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Television Everywhere

Before CBS debuts the highly anticipated James Woods legal drama, Shark, a select group of viewers will get a sneak peek at the pilot episode. They are not TV critics or network insiders, but rather passengers on long-haul American Airlines flights. This fall, as part of a deal to provide in-flight entertainment on 30,000 American flights per month, CBS will, for the first time, screen full-length episodes of new shows before their TV premiere.

CBS’ airline service, called Eye on American, is just one way the network is marketing to viewers away from their TV sets. The network also delivers program clips to Royal Caribbean cruise ships, supermarket checkout lines and even auto-service-center waiting rooms. “We’re looking for places we can be intrusive and exclusive,” says President of Marketing George Schweitzer. “You can’t turn us off, and we don’t share the space with any of our entertainment competitors.”

At a time when TV networks and advertisers alike are desperate to increase—or at least maintain—market share, reaching viewers in new places has never been more urgent. At home, audiences are distracted by the Internet, video-on-demand and DVRs, but in certain public spots—airports, elevators, gas stations—the audience is quite captive. Some of the last vestiges of TV-free space are vanishing as marketers recognize the value of the consumer’s inability to turn away or tune out.

Technology has made it easier and more affordable to reach audiences on the go, with cheaper flat-panel TVs hitting the market and wireless networks enabling networks to update frequently and localize content down to a ZIP code. And, as viewers themselves become more accustomed to watching TV on portable devices, such offerings are accepted as welcome distractions from the monotony of food shopping or pumping gas.

These “out-of-home networks,” or “place-based media,” work efficiently because of the absence of competing messages and the accessibility of viewers. CBS calls such placements the “outernet.”

Other networks and stations too are aggressively targeting the space. NBC pipes its programs into United Airlines flights and movie theaters, among other venues, and this fall will screen new comedy 20 Good Years and football drama Friday Night Lights on selected United flights. In Atlanta, Cox-owned powerhouse ABC affiliate WSB provides short newscasts for The Rail Network, a TV service on subways, while rival Meredith-owned CBS station WGCL supplies news and weather to Transit TV, a competitor on public buses. Cable news giant CNN operates a mini news network in 42 airports at gates and newsstands.

TV networks and stations typically produce programming clips or shortened newscasts. In return, they usually receive a cut of ad sales or promotional time. A third-party distributor aggregates the programming and installs the technology at the locations.

The host, usually a retail store, receives the service at no cost and is given inventory of promotional spots to plug its own goods and services. In such arrangements, the third party—for instance, rapidly expanding Gas Station TV—takes the biggest share of revenue.

Driven by new technology and advertisers’ desire to stand out, the out-of-home TV sector is flourishing. By 2011, 90% of retailers are expected to have in-store digital screens, according to market-research firm Frost & Sullivan. Advertising opportunities are promising. In five years, Frost & Sullivan estimates, such systems are expected to produce $3.7 billion in ad revenue, up from $102.5 million in 2004. While that pales next to the $60 billion spent each year on traditional TV advertising, place-based media offer a chance to develop new money in an industry where ad spending is on the decline.

Advertisers’ Opportunity

New deals are announced almost weekly. One recent pact between ABC stations and Gas TV exploits drivers’ dead time at the pumps. In Dallas-Ft. Worth, Belo Corp.’s WFAA provides news and weather clips to Gas TV at five of Wal-Mart’s Morgan Murphy stations, and the ABC affiliate is also negotiating for opportunities to sell ads or sponsorships. Says WFAA VP of Strategic Alliances Dave Muscari, “Gas TV built it and put in the hardware, but our local news and weather has great value.”

Advertisers too are embracing out-of-home networks for grabbing eyeballs and pushing particular products, says Brad Adgate, senior VP of media-buying firm Horizon Media. “The Airport Network offers upscale viewers, supermarkets lend themselves to packaged goods, and gas stations are retail outlets,” he says. “Advertisers can get very close to the point of purchase.”

Aiming to make their own cash registers ring, a growing number of retailers are jumping in. Across the country, supermarkets are rigging up flat-screens in checkout lines and shopping aisles hawking in-store specials, among other things. Kroger plans to have its 2,500 stores wired by early next year. Two companies—PTI Media and Gas TV—are building networks for gas stations. The next wave of venues involves drugstores, including New York City chain Duane Reade, doctor’s offices and hair salons.

These are not the first efforts to mine the out-of-home audience. In 1992, when CNN launched its Airport Network, Turner Broadcasting founder Ted Turner also developed a network for supermarkets, the Checkout Channel. The objective was to get into about 70% of 32,000 large and midsize stores, but installation proved an overwhelming task, and, where the service did operate, the loud audio irritated customers and store workers. Turner abandoned grocery stores and turned its full attention to airports, which offered higher-end business travelers stuck at gates. “Airports were more strategic and in line with our programming, and we controlled the real estate,” says Dennis Quinn, Turner’s executive VP of business development.

Consumer Complaints

Other companies couldn’t make the numbers. Another pioneer, former Esquire magazine owner Chris Whittle, built a place-based media empire in the early 1990s, distributing print and video services in public places. Among its offerings were Medical News Network, a service for doctors’ offices, and Channel One Network, a news service for schools. The company was dismantled when ad revenue did not materialize. Channel One, which produced such stars as Anderson Cooper and Lisa Ling, is now owned by publisher Primedia.

Indeed, one concern is whether people want to be entertained all the time. Some customers complain that in-store networks are annoying, and commuters lament the droning that interrupts their quiet ride home. To varying degrees, networks are sensitive. On Atlanta’s MARTA subways, riders need a radio to tune in to audio on The Rail Network, or they can read the closed captions. But most services let the audio roll freely and, they say, get little complaint.

An indicator that viewers are not bothered, executives say, is their willingness to buy products after seeing related video. Indeed, after hearing in-store messages, 41% of customers said they made unexpected purchases, according to a recent Arbitron study. “We don’t bombard customers,” says Charlie Nooney, president of Technicolor Network Services, the Thomson division that includes Premiere Retail Networks (PRN).

Several companies have thrived, including elevator network Captivate, acquired in 2004 by Gannett Co., and in-store program supplier PRN. Both target customers out of home, but with very different products. Captivate is hyper-focused, delivering quick hits of news, weather and stock updates to people riding elevators in 700 office buildings in 21 markets. CNN and Gannett-owned stations provide some video, but the service is text-heavy. Riders watch for just a few minutes, and information is rapid-fire.

PRN offers a dizzying array of video products, with custom networks for dozens of retailers, including Wal-Mart and Best Buy. PRN takes content from TV networks, including NBC and Fox, and also produces programming in-house. More than 250 million viewers per month see its programming in more than 6,000 stores, according to the company.

“We are not about watching TV in stores but communicating a message,” says Nooney. “People are on the move, making decisions, and you have to provide relevant information.”

At Best Buy, for example, where customers shop for $2,000 high-definition TV sets, PRN provides a high-def network so shoppers can compare the pictures with standard-def sets.

Fueled by Technology

More than anything, technology has fueled the growth of these new efforts. Prices on LCD and plasma sets have come down, enabling retailers to install sharp but inconspicuous monitors throughout a location. Sending programming to those locations is also easier. Using a wireless network, IPTV or satellite delivery, networks can deliver customized content to almost every site and update frequently. For instance, Transit TV, which operates networks on public transportation in five cities, updates every time buses pass the wireless “hot spots” sprinkled through town. Any service partnered with a local station could break in with AMBER Alerts or severe-weather warnings. Networks can localize advertisers’ messages, too. “We’re selling suntan lotion in Florida when we’re selling umbrellas in Minneapolis,” says Nooney.

One challenge for out-of-home networks, however, is measuring their effectiveness. TV-ratings provider Nielsen Media Research does not currently measure out-of-home viewing, although it is developing a portable device that would allow it to capture such data. For now, Nielsen does offer customized surveys asking customers to evaluate the video service in a given location.

Although Nielsen may measure place-based media and television differently, the same metric is used to sell ad time: cost per thousand (CPM). Pricing for many of the large services, including Captivate and PRN, is similar to cable networks’ primetime pricing, and CPMs can run in the $10-$20 range.

Companies also gauge potential audience by foot traffic and time spent at a location. On average, commuters spend 45 minutes on buses and trains, so Transit TV offers hour-long loops refreshed in the mornings and afternoons with 46 minutes of programming and 14 minutes of ads and promotions. The network is signing up station partners—among them, WESH Orlando, Fla., and WGCL Atlanta—to provide news and cable nets for entertainment fare.

Says Transit TV Director of Marketing Robert Bridge, “We’re the last thing people see before they get home and turn on their TVs at night.”