions.[Soft Break]There was still demand from a consumer standpoint. The problem was the music companies were the majority / lion share of the advertising revenues. You would have had to be living in a cave to not know how much of a struggle the entire music industry has been in ever since things went digital. Even to this day they are constantly reinventing themselves. They pulled back significantly on their marketing dollars. It made the magazine, whose primary revenue stream like most magazines was advertising not subscriptions, impossible to continue. Obviously, before they shut it down you can imagine there were 2 years on the er table trying to save it. It was a valuable product and they are not a company that likes shutting things down. They’re not a company that likes selling things even. They tried everything in their power to keep the magazine alive. It was no longer even close to being financially viable. It was because of the advertising marketplace particularly the music industry.

International

They are focused on potential UK expansion as well as the Spanish market. They believe they can viable expansion options and successful in the long-term. No plans beyond that have been explored at this time. In the early planning stages, they have learned that even though the language is the same, the context & culture can be very different. There are certainly challenges they may face. They can’t take something that is formatted for the US and simply stamp a UK url on it and think that it will be successful. This may be a very successful venture for Salem Communications in the long run. There is tremendous growth opportunity in the international marketplace.

Marketing

The majority of their efforts are on radio and online marketing. The obvious reason for radio is that their strength and foundation is there. They do limited print marketing at this time.

Closing

Salem Communications is certainly a fascinating company that serves the Christian Community with quality products and resources. In closing here are a few of the websites associated with this company:
Crosswalk.com
Godtube.com
Sermonsearch.com
Singingnews.com
Salem.cc

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