ErinMedia, the upstart that's trying to challenge Nielsen Media Research in the TV-ratings business, is in final negotiations to secure a $25 million infusion from a venture capital firm.
Florida real-estate developer Frank Maggio, who owns ErinMedia, last week declined to identify the name of the venture-capital company that is on the verge of making the investment. The potential deal was first reported in the Tampa Bay Business Journal.
Maggio also said that within the next few weeks, he will announce that a second cable operator has agreed to test ReacTV, his interactive gaming network. Bright House Networks in Tampa, Fla., rolled out ReacTV last summer.
Maggio was tight-lipped about the source of his ErinMedia financing.
“I'm not disclosing who the fund is until they want to do it, because they are right now building a consortium, and it's their job to bring in who they want,” he said. “It's not my job, and I don't want to blow their cover.”
But Maggio did say the venture-capital firm would bring in strategic partners to ErinMedia, and would wind up owning “a significant part” of the TV-ratings business.
Maggio also stressed that the $25 million financing isn't final yet.
“I want to be very clear about this: We have not closed this deal yet,” he said. “I don't have the check in my hands yet. We're negotiating.”
ErinMedia, which has an antitrust suit pending against Nielsen, has filed for eight patents relating to its technology to track audience viewership from set-top boxes. It has received six patents so far, the most recent granted Jan. 26, according to Maggio.
ErinMedia would use its $25 million infusion to make improvements to its infrastructure that will enable it to make use of a new patent, which according to Maggio, uses inverse math to determine the demographic profile of a set-top.
ErinMedia will be “working with cable operators with some new software and hardware that's out that allows a headend to literally send a different ad to different set-tops in the same house,” Maggio said.
“Using mathematics, we can say the behavior of this box at this hour leads us to believe that this demographic is there, so send this ad,” he said. “That's a whole new family of applications that Nielsen doesn't have and can't have.”
Maggio said his plan all along, as ReacTV grows, has been to divest his interest in ErinMedia so it can be an independent, pure-play rating company.
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