Digital Display Networks Has Hands Full w/ 7-Eleven

There has been a lot of Web noise today about the announced 7-Eleven TV network. While republishing the press release is a nice way to get the word out, such "reporting" doesn't get at the heart of what Digital Display Networks, 7-Eleven's digital signage operations partner, faces in partnering with the c-store operator.

7-Eleven has been down this road before; a road that ended in a deep precipice. 7-Eleven didn't fall in, but its partner certainly did. 7-Eleven's first foray into digital signage grew out of the company's partnership with Next Generation Networks (NGN), a once promising media startup that exploded with the Internet bubble. NGN paid a steep price to get into bed with 7-Eleven, agreeing to pay a minimum of $3 million in yearly partnership fees. NGN's contract with 7-Eleven also included a clause that guaranteed the c-store operator a payment of $150,000 if NGN failed to install its network in at least 4,800 7-Eleven stores. Furthermore, 7-Eleven had the right to terminate the partnership agreement with just 30 days notice if NGN didn't meet the 4,800 installed location mark.

It should come as no surprise that NGN failed to meet the required rollout schedule. Buckling under the pressure of high infrastructure costs and exorbitant partnership fees, NGN now lives as a digital signage cautionary tale. The company went from raising $96 million in investment capital and heading toward an IPO to existing in perpetuity as a digital signage punch line.

There's a great article on the old Webpavement blog (NGN E*billboards - What Went Wrong? ) that details NGN's demise. It's a recommended read for everyone in the industry.

7-Eleven didn't put any skin in the game. Any digital signage professional worth his salt will tell you that a retailer must have a vested interest in an in-store network for it to have any chance for success.The Company wrangled NGN, much to its own shortcomings, into a one-sided "partnership." What's to say that 7-Eleven is interested in anything different this time around?

My assumption is that DDN is fronting all of the capital for the network; thus banking its future on 7-Eleven TV. Once again, 7-Eleven is in a position to suck the life from another digital signage startup.

What do you think will happen?

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