Friday, March 31, 2006

Thomson Acquires Convergent

Very quietly, it would seem, but it has happened. How do I know this? Well, I saw this article on I recall seeing the original press release somewhere, but I can't find it now, unfortunately. Oh, and Convergent's web pages, press releases, etc. all say that they're a unit of Technicolor, which is in turn a unit of Thomson. As aka notes:

The deal, which was initiated in November 2005 and closed in January this year without official announcement from either company, represents a major development for the sector, and is further evidence of Thomson's intention to move into the out-of-home video market.

Thomson is understood to have made the acquisition to take advantage of Convergent's advanced technical infrastructure for the electronic distribution of digital content.

According to a Thomson statement released today, Convergent now serves as the "network hub for Technicolor Network Services' North American operations, and is focused on developing new business in the out-of-home advertising (digital signage) segment, and upgrading existing corporate communications (BTV) and interactive distance learning (IDL) networks to digital platforms, while servicing other Thomson and Technicolor businesses".

So if this was a technology acquisition, what does this mean for Convergent's customers, if anything? And didn't they do a lot of business selling Sony hardware and services? What will happen to that? And how will Convergent interact with PRN now (if at all)? Wow, this certainly raises a lot more questions than it answers.

Asda hunts agency to handle in-store TV ad sales

That's the headline from this little article from Brand Republic:

Asda Live has been trialled in Asda's York and Wembley stores since 2004, with advertising space sold by its in-house media team, Asda Media Centre. The supermarket plans to extend the TV network to 250 of its 280 branches.

Asda would not comment on the review nor why it is outsourcing the sales process. The decision will see the retailer working along the same lines as Tesco, which uses outdoor media company JCDecaux to sell space for its Tesco TV network.

Also under consideration is a name change for the network and other projects that might improve a customer's in-store experience.

NewSight preparing to deploy 3,200 screen digital signage network?

That's my takeaway from this press release from hypersonic speaker provider ATC:

American Technology Corporation (ATC) (Nasdaq:ATCO - News), an innovator of proprietary directed sound solutions, today announced it has received a 3,200 unit HSS® order from digital signage provider NewSight Corporation. Under this order, NewSight(TM) has initiated installations of HSS-enabled digital signage displays in select major retail stores; all installations are scheduled for completion before September 30, 2006.

Based in New York, NewSight creates proprietary digital narrowcast media networks that deliver interactive, entertaining and measurable customized advertising content. NewSight offers customized, end-to-end solutions for the creation, distribution and placement of digital signage media networks. NewSight's displays can be placed in nearly any environment for maximum, convenient exposure that directly reach today's mobile consumer.
NewSight, formerly known as X3D Technologies, 4D-Vision GmbH, and/or Opticality Corp, was and is best known for its 3D display technology, which, while deployed in smaller numbers, hasn't made any huge splashes in the retail market (or any other sectors that I'm aware of). Perhaps they got tired of waiting, and have instead decided to go the way that I think IMPART and WirelessRonin are trying to go, and are just building out their own networks. Given how expensive it can be to budget and deploy a digital signage network, they either have a lot of cash sitting around, or are planning to raise some. Or, they have a big customer opportunity that I'm not aware of yet :)

VISI launching Launch LabCorp Health Network

They've been talking about this for a long time now, but might actually start to deploy, at least according to this article:

The LabCorp Health Network (LHN) is a customized channel of healthcare information specifically designed to provide patients using LabCorp's patient service centers a comfortable waiting environment through the delivery of quality commercial, educational, informational and entertainment segments via an internet driven, nationally networked narrowcast system. Presented on large, flat-panel screens installed in LabCorp's Patient Service Centers, LHN provides an opportunity for advertisers and content partners to reach a health conscious audience with known demographic and statistical data

Wednesday, March 29, 2006

In-Store TV Networks = TV Place-Shifting... least according to this article at MediaPost (free reg required). Here's a brief clip:

That's right, TV has entered the final frontier: space. In much the way handheld devices such as Apple's iPod have freed TV programming and advertising from the physical restrains of TV sets, place-based media are bringing them into what may be some of the most relevant spaces. "We've coined the term 'shopper media,'" Spaeth says, noting that it isn't just TV that's invading the supermarket aisles, but also radio and other nonlinear media: digital screens that are Internet-connected, Bluetooth-enabled, and capable of knowing who is in front of them and what they might be interested in at that very moment.

Sounds a bit like a description from one of science fiction writer Philip K. Dick's amazingly prophetic novels, doesn't it? Maybe. But the future is definitely here. It's a far cry from the old world of retail media, known for point-of-purchase display cards, hang tags, and end-aisle displays.

This is not the first time Madison Avenue has been pitched by so-called place-based media networks. In fact, they were wildly popular in the 1990s, when big players ranging from NBC, Turner Broadcasting, and even McDonald's tried and failed to launch a new generation of shopper TV. NBC On-Site failed to get beyond the test stage. Turner's Check-Out Channel folded when supermarket cashiers kept pulling the plug or turning down the volume. Turner also tried and failed to launch a McDonald's Channel. In fact, the only place-based media network launched by a major during that period that is still around is CNN's Airport Network.

Those in-the-know in the digital signage industry are already aware of the big failures of the past, and we've all learned from them. However there still is a great deal of uncertainty around digital signage as a concept which is only going to be reduced as more vendor-neutral data on network success and ROI comes to light.

Friday, March 24, 2006

CBS to run content on checkout channel network

From this CNN article:

In what appears to be a first, CBS has signed up to become a programming partner with SignStorey Inc., a Fairfield, Connecticut-based company that has video screens installed in 1,300 supermarkets nationwide.

Virginia Cargill, the CEO of SignStorey, said CBS will provide 1-2 minutes of programming for each video loop that appears on the in-store monitors. Each loop consists of about 8 minutes, half of which is advertising.

Other companies will provide the rest of the programming, including Meredith Corp., a media company that owns TV stations and a number of magazines including Better Homes & Gardens.

We've seen the major networks experiment with running content on in-store TV screens before, but the difference this time is that CBS will be running the content across multiple networks operated by SignStorey, which to my knowledge is a first. There have been rumors that the other majors are planning similar trials right now, so we'll have to see where that goes.

For another slant on the article, the tech-savvy folks at Slashdot have some differing opinions on whether this is a good thing or not. Makes for some entertaining, and sometimes even insightful reading.

Wednesday, March 22, 2006

Digital signage company Wireless Ronin getting ready for a mini-IPO?

Mini-IPO is how several articles are describing what digital signage software firm Wireless Ronin is trying to accomplish. Their goal -- about $16.5M from an offering on the public market -- is tiny compared to the amounts normally raised in an IPO. But given the company's small size, even this amount seems like it would be far too much to me.

Granted, this isn't the first time that the company has tried to do this, and they in fact have a history of coming up with unique ways to raise working capital. But even so... $16.5M? Let's stop and think about that for a second.

Typically, when a firm goes public, they put about 10% of their outstanding shares on the market. Some do as little as 3-4%, and I've seen some dotcom deals as high as 20%, but the 10-15% range seems to be the sweet spot, especially for smaller-sized deals. If 10% is worth $16.5M, Wireless Ronin has effectively valued themselves at $165M. Yeah, right. Even being exceptionally generous and assuming that investors would be willing to pay 10x 2005's gross revenues (which was hot back in the bubble years), they would had to have done over $16M worth of business last year, and that just doesn't seem very likely.

But ok, this is a much smaller, more specialized deal, and given the firm's history of raising cash, perhaps they're willing to give up a larger number of shares for the cash. So let's throw away our notion of what a "typical" IPO looks like and say that they're giving up 30% for $16.5M. That would still give them a valuation of about $55M, which still seems preposterously high to me.

Or maybe they really need the money, and are giving up 75% of their shares for it. In that case the company would be valued at about $22M. More reasonable, but even that seems like a lot for a small firm that has gone back to the private equity market numerous times to raise operating funds.

Granted, I don't know anything about their financial situation or their customer base, but just looking at the items listed on their website and in the aforementioned articles, I don't see what they have that would be worth that much. I'm not a financial advisor, broker/dealer, or anybody else qualified to give financial or legal advice, but I have been paying attention to this indutry for a while now, and that's my opinion based on years of observation.

So what will they do with that money if they do manage to raise it somehow? Well, they make their own hardware devices, so they might need the cash to build up a big inventory of players for some big customer or deal they're waiting on. But if that were the case, there are easier and better financing options available. More likely, they want to build out their own network a'la Limelight Impart Media. $16M is enough to deploy about 3,000 screens, which is a pretty beefy sized network.

Unfortunately, all we can do is speculate, since the company hasn't even filed with the SEC yet, so there are no documents on file saying what they plan to do. But my money is on the network option... they have their own technology, and they understand the value of owning screen real estate. So the question comes down to this: will they be able to find enough investors in the public markets that believe in their ability to execute?

2006-11-06 UPDATE: There's some new information available about the Wireless Ronin IPO. Read about it at Wireless Ronin updates SEC filings in preparation for going public via IPO

2006-11-30 UPDATE: Wireless Ronin somhow managed to successfully complete their IPO. Thanks again to Dave at sixteen:nine for picking this up!

Friday, March 17, 2006

DIGI award winners announced is carrying this article about the winners of the 2005 DIGI Awards, which recognize "outstanding performance and innovation in the digital-signage industry." In summary:

Ten winners - three each in the fields of technology, innovation and creativity, as well as one "Judge's Choice" award - have been honored with an check for $1000, a trophy, and perhaps most importantly, the bragging rights to the digital-signage industry's only formal accolade. Among the winners, Multimedia LED, now part of Texas-based Billboard Video, was notable for scooping two of this year's awards, each in different categories

More consolidation in Chinese digital signage market

From this BusinessWire article:

Enjoy Media Holdings Limited (OTC:EJYM) announced today that it has signed an agreement to acquire 51% equity interest in Guangzhou Elevator Advertising Limited ("Elevator Advertising") from Guangdong RenRenJianKang Advertising Limited. The acquisition, valued at US$631,640, is to be settled by restricted common shares of Enjoy Media upon further due diligence. Elevator Advertising provides advertisers with more targeted advertising channels located in elevators and lift lobbies of approximately 3,000 buildings in Guangzhou. The acquisition allows Enjoy Media to increase its media offerings to advertisers and bring even greater value to them.

Elevator Advertising, a private company based in Guangzhou, China, installs, manages and operates more than 6,000 advertisement billboards in approximately 3,000 commercial and residential buildings in Guangzhou, the third most populous city in China. It has signed contracts ranging from 5-10 years in the management of advertisement billboards in the elevators of these buildings. The billboards carry advertisements alongside public notice messages from government departments. It will continue to expand both the number of buildings and its advertiser base. Its clients include some well-known consumer brands such as Haier, China Life Insurance, Panasonic, Dettol, as well as consumer banking services.

RMS to install digital signage network in Mattress Firm

From this clickpress article:

Mattress Firm signed a five-year agreement with Fort Lauderdale-based RMS Networks to produce, distribute and manage all content for its new in-store television network. The show called “Firm Network” will run nationwide. Customers will see and hear custom programming on how to select the right mattress, special promotions currently being offered, Mattress Firms’ price and comfort guarantees, or the company’s same day Red Carpet Delivery Service.

Steve Stanger, Mattress Firm’s COO, says the new in-store television network will also be used to enhance communications with store associates. With stores in 22 different markets around the country, the new TV network will enable Mattress Firm management to speak directly with associates through videotaped communication pieces that play before store hours, says Stanger.
Particlularly interesting to me is this paragraph:
Panasonic Corporate Systems Co. is supplying equipment including 42-inch plasma displays for the Firm Network. Through an affiliate, Panasonic will also provide Mattress Firm with financing for the ongoing maintenance of the network equipment over the five-year period.
I wouldn't be surprised if we started to see more of this kind of deal taking place in the future. Considering the large capital expenditures needed to get a digital signage network started (especially if you have 300+ stores, as in the case of Mattress Firm), the plasma manufacturers are in the ideal position to finance the cost of the entire deal, since their devices are typically the most expensive line item on the installation bill.

Tuesday, March 14, 2006

In-store TV ads pay off with sales

I noticed that quite a few news outlets were carrying this article about digital signage, using Target as the latest example of major retailers catching the wave of deploying in-store digital media networks. They note that:

Whether suspended from ceilings or posted at check-out lanes, in-store TV is gaining momentum as a growing number of retailers -- from Wal-Mart to Best Buy -- tap into "narrowcasting," closed-circuit-type networks aired across their chains. These networks broadcast a steady stream of commercials that include weekly specials, product releases and, increasingly, image and brand advertising.

But Target's in-store network is noteworthy because it makes the retailer one of the first to operate and own its system rather than farm it out to a media company, said Bill Collins, a principal at WBC Narrowcasting Group, a Cincinnati-based media consulting firm.

By owning its own network, Target has a greater ability to build its brand image and ensure the marketing is consistent with what it is doing in print, billboards and other channels, Collins said.

Ok, so a lot of people are curious to see what kind of things Target does with its own network. They have the breadth and depth of skill to pull off an amazing feat with custom-branded in-store content supplemented with digital signage-specific advertising, targeted narrowcasts, local information (presumably customizable down to the store/department level), and of course, media provided by partner firms.

But the future looks good, as they finish their article with this statement:
So far, in-store TV seems to be paying off for retailers. [Laura] Davis-Taylor said retailers are finding that products advertised on their networks show an average 10 percent to 20 percent increase in sales compared with normal periods and no advertising.

Industry experts said national retailers typically spend millions of dollars to install and run their in-store TV networks.

I don't know if I qualify as an industry expert, but I do know that many of our retail customers do realize these kinds of lift. Still, I don't know how much of it is due to the digital nature of digital signage, and how much is due to the ability to be sure that the signs have launched and are running. POPAI has shown in numerous studies that an 8-12% lift is attainable with regular pop, but the overall gains are limited by the fact that only 25-30% of displays are ever deployed in some cases.

World digital signage summit is coming to town

Just a straight rip from the from the brief PR blurb:

New ways of targeting consumers, driving sales, product lift and reinforcing brands is the focus of the 2nd Annual World Digital Signage Summit, commencing April 4th, 2006, at Bridgewaters, 11 Fulton Street, atop the Fulton Market Building, New York City.

Digital Signage is one of the most important developments since the Internet and is one of the fastest growing new medias in America. In-store and captive area networks are revolutionizing the way businesses are communicating with their customers. Digital signage or Out of Home Digital is moving to overcome print, radio and television broadcasting in its ability to tailor messages and target elusive consumer graphics.

Among the guest speakers to be in attendance include Clifford Marks, President, Sales and Marketing, National CineMedia, Charlie Nooney, CEO, Premier Retail Networks (PRN) and Bob Clarke, Founder and CEO, Instrumental Media Group (CGEN China) among other international business leaders.

The World Digital Signage Summit is produced by Strategy Institute, an independent North American, research-based organization that monitors and communicates changes and trends to industry leaders.

The Economist notices the "signs of the times"

The Economist is running an article about digital signage, and impacts (both positive and negative) that this technology can have on consumers. While there isn't actually anything terribly new in the article itself, the interesting part is that they're running it at all. Their take on things:

While advertisers warm to the idea, however, digital signage still has hurdles to overcome—so traditional television advertising is not obsolete just yet. For a start, the cost of installing and running a network means that retailers—a notoriously parsimonious bunch—must be convinced of the business case before going ahead with a chain-wide roll-out. Another problem, says Nikki Baird of Forrester, a consultancy, is the “store-multiplier effect”. Implementing any kind of new technology across thousands of stores in a retail chain quickly becomes very expensive. The expense of creating and managing fresh and effective content also poses a barrier to entry, she notes.

But for some advertisers, at least, digital signage is already taking its place in the media mix. Its ability to reach customers as they shop gives it an edge over traditional forms of advertising, such as television, radio and billboards. Ms Baird predicts further pilot schemes and the development of industry standards this year; 2007, she says, will be the year when digital signage really takes off. Those in the retail and advertising industries will be watching the new technology closely. They will be hoping that shoppers will do the same.

If you'd like to read the article and you don't have a subscription to the magazine, go to and choose the "view commercial for 1 day of premium content" button. After the commercial is finished, you can either re-click the article link above, or do a search for "digital signage."

Tuesday, March 07, 2006

Northern Sky Research predicts string growth for satellite-powered digital signage

From this posting at BusinessWire:

Northern Sky Research (NSR) today released its newest market survey and forecast report: Digital Media Distribution via Satellite - Assessing the Market for Digital Signage, Interactive Distance Learning and Digital Cinema. The report provides an in-depth analysis of demand trends for each digital media via satellite application in three core regions of the globe.

The report concludes that from an estimated $287.9 million in revenues in 2006, the market is expected to reach $672.8 million in 2010, at a compound annual growth rate (CAGR) of 18.5%. Revenue growth will be driven by both strong legacy system equipment upgrades and new IP-based enabled digital media services. An increasing volume of opportunities in digital signage, IDL and corporate communications is also developing due to a strong trend in richer and more diversified content for the enterprise.

The corporate business satellite network is evolving towards a full use suite that not only serves to train and communicate with staff but also to enrich the customer shopping experience. The retail segment will be a vital source of near-term revenues and will offer a strong and potentially large end user market for digital signage and IDL vendors and service providers. Digital signage will realize its potential over the forecast period with double-digit growth expected and through large deployments planned in retail, automotive and financial services.

In typical PR fashion there isn't a lot of info there (where on earth did they get that CAGR figure?), but there is a bit more on this page, including the obligatory industry growth chart. The major focus is on satellite distribution, but obviously the information can be extrapolated to terrestrial delivery networks as well. In fact, given how cheap commercial broadband has become, and how plentiful bandwidth is these days, if anything I'd expect terrestrial network growth to outpace that of satellite in the coming years.

Wednesday, March 01, 2006

Captivate boasts 2,000,000 digital signs?! [UPDATED]

If true, I think this network (now owned by media/satellite giant Hughes) trumps all other digital signage networks combined:

BURGEONING PLACE-BASED MEDIA NETWORK CAPTIVATE has reached a major milestone, surpassing 2 million screens in the elevators of U.S. office buildings, and beating the business audience reach of a major newspapers like The Wall Street Journal.

"Captivate is all about reaching business people during a time of day when most traditional media has had a hard time reaching them," boasted Captivate CEO and President Mike DiFranza, adding that it has long been the digital media network's goal to best the audiences reach of Dow Jones & Co.'s Wall Street Journal. The move is more than just symbolic, he said, but means Captivate now delivers more business professionals, and reaches them when they are at work and between office destinations.

Wow. 2,000,000 screens is a HUGE number. I've already called to ask if they can verify, but no work back just yet :)

UPDATE: I just got an email from John Bigay (in PR) at Captivate. He says:"Unfortunately that was a misprint on the part of Media Post. We announced that we have over 2 million daily viewers, not 2 million screens."

That clears things up for me :)

It's official, TescoTV is struggling

After some earlier reports that Tesco TV might be having some trouble filling out its aftertising slots comes this story at The Retail Bulletin, claiming that:

“There have been delays [in Tesco TV's rollout] for several reasons,” [according to] Spencer Berwin, Group Sales Director for Tesco TV at JC Decaux. “It’s not so much that things have gone wrong as that they could have gone better. I think the content could be improved and there is also a question of whether we have the best location for the screens in-store.”

The original layout of screens ignored the kiosk and checkout areas, Berwin added. As this is the place in which customers spend the most time standing still, Berwin believes it might be a fruitful area for future screens, but until this has been thoroughly examined, there won’t be any new installations. “We have to be absolutely totally confident on the return of investment, hence the delay,” he said.

Berwin said he still believes that the general trend in retailing is towards more screens and that eventually every type of Tesco store will “probably have at least one screen.” He also added that at least two other major UK supermarkets are currently piloting TV projects. But Jenny Sacre in the Tesco press office was less optimistic.

Although she insisted that Tesco still plan to increase the number of screens eventually once they have conducted even more research into how the service could be improved, she added that the information-gathering process could take some time yet.
So there you have it, at least until the next article saying that things are moving along swimmingly, and the rest of the network is being deployed. In reality, this would be a great opportunity for two companies with a significant investment in this media to do some research as to what works, what doesn't, and release the definitive guide on the subject. That would certainly be a boon for JCDecaux, considering that they have the potential to become the dominant digital signage network provider in Europe, though I could see Tesco having some problems releasing any information that could give customers a competitive advantage.