Bokodes - The Future of Barcode Technology

The MIT Media Lab is at it again. The professors and researchers in the illustrious program continue to develop technologies that reimagine how we interact with objects and disseminate information. If Pattie Maes' presentation at TED introducing her group's "Sixth Sense" augmented reality device weren't groundbreaking enough, researchers within the Lab's Camera Culture group have developed next generation barcode technology that is a quantum leap above what we use today.

Bokodes, as they are known, can hold thousands of times more information than traditional 2D tags and can be read by a standard mobile phone camera. The kicker is that they are a fraction of the size of current barcodes.

The tiny labels are just 3 millimeters across -- about the size of the @ symbol on a typical computer keyboard. Yet they can contain far more information than an ordinary barcode: thousands of bits. Currently they require a lens and a built-in LED light source, but future versions could be made reflective, similar to the holographic images now frequently found on credit cards, which would be much cheaper and more unobtrusive.

"We're trying to make it nearly invisible, but at the same time easy to read with a standard camera, even a mobile phone camera," Mohan says.

One of the advantages of the new labels is that unlike today's barcodes, they can be "read" from a distance -- up to a few meters away. In addition, unlike the laser scanners required to read today's labels, these can be read using any standard digital camera, such as those now built in to about a billion cellphones around the world.

Researchers have successfully tested the readability of Bokodes from up to 4 meters away, although theoretically they should work from a distance of 20 meters. As I'm sure your mind is swimming with ideas, the intrepid minds behind Bokodes see a plethora of applications for the new technology. These include:

- Street Mapping Services such as Google Streetview: Shops use Bokodes to provide meta information to the trucks as they drive down the street taking pictures.

Multi-user interaction with a large display in a classroom or conference: The participants use Bokodes with unique identifiers to interact with displays from a distance.

Crowd Gaming in Public Spaces: Participants use Bokodes to control their characters on a shared display from a distance.

Currently, the tags are expensive to produce - around $5 (£3) each. This is, in part, because the early prototypes require a lens and a powered LED. However, the researchers believe the technology could be refined so that tags were reflective and require no power.

"We already have prototypes which are completely passive," said Dr Mohan.

In this form, they could cost around 5 cents each, he added. (via BBC)

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Mobile Response is Driven by Traditional and Emerging Media Platforms

A person's mobile phone can act as a gateway to more engaging experiences. It can seamlessly bridge the gap between what's around us and that which exists in the digital realm.

As a marketing device, a mobile phone is a launching pad to, and link between, different media platforms. It is the connective tissue between a company's advertising both online and off. Using triggers embedded within communication platforms, in the form of shortcodes, QR codes, or augmented reality tags, a mobile phone can be a tool through which a consumer discovers additional layers of content and information.

Recent research from Starcom USA further supports the mobile phone's position within the media world. For a company to ensure that it's advertising messages reach the greatest number of consumers and attain the highest level of effectiveness, it must include the mobile channel within its communication strategy. Mobile enhances other media and amplifies content distribution and consumption.

Working with comScore on its latest round of mobile research, Starcom found 63% of mobile data subscribers are using mobile phones as a way to access ads or offers in other media.

"What's happening is the mobile device is becoming a gateway to further dive into brands or advertising to get more information about products being promoted," said Brandon Starkoff, senior vice president and mobile activation director at Starcom. That can range from billboard ads featuring mobile short codes to in-store promotions to print and TV advertising. (via MediaPost)

A mobile phone can be a key and a door; the instrument necessary to access the path toward a deeper journey and the mode by which one travels. Its flexibility can be pushed to access new boundaries of creativity and engagement. It's a technological innovation that is inherently personal, but one that allows us to access a world open to an infinite number of connections and experiences. The growth of the mobile web and the transition toward a more data-centric mobile experience provide great benefits to consumers. The mobile phone is becoming the universal compass to our lives, while also existing as the link between our physical and virtual worlds.

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Google TV Ads and Visible World Team for Addressable Advertising

Advertisers are increasingly thinking in terms of client segmentation and addressability (which speaks to the growth potential of the digital signage industry). In a push to offer advertisers greater targeting capabilities in their television advertising efforts, Google is enhancing its Google TV Ads platform, an automated auction-based system for buying TV ads by choosing which shows best fit the advertised product or service, by offering its clients a suite of content customization tools from technology firm Visible World.

Visible World's software allows advertisers and media agencies to alter ads by remixing features such as video, graphics, and audio through an automated message optimization engine. Visible World's software also gives advertisers the ability to switch ads based on how they are performing across various demographic groups. The nine-year-old technology company's investors are media industry heavy hitters, including Viacom, Time Warner, and ad conglomerate WPP.



In working with Visible World, companies leveraging Google's TV Ad platform will gain the ability to target real-time offers, products, and creative based on geography, programming, inventory levels, time of day, weather, and other data-driven conditions.

This partnership enables advertisers to use Google TV Ads with Visible World’s automated message optimization engine to deliver the most relevant messages to the target audience. This combination enables advertisers to get the most from their existing creative, while providing differentiation based on program, time and context to drive and measure audience response. For the first time, advertisers will be able to automate multiple creative messages featuring a variety of offers, products and search terms based on the target audience, context differences and media performance data provided by the new online and set-top-box metrics.

"Visible World's services will help advertisers continue to get great value from Google TV Ads. We're excited to work with Visible World so that our advertisers can place even better and more customized ads," said Mike Steib, Google's Director of TV Ads.

"Google TV Ads is bringing a new level of innovation to television and the media buying process. Given our mutual commitment to targeting, flexibility, accountability and measurability, we are thrilled to be partnering with them," says Tara Walpert Levy, President of Visible World. "Advertisers can now create, target, and optimize relevant ads that will generate improved marketing results on Google TV Ads. (via Wall Street Journal)

Can you think of another media industry that Visible World's technology solutions would be perfect for? Perhaps an emerging platform built on the promise of delivering the right message at the right time?

The easy answer here is...the digital signage industry.

Could Google's partnership with Visible World be an indicator that the company is moving ever closer to dipping its toes into the digital signage industry?

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Projection Ninjas Take Digital Out-of-Home Media to the Streets

How would you like to connect your mobile phone to a small-form factor device that allows you to display your photos and videos on any wall or surface at up to 72 inches in size? The days of struggling to follow a movie on a 3" display would be gone. The pocket-sized projector would allow you to transform the media viewing experience on your mobile phone into one that parallels watching multimedia content on a large flat-screen display.

This is the promise of a pico projectior.

The rise of pico projectors, pocket-sized devices that connect to media players and mobile phones allowing for the display of videos and images up to 72 inches in size, is a technological advance that marks a new way of consuming and distributing content. Just beginning to find their way into consumer markets, pico projectors are also starting to be used in advertising campaigns that blend digital out-of-home media and guerrilla street teams.

While guerilla video projections typically measure up to 100 feet in height, and occupy the entire surface face of a building, the medium is being extended to the display of images and videos that more so match the size of flat-screen televisions rather than expansive wall wraps. Whether or not a digital projection campaign includes video, motion graphics, static ads, or dual interactive projections, the format places brands, messages and products anywhere on almost any surface. By integrating the portability and flexibility of pico projectors into this emerging alternative out-of-home media format, companies are able to connect the eye-catching nature of digital wall projections with the high-level of engagement generated through a more personalized viewing experience.

Pico projectors were recently used in a guerrilla marketing campaign for Burger King to promote the fast food chain's tie-up with the Summer blockbuster "Transformers: Revenge of the Fallen." The Media Merchants, the alternative out-of-home media company behind the campaign, calls its pico projector toting street team "Projection Ninjas" because of their stealth integration of digital media into a city's landscape.

Between June 24 and 29, teams of three hit the streets of Montreal, Toronto, Calgary and Vancouver, projecting moving images onto random objects and giving out Burger King coupons in high-traffic areas. Audio was also incorporated as the guerrilla teams carried speakers in their backpacks. This marked the first time pico projectors were used in an advertising campaign (I'm sure we'll see many more).

"Our typical night projection services are portable and temporary, but sometimes we're limited, we can only be on a certain wall," explains Brodie Gunning, partner and director, national properties and revenue programs at TMM. "But if [clients] want to be in front of this particular club, or they want to target this particular demographic, but there's no vehicle access, how do we get there? This medium has allowed us to do that." (via Strategy Magazine)

The cost ranges between $1,000 and $1,400 per team of three per night. TMM has another "Projection Ninjas" campaign lined up in October for an alcohol client.

As micro projector technology advances, so too are manufacturers increasingly looking to integrate the cutting-edge projection devices into mobile phones. Many predict an embedded digital projector to be a common feature amongst future cellphones. International brand vendors, including Nokia, Samsung Electronics and Apple, reportedly all plan to launch handsets with built-in micro projectors by the end of this year, according to sources with Taiwan handset makers.

The market growth of cellphones with built-in micro projectors is sure to boost the number of out-of-home campaigns that leverage stealth video projection. As more and more of these phones hit the market, consumers are sure to see a greater amount of digital projections (up to 72 inches in size) on surfaces from walls to street signs as they are out and about at night. "Projection Ninjas" could be sourced from the community-at-large, with the qualification that they owned a cellphone with a built-in pico projector. Companies could offer these "projection ninjas" to brands based on a pay-for-placement compensation model, allowing them to take advantage of an out-of-home advertising platform powered by the viral promotion of their multimedia content.

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Are Ripple TV and CBS Outernet in Trouble?

DailyDOOH identified both pieces of information as rumors, but, when you consider that Ripple TV and CBS Outernet may be on the brink of failure, it brings up a number of questions. Could the network CBS paid $71 million for in 2005 be headed toward the deadpool? After raising $4 million of venture capital in March of this year, is Ripple TV about to shut off the lights?

CBS Outernet - Grocery TV

I have spent a lot of time over the last week thinking about CBS Outernet and its acquisition of SignStorey almost five years ago. I have been thinking about the transaction because I once imagined the deal would be looked at as a significant turning point for the digital signage industry. While I could see that CBS overpaid for the network back in 2005, I figured the company saw the same potential that I believed could be reaped from a grocery network with top-notch content and a growth strategy backed by a major media conglomerate.

But, the network never improved. If anything, it got worse. I would walk into grocery stores with CBS Outernet's screens hanging from the ceiling, and count the number of patrons who would look, or even just glance, at the displays. Let's just say that I didn't have to count very high. It was always easy to see that the network had very little, if any, advertisers. The screens cycled between promos for CBS shows and quick ads promoting store brand cookies or peanut butter. I always thought to myself that with the resources CBS had they would revamp the network, similar to what Walmart did, and optimize the content and screen size/positioning for the grocery store environment. I'm still waiting.

Could Grocery TV be on the brink of failure? Of course. Considering the costs of managing a network of over 1,500 locations, including technical and management overhead, it's plain to see that without much advertising it is sure to be a drain on CBS. Compared to the billion dollar plus write-offs we've seen financial companies take over the last year, $71 million is a drop in the bucket.

If the story of its downfall is just a rumor, and Grocery TV continues to operate under the CBS Outernet umbrella, it's definitely time to make changes. The entire network needs to be reimagined. This would take a good amount of capital, but without it the network is doomed to fail. Install shelf-edge screens. Optimize content according to integral areas of the store. Match the content to consumer behavior. Don't be afraid to play with different content models. Find out what works. Redesign the layout of the network. Test multi-platform strategies, including mobile coupons and viral marketing efforts. Leverage CBS' resources to make the network great.

Ripple TV

I must admit that I have never seen a Ripple screen out in the wild. I have, however, spoken in length with industry colleagues who were anything but hesitant to attack Ripple's content strategy. There wasn't a positive review in the bunch. That's not saying that they didn't see strong potential in the network, it's just that they thought it had some work to do.

I have followed Ripple TV since the company was founded and believe it to have good growth potential. Unfortunately, if DailyDOOH is right, we'll never see what the company could have become. With the economy as bad as it has been, it's not surprising to hear that networks like Ripple are struggling. But, it would be a shame if the network were to fail. The company has done an admirable job in expanding its footprint, and developing relationships with solid retail partners.

With an installed network of over 650 locations, including Einstein Bros. Bagels, The Coffee Bean, Borders, and Tully's Coffee, Ripple has a good foundation for growth. It needs to increase the relevancy and stickiness of its content. The biggest problem with digital signage networks is that they don't put themselves in the shoes of the consumers who come in contact with their screens. From what I've heard, Ripple's content is fragmented across its displays and acts like little more than filler. With a content mix like that, it's nearly impossible for an advertiser to see value in buying time on the platform.

As long as the lights are still on, Ripple has possibilities. The company needs to deviate from its current strategy and identify every sales opportunity that is out there. Reach out to local newspapers in the communities where Ripple screens are positioned. Partner with these organizations as sources of relevant content and advertising sales support. Change the network's content mix and screen layout. Leverage the best videos and features that the company's content partners have to offer. Edit content to optimize its placement on the network and so that it best connects with the audience in each location.

Engage the community-at-large to send you content to put up on Ripple screens. I'm not promoting blindly airing reams of user-generated content on the company's network, but rather for Ripple to act as a filter for identifying the best UGC content for its screens.

What I Would Do

I would love the opportunity to step inside CBS Outernet and Ripple TV and get my hands dirty making those networks what I know they have the potential to be. As an individual who lives and breathes digital out-of-home media, it's difficult to stand on the sidelines watching networks struggle when you know you could help them. It would take time, money, and hard work, but both CBS Outernet and Ripple TV could turn the corner and become highly successful networks.

I am itching to step inside a network like CBS Outernet or Ripple TV and help create a next generation digital signage company. We have only just begun to scratch the surface of what such an entity could be. Think of a fully integrated cross-platform digital signage company that ties in location-based services, user-generated content, online video networks, interactive technologies, original programming, niche web destinations, etc. Once a digital signage network is able to extend its reach and impact beyond purely existing as a place-based media company, that organization could seize the mantle of reaching consumers wherever they live, work, play, and everywhere in between.

Ripple TV and CBS Outernet need to become 21st century media companies, and think of themselves beyond their core platforms. Partner with niche Internet companies, emerging online production companies, mobile technology providers, and traditional media outlets. Great content is out there, swimming in the abyss that is the Internet. As modern media companies, they need to go out there and find it.

If given the chance, I would challenge the employees of each company to think of themselves, first and foremost, as viewers of their respective networks. They need to honestly answer whether or not they would sit in a coffee shop or stand in a grocery store and watch the content that plays on their networks (not just for a second, a minute, or once a week; but would they be loyal viewers of their network?). Are they entertained, informed, or engaged by the content? Do they draw value from it?

Ultimately, parts of each network need to be taken apart, examined, fixed, improved, and reimagined in order to build Ripple TV and CBS Outernet back up; positioning them to achieve the highest level of success.

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Touch Screen Digital Display with Temporary Pop-Up Buttons

"Physical buttons have the unique ability to provide low attention and vision-free interactions through their intuitive tactile clues."



As our computer interfaces grow sleeker and more streamlined, specifically in the area of multi-touch surfaces and touch screen displays, tactile feedback is sacrificed. While engineers in the field of haptics have used vibrating virtual buttons to create limited tactile feedback, researchers at Carnegie Mellon University have designed a screen system whereby hidden latex air bubbles can be activated to provide physical buttons when needed. There are a wealth of opportunities and unique interactive experiences that can be realized in blending this new technology with the interface flexibility of touch screen displays. Add in rear-projection and such a system can be reconfigured and customized to meet a variety of needs.

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Leverage Existing Eyeballs, Spread Your Brand, Grow Niche Content Sites

Wow, isn't it great to see ideas you support spread across the Web?...Chris Brogan linked to a video today from Gary Vaynerchuk, the founder and personality behind Wine Library TV, that builds off of the views I expressed yesterday on the importance of niche and hyper local content. I was caught not only by Gary's opinions toward the growth of hyper-targeted content sites, but by his use of the same metaphor I highlighted in regards toward the need to latch on to new platforms in extending one's brand (See if you can pick out the line....hint, hint...it has to do with ships).



Niche content sites are a huge opportunity area for all media companies, including digital out-of-home. If you are already garnering eyeballs, figure out how to draw them to other properties that act as extensions of your core brand. Just as The New York Times needs to branch out from its central platform, leveraging its brand equity and broad readership to build new content-rich properties, so too must digital out-of-home networks direct its viewers toward targeted media outlets that are connected to its core brand. The concept then begs the question: What if we don't own niche sites to direct viewers to?

Build them, acquire them, or develop strategic partnerships with companies that have them.

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The Long Tail of Hyper Local Content

There's a reason why metropolitan newspapers are struggling and their local counterparts are weathering the economic storm. Here in the Philadelphia area, the ownership group behind the Philadelphia Inquirer and the Daily News is in bankruptcy; while neighborhood papers like The Reporter are thriving.

As I highlighted last week in reference to Rob Gorrie's MediaPost article on hyper-targeted advertising, local content provides an unparalleled level of relevance to area residents that is difficult to replicate on the Web. Whereas metropolitan papers are finding it increasingly difficult to compete with online media outlets that report national news in real-time, local newspapers provide a community connectedness that people find comfort in. While these publications are heavily rooted in their respective local markets, they still must adapt to the same seismic media shifts that are impacting radio and television networks alike.

The advantage for these local entities is that they have a much greater chance for long-term survival as we enter a new age of media - based on their relevance and position in their respective communities. Local media outlets need not alter their business models to the degree that a paper like the Inquirer must, but they still need to connect with audiences through new platforms (digital, mobile, etc.) so not to be solely tied to the sinking ship that is print media. The more boats they have in the water, the better.

Digital signage is an ideal boat for local news outlets to tie themselves to. It is perfect platform extension for hyper-localized media outlets. What better way to connect with patrons at the local gas station or grocery store then to engage them through content from their neighborhood newspaper or local broadcast station. By tapping into the long tail of hyper local content, media companies can create richer relationships with their communities by reporting on everything from local politics, sports and education to culture, special interests, weather and news. Digital signage networks gain the benefit of highly relevant and sticky content, and their media partners connect with community residents while they are out and about (further embedding them in the local fabric).

Partnering with a local newspaper is a strategic initiative that all digital signage network operators should engage in. The operator gains a major content and advertising sales partner. Local newspapers and media outlets are always on the lookout (especially in the current market) for new revenue opportunities. Place-based digital signage networks are a perfect match for a local paper's existing portfolio of advertisers. Packaging digital signage screens into local media buys (newspaper, radio, etc.) creates opportunities for generating increased revenue, while illustrating the local entity's acceptance and knowledge of new technology platforms. It is a mutually beneficial relationship.

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iPhone App from Universal Interacts with Blu-ray Movies

How would you like to access bonus content on a Blu-ray disc by using your mobile phone as a virtual remote? Such is the innovative technology being launched by Universal Studios in conjunction with their new Blu-ray releases. The Company is looking to take a huge leap forward in the Blu-ray market by offering interactive features that reimagine how consumers watch movies.

Universal Studios Home Entertainment is making up for lost time. The studio that was the last to get onboard with Blu-ray Disc now seems bent on becoming one of the high-definition format’s key innovators.

The studio today is expected to announce plans to deliver an extensive array of touch-enabled iPhone and iPod features to its upcoming Blu-ray Disc releases. The features can be accessed via companion applications from Apple’s App Store.

The initiative gets rolling July 28 with the Blu-ray Disc release of Fast & Furious. For the first time, iPhone and iPod Touch users will be able to control interactive content on their Web-connected Blu-ray Disc players. On subsequent Universal Blu-ray Disc releases coming later in the year, consumers will be able to access bonus content found on their Blu-ray Disc releases and download it onto their iPhone or iPod Touch. They’ll also be able to use the devices as a virtual remote to control their Blu-ray Disc features and access additional information while watching the movie.

Releases also will integrate with social network applications such as Twitter and Facebook to let users update their followers and friends about movie-related activities.

Direct viewer control and engagement via a personal technology device steps beyond the dynamics of the typical cinema experience in ones home. By giving users the ability to unlock social, interactive, and cross-platform content via mobile-to-screen interactivity, Universal is taking what was once a passive experience and redefining it. The technology eliminates significant boundaries that normally exist between consumers and home entertainment content. From this major technology initiative, Universal is sure to generate significant word-of-mouth, elicit major customer feedback, and bring the best aspects of online gaming and mobile interactivity to its Blue-ray releases.

This technology offers deep insights into what future applications that link smartphones and digital signage could look like. While we have seen some elements of this technology before, in launching interactive elements within is lineup of new Blu-ray releases Universal is fostering a level of engagement and social entertainment that consumers will come to expect from all forms of content. Just as social media platforms like Twitter and Facebook are being integrated into online video broadcasts (ex: integration of Facebook widget into CNN's live coverage of Michael Jackson's memorial service: generated 6,000 Facebook updates/minute at its peak), Universal is offering consumers the opportunity to take participative roles in their consumption of content. These technologies facilitate greater content sharing, more expansive conversations surrounding content, and the development of richer connections between viewers and the content itself

With this technology consumers are empowered to breathe further life into movies and grab a hold of the characters, emotions, and events that lie at the heart of a film.

“By harnessing Blu-ray technology and combining it with Apple’s highly acclaimed iPod touch and iPhone, we continue to raise the bar in delivering an array of unprecedented, user-friendly home entertainment experiences,” said Craig Kornblau, president of Universal Studios Home Entertainment and Universal Pictures Digital Platforms.

“Bridging these platforms further broadens the scope of the digital landscape by paving the way for innovative new applications and interactive content enhancements that continue to uniquely engage consumers.”

The two-disc special edition Blu-ray Disc edition of Fast & Furious will include a “Virtual Car Garage” bonus feature using BD Live technology. BD Live lets consumers hook up their Blu-ray Disc players to the Internet to access a variety of Web-enabled interactive features, provided that the disc itself also has BD Live functionality.

The Virtual Car Garage feature lets viewers use the touch screens on their iPhone or iPod touch devices to control 360-degree views of the movie’s street racers and instantly call up the cars’ technical specs. (via Home Media Magazine)

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Final Thoughts on Danoo-Ideacast Deal

Thanks to a number of industry bloggers and analysts, including Bill Collins, Bill Gerba, Adrian Cotterill and many others (myself included), Danoo's acquisition of Ideacast has been looked at, and assessed, from various points of view. The discussion that has emerged from the transaction, debating its significance and impact on the whole of the industry, has been marked by thorough and detailed analysis. I have been thoughtfully engaged by every individual who has given their opinion on the subject. (links to all of the articles and analyses are included below)

I am proud to have participated in such a lively discussion. It's evident that everyone involved has respect for each other's knowledge and views on the digital signage industry. The discourse hasn't been about brow beating or being seen as more knowledgeable than anyone else. Each analysis and its responses have been respectful of every person's opinion. At the end of the day, it's not about who's right or who's wrong, because that's not what's important. What's important is the in depth discussion and well-thought analysis that was born from looking at the acquisition from a multitude of angles.

Strong points were raised on both sides. I can honestly say that the points Bill Gerba raised allowed me to see his side of the debate much more clearly. In a number of ways, he is right about what the transaction may or may not mean for our industry; just as the viewpoint shared by Bill Collins and Adrian Cotterill (and myself) has merit when looking at where Danoo, Ideacast, and NCM could be one year, five years, and 10 years from now.

The final truism is that it's all relative. A "watershed moment" to one person may just be good news to another. It's not that the event is any less important. People just look at things from different angles. If Danoo can take advantage of all the resources at its disposal thanks to bringing NCM and Ideacast into its fold (resulting in a successful IPO), I think that its acquisition of Ideacast will come to be universally looked at as a turning point for the company.

I have to admit that I thought CBS' acquisition of Signstorey back in 2005 would have come to be known as a turning point for our industry. I thought CBS would come in, revamp the network, and become an ambassador for the industry. I, however, don't think Signstorey is anywhere close to reaching its full potential. The fact that CBS licensed SeeSaw Networks' media buying and planning platform to sell inventory on its digital signage networks, rather than utilizing its own system, (coupled with the reality that Signstorey hasn't changed much since 2005) shows that the company is not yet truly invested in the medium. So, what could have been a watershed event has become nothing more than a missed opportunity.

You could go and on with examples of industry deals that look liked they had the makings of significant industry turning points. When Thomson acquired PRN, I think it's safe to say that Thomson management saw a brighter future than selling the network a couple of years later for well less than PRN was purchased for. If the stars aligned and things worked out as Thomson would have liked them to, we all could be sitting around a camp fire saying that acquisition was a watershed moment.

Ultimately, the more you look at it, both sides are right. Danoo's acquisition of Ideacast could be the strategic move that elevates the company to the top of the industry. That will only happen if the company is able to effectively leverage all of the potential that the combined entity brings. In the future people may look back and say that the acquisition was a watershed event. Should Danoo, Ideacast, and NCM fail to develop synergies across their organizations, we may look back and just think about what could have been.

My final analysis is that Danoo's acquisition of Ideacast could come to be known as a "watershed event" for the digital signage industry. It will be as long as the Company can stay on the road it has set out for itself.

In time we'll have our answer.


Links to Danoo-Ideacast Resources (Analysis, Commentary, etc):

"Danoo and Ideacast Merger is a Marriage Made in Heaven" - David Weinfeld

"A Watershed Moment for DOOH Media" - Bill Collins

"How Significant is the Danoo-Ideacast-National Cinemedia Deal" - Bill Gerba

"Is Gerba or Collins Right? - Further Examination of the Danoo-Ideacast Deal" - David Weinfeld

"It's Good for Danoo" - Adrian Cotterill

"Danoo/Ideacast Again" - Bill Collins

___________________________________________________________________

Just as the Danoo-Ideacast deal is an exciting acquisition for the digital signage industry, there are likely to be many more. Over the course of the next few years, we'll see mergers, acquisitions, and major venture capital investments across the digital out-of-home media sector. Such is why it's important to understand the investment landscape and how it will impact digital signage hardware and software sompanies, network operators, aggregators, media agencies, and beyond.

Whether you're a network owner looking for start-up capital or an executive trying to better understand the dynamics of the digital signage industry, you should look to attend Strategy Institute's fourth annual “Digital Signage Investor Conference” taking place on October 6 and 7, 2009 in New York City.

Despite a bleak advertising landscape over the last 12 months, the industry has been a bright light and continues to stay energized. Veronis Suhler Stevenson recently valued the sector at as much as $2.5 billion.

“Who would have thought digital signage would be the ‘safe haven’ and vehicle for growth in the advertising meltdown of the current financial crisis,” said Tom Blaisdell, general partner at DCM, a venture capital firm with offices in Silicon Valley, Beijing and Tokyo.

More venture capital injection is expected for the sector and a panel featuring DCM, Syncom Venture Partners, Claremont Creek Ventures and PRIVEQ Capital Funds will delve into what investors are looking for now and the funding available.

True to last year’s discussions and predictions at the event, 2009 deals so far have centered on consolidation. ZOOM Media has been leading the way, acquiring ClubCom and SmartOne Media in the first quarter. Shortly after receiving $30 million in funding from ABS Capital, it again added to its network presence by purchasing the Wellness Health Education Network.

In October 2008, Fuelcast, an at-the-pump digital network merged with Bhootan, a digital OOH company in the retail sector. The two organizations have since been rebranded as Outcast and recently announced a joint venture with another at-the-pump network.

“Today’s network lack the reach and breadth of market coverage to capitalize on the looming shift in ad spend,” said Matthew Stoudt, CEO of Outcast. “Industry consolidation, therefore, is a necessity and those that aren’t a part of it will be dead within six months.”

Stoudt, along with Andy Querin, president and COO of ZOOM Media Canada are part of the speaker line up that also includes:

Beth Ann Kaminkow, President & COO, TracyLocke
Ana C. Stewart, CEO, i-design Group Ltd. (UK)
Ajay Chowdhury, CEO, EnQii Group
John McMenamin, CEO, Ripple TV
Jeff Bell, Chairman, DOmedia
Chris Borek, Senior Manager, Digital Marketing, Target
Jason Helfstein, Executive Director, Media & Internet Equity Research, Oppenheimer & Co.


“The Digital Signage Industry stakeholders will determine the worth of their companies, network and connect with corporate buyers, consolidators & partners and also learn how to replicate the success of companies that have already obtained funding at this conference,” said Yashod Bhardwaj, Project Manager at Strategy Institute.

Building on the success of its previous events, the “Digital Signage Investor Conference” brings together the industry’s top leaders for two days of interactive learning and investment match-up opportunities. It is the only industry event dedicated to providing intelligence and networking among investors, network operators and solutions providers.

For details visit: http://www.strategyinstitute.com/100609_dsic4/dsp.php

About Strategy Institute

Strategy Institute is a leader in delivering timely knowledge and best practices to the digital signage industry since 2005. The organization was one of the first in the space and continues to support and foster growth of digital signage/narrowcasting through its annual conferences.


Contact:
Yashod Bhardwaj
Project Manager
Strategy Institute
New York Toronto
1-866-298-9343 x239
bhardwaj@strategyinstitute.com
www.strategyinstitute.com

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Using Sponsorships to Drive Creativity

"Sponsorships can transform our physical and virtual worlds into more entertaining, inspiring and interesting places to be."

The above quote is from an article in Creativity Magazine that draws on the creative opportunities that can evolve from viewing advertising and marketing from alternate perspectives. The author of the piece, Tali Krakowsky, Director of Experience Design at WET, envisions a world of creative expression driven by sponsorships. This is something that we see when financial institutions and law firms sponsor large art exhibitions. But, Tali believes that the level and frequency of sponsorships, and thus their resulting impact, could be significantly larger.

What makes what we do special is that we connect people and create unique and memorable experiences. One exciting way to do that is to bring artistic expressions to people and their everyday places. That is one reason why I love working at WET; I feel we create experiences that are democratic, universal and free.

We sometimes would like to forget that these experiences cost money to create. Innovation can be expensive and I would much rather help brands sponsor great contributions to society than create another commercial or billboard. As the television model is evolving and the 30-second commercial model is fading, we have an opportunity to make sponsorship transform our physical and virtual worlds into more entertaining, inspiring and interesting places to be in.

Money is not evil – it's just what we sometimes end up doing with it that makes it seem that way. (via Creativity)

While you could argue that Ms. Krakowsky's vision is overly utopian, and that it's impossible to disconnect advertising from its capitalistic aims, she offers a welcome take on how to navigate the choppy waters that encircle the future of advertising. After decades of having brand messages forced into their lives, consumers are skeptical of all forms of advertising. Now that they wield the power, consumers demand brand experiences that respect their role in the conversation. From Ms. Krakowsky's perspective, one way to do that is to take media dollars previously earmarked for traditional push media and use that money to sponsor creative projects that enrich our society.

Sponsoring creative installations and artistic exhibitions differentiates a company from its peers. The company connects with consumers on a personal level. These programs go a long way in strengthening a company's position in its community and engendering long-term brand loyalty. Plus, artistic sponsorships provide tangible evidence of a company's contributions to the general public. Rather than being looked at as entity that takes more than it gives, a company with an active sponsorship program is able to carry forth its brand ethos in a manner that shows enormous respect for its consumers.

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Is Gerba or Collins Right? - Further Examination of the Danoo-Ideacast Deal

Once it was announced, I was compelled to offer my thoughts on Danoo's acquisition of Ideacast. In my initial commentary, I cited the strong growth potential of a combined Danoo/Ideacast entity. Especially, considering the deal brought in National Cinemedia as a minority owner of the joint company, while maintaining the minority interest held by VC firm Kleiner Perkins Caufield & Byers in the expanded organization. I called the deal "A Marriage Made in Heaven."

Not long after my article hit the Web, Bill Collins, an experienced and well-respected digital signage industry consultant and analyst, published an in depth analysis of the deal on DailyDOOH. He cited Danoo's acquisition of Ideacast as a "Watershed Moment" for our industry. The detailed report provided ample evidence to support his thesis statement. He drew on National Cinemedia's experience and success in the digital out-of-home field, as well as Kleiner Perkins' position of leadership in the venture capital sector, to provide significant foundation for his argument.

After circulating across a number of industry blogs and websites, I'm surprised to see that Mr. Collins' analysis has come under scrutiny from another industry thought leader - none other than Wirespring's Bill Gerba. Gerba dropped the gauntlet on Collins this morning by exclaiming that the deal is nothing more than "business as usual" for what has been a big year for digital signage market consolidation.

While Gerba defends his side of the argument by identifying a number of mergers and acquisitions our industry has seen this year (ex: Fuelcast and Bhootan merged to form Outcast), questioning how one could call the Danoo-Ideacast deal that much different from any of the others, I think his conjecture is derailed by his own musings on where the combined Danoo-Ideacast is headed. As his article continues, Gerba theorizes that Danoo is on a growth path toward an IPO (I Agree...). So my question then to Bill is:

How could you say this deal is not a "watershed moment" when you view its potential outcome as a Danoo IPO?

The truth is that I can see where Bill Gerba's view toward the deal is coming from. He sees the deal as just another stepping stone toward greater industry expansion. In a way, both Collins and Gerba are right (to a degree). Gerba makes points that one must consider in imagining how this deal could impact our industry over the next year or so, but I think Collins is ultimately the one who is right (if it's necessary to determine a victor). The deal itself is not the end all and be all of the argument. It's what will likely emerge from the transaction that is the most important.

For Gerba to theorize that Danoo could have an IPO a year or so from now, which would be another major moment for our industry, means that the impact of the Ideacast acquisition is more far-reaching than even he can admit. By bringing NCM into its fold, with eyes toward taking advantage of the company's significant industry experience and national advertising relationships, Danoo is gaining an equity partner that is sure to fuel its near-term growth and long-term success. It shouldn't be lost on anyone that NCM had an IPO of its own in early 2007.

It's Danoo's acquisition of Ideacast that sets the stage for the company to grow at a faster and more strategic/efficient rate. The deal isn't significant because of the finite details of the transaction. It's significant because of what it portends. With its acquisition of Ideacast, Danoo has gained critical pieces to add to the framework that will support the company's future.

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Rob Gorrie Promotes Hyper-Targeting via DOOH

Rob Gorrie, the CEO and founder of digital signage aggregator Adcentricity, has a great article on MediaPost.com today highlighting the benefits of hyper local advertising. When he's not out adding networks to his platform that reaches over 200 million monthly viewers, Rob captures his thoughts on the digital signage industry and media sector on his blog, "Advertise Here." If you aren't a current subscriber to his blog or its not on your daily reading list, I recommend adding it now.

In his article on MediaPost entitled, "Believe the Hyper: Advertise Locally," Rob articulates the wide ranging opportunities that hyper-targeting offers to advertisers. An advertising message that is targeted to local markets while also reaching nationally increases the relevance of a company's communication efforts. Such a strategy can yield unparalleled results in building long-term consumer relationships.

In his role as an industry evangelist, Rob cites the far reaching benefits of digital out-of-home media and how the emerging platform can deliver advertising's holy grail - hyper-targeted campaigns that deliver national reach while engaging consumers at the right place and the right time.

Adding digital out-of-home media to your complete customer management strategy will allow you to hyper-target the exact audience you want, when and where you want to reach them. DOOH creates the ideal customer experience and positions your clients' business for continued growth over the long-term.

While the advantages of hyper-targeting are easy to see, carrying out such a strategy requires an advertiser to overcome a wealth of challenges. In building a campaign that has national reach and is optimized according to specific local markets, an advertiser must have a deep understanding of the unique attributes of each market where his campaign will air. This, of course, is a daunting task, one that advertisers are ill-prepared to face on their own. That's where aggregators come in. Companies, like Rob's own Adcentricity, bridge the gap between hyper-targeting and national advertising.

At first glance, hyper-targeting may appear to be a nut that is just too difficult to crack. You know there's a prize inside, but you struggle to rationalize the amount of work required to get there. Deciding to leverage digital out-of-home media in a company's marketing mix is just the first piece of the puzzle. DOOH offers the promise of hyper-targeting, however, the sector is highly fragmented across a plethora of disparate networks. It's aggregators like Adcentricity and SeeSaw Networks that provide the means for bringing hyper-targeted, national campaigns to life.

There are several pitfalls that the typical agency executive might not be aware of when it comes to purchasing DOOH media. For instance, it would be difficult to effectively hyper-target to, say, the top 5% of Hispanics in the leading Hispanic zip codes. You'll lose out on scale because cutting markets that way may only give you about 3,000 people per zip code. Instead, if you relax your targeting to the top 15%, you'll get 20 times the audience for an incremental increase in budget, because tier-two audience zip codes have 40,000 people each. What may look like a "B" target could in fact make your campaign an "A".

Agency partnerships with aggregators give brands instant access to insight such as this that they just can't get working network by network. It allows brands to immediately see the whole landscape and understand the true impact they can have with their campaigns. It expands the understanding of the medium and increases the size of campaigns and reach for less money than with other media. (via MediaPost)

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15 Year Old Morgan Stanley Analyst Shakes up Media Industry

The buzz circulating around the media industry on this Monday morning is focused on a Morgan Stanley industry report that trashes traditional media. Typically, this sort of thing wouldn't generate anywhere near what qualifies as significant coverage, but the fact that this report was written by a 15 year old Morgan Stanley intern is what has gotten executives two and three times his age stirring.

The story goes that European media analysts within Morgan Stanley's London office asked 15 year old Matthew Robson, one of the bank's summer interns, to describe his friends' media habits. The analysts found Robson's report to be so thorough and insightful that they decided to publish it. The response has made it one of the shop's most popular research reports in years. The response was enormous. “We’ve had dozens and dozens of fund managers, and several CEOs, e-mailing and calling all day,” said Mr Hill-Wood, 35, estimating that the note had generated five or six times more feedback than the team’s usual reports.

The report offers Robson's take on teenagers' use of traditional and new media platforms, including newspapers, television, radio, and Twitter. Listed below are some of the most prominent points on the current state of the media industry (from the perspective of a 15 year old) as cited within the report:

“Teenagers do not use Twitter,” he pronounced. Updating the micro-blogging service from mobile phones costs valuable credit, he wrote, and “they realise that no one is viewing their profile, so their tweets are pointless”.

His peers find it hard to make time for regular television, and would rather listen to advert-free music on websites such as Last.fm than tune into traditional radio. Even online, teens find advertising “extremely annoying and pointless”.

Their time and money is spent instead on cinema, concerts and video game consoles which, he said, now double as a more attractive vehicle for chatting with friends than the phone.

Mr Robson had little comfort for struggling print publishers, saying no teenager he knew regularly reads a newspaper since most “cannot be bothered to read pages and pages of text” rather than see summaries online or on television.
(via Silicon Alley Insider)

Read the whole report here.

Personally, I don't think the report offers any ground breaking insights that any media executive worth his salt wouldn't have already known. Do we really need a 15 year old to tell us that teenagers don't read newspapers or that they rather listen to streaming music free of advertising instead of the radio? I think it's great that analysts at Morgan Stanley sought out Robson's opinion (sure beats making copies), but to print a formal research report from his musings is irresponsible. It is nothing more than a gimmick (PR stunt) to generate buzz.

It's critical as a media professional to track how teenagers consume media. They are, of course, key drivers of new media initiatives and technologies. And, while Matthew Robson is certainly a talented young man with a bright future ahead of him, just because a person is 15 years old does not mean that he is qualified to offer blanket (mostly stereotypical) assessments of how teenagers view and consume media.

What do you think of the report? Does it cover anything that you didn't already know?

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Coldwell Banker Launches Interactive Billboard in Times Square

Real estate agency Coldwell Banker has launched an innovative digital out-of-home media campaign that brings thousands of its listings from across the country direct to Times Square visitors. From July 6 through August 2, Coldwell Banker will be hosting a mobile phone enabled interactive digital billboard in Times Square that displays user requested home listings in real time.

“Times Square is the crossroads of the world filled with tourists from all over the world,” said Michael Fischer, senior vice president of marketing, Coldwell Banker, Parsippany, NJ. “The power of connecting to the great Coldwell Banker brand while visiting Times Square is powerful.

“The message is clear,” he said. “We are a brand heavily invested in innovation that welcomes consumers who want to engage with us anytime, anywhere.”

Coldwell Banker worked with its interactive marketing agency of record FD Kinesis to develop a proprietary texting program for the billboard in Times Square. The billboard encourages people to use their mobile phone to text the word HOMES and any ZIP code to short code 30241.

Within moments, the billboard will display the highest-, median- and lowest-priced properties in that area. Consumers also receive a text from Coldwell Banker directing them to a link with more information.

“Consumers want quick access to online listings and this campaign reinforces how easy it is to find listings and information, anytime, anywhere,” Mr. Fischer said. (via Mobile Marketer)



From iPhone applications to SMS-based home information systems, mobile marketing is having a major impact on the real estate industry. For good reason. Integrating the mobile channel into a real estate agent or company's promotional mix is a great way to assist prospective buyers in locating properties, learning more about a specific house or community, geo-tagging listings for further review, etc.

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Optimizing Marketing and Consumer Engagement on Digital Screens

I read a great blog post recently via Advertising Age that focused on the importance of blending creative interface design, consumer analytics, and multi-platform brand strategy in the development of self-service kiosks and customer-facing digital signage. In building these systems and networks, it's critical that they offer distinct benefits to brand partners and consumers. To consider one independent of the other undoubtedly leads to technological developments that lack the efficiencies, revenue generation potential, and universal benefits that can be realized in satisfying the needs of all stakeholders involved.

What's important to recognize is that it's a give and take relationship. Compromises must be made in order develop a final product that stays true to consumers (respects their role in the value chain) while fulfilling the needs of advertisers. The television production and overall network cycle is fueled by advertisers' desire to reach the audiences television programs draw. If television weren't entertaining, people wouldn't watch (go elsewhere for their content fix...yes, this is happening right now). When people don't watch, advertisers don't pay. New program development slows. Media dollars flow to other outlets. The market narrows and drifts toward ultimate collapse. The only way to survive is to adapt to changing consumer behavior and emerge anew.

If a company only focuses on leveraging technology platforms as all out marketing devices, the resulting experience is in genuine, inefficient, and lacking in its ability to facilitate consumer engagement. Such a platform will either diminish a consumer's view of a particular brand or company, or lead him to ignore it all together. To develop a platform that solely focuses on end-users, without considering how the network operator or advertisers could benefit from such a system, unfortunately leads to applications that consumers enjoy and draw value from, but which are very difficult, or even impossible, to monetize (any applications come to mind?)

In the Advertising Age piece, Mat Zucker, an executive creative director at OgilvyOne, draws off a recent experience using an airline check-in kiosk, whereby he was offered incentive packages and promotional offers not suitable to him; even though the system could have easily leveraged his personal information and previous airline experiences to deliver relevant offers. As a digital media strategist, he quickly identified areas in which the system was lacking as both a customer service tool and marketing platform. In discovering the system elements that required improvement, he came to the conclusion that unique engagement opportunities could be unlocked through a greater focus on interaction design and increased data analysis of user behavior.

We need the re-emergence of the interaction designer to help us better bridge the brand goal and customer engagement. Unlike in decades past, though, they can't only be on the side of the customer, telling brands what they can't do. They need to respect direct marketing and find the right place and space and moment for a special offer or a thank you or both. These are a recognized part of customer experience, no matter how purists feel. These up-sell offers from United, for example, can exist as part of my check-in, but please place them on the bottom-left or top-right of my screen. The bottom-right is so I can get my boarding pass. And consider mobile check-in, which is where it's all going; perhaps target one of these instead of all four.

The interaction designer's partner could be an analytic strategist who mines data to figure out creative communications and relevant offers that benefit both brand and customer -- someone who can connect what we know will work and what might work. And this team needs to work across screens -- retail kiosk, mobile screens, PC and bigger displays of which we're seeing more.

Digital screens and their uses are multiplying across brand experiences, making interface design and usability more important than ever. In-store kiosks, mobile interfaces and bigger digital displays are the keyboards for more of our personalization and purchase experiences. Interaction design experts, sidelined too much as websites needed less usability testing last decade, need a renaissance and to be better backed by brand managers.

We need elegant magicians who can bridge brand goals to customer engagement: art directors of interaction. To succeed, they need the ability to assert themselves -- and sometimes over marketing people who want too much and who can be their own worst enemy.

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Locamoda Fuels VH1's "The Great Debate" via Zoom Media and Facebook

I find myself writing quite frequently about Locamoda, the mobile technology company that brings interactivity and social connectivity to digital signage. With the recent launch of an iPhone application for the company's Jumbli word game, the integration of its technology into the social fabric of a major summer concert tour, and the utilization of its SMS-based conversation capabilities in linking digital out-of-home screens with a major cable network, Locamoda continually illustrates the amazing opportunities that exist at the convergence point of mobile marketing and digital signage.

The company is a full-fledged industry pioneer whose text-to-screen application, Wiffiti, is the most used across the industry. With a focus on connecting out-of-home screens and social networks, Locamoda has emerged as the mobile partner of choice for digital signage network operators. In its most recent project, leveraging text-to-screen interactivity in bars and nightclubs to foster debates on classic pop culture grudge matches, Locamoda shows us the true power of its technology in forging social interactions. In partnership with VH1, whose series "The Great Debate" encompasses the irreverent conversations that grow out of time honored pop culture arguments, Locamoda's Wiffiti platform succeeds in bringing these conversations to the general public via Zoom Media digital screens, as well as through Facebook integration.



What I love about this project is its illustration of the degree to which Locamoda's applications fuel social discourse across mobile, out-of-home, and online platforms. By introducing classic pop culture debates (ex: Star Wars vs. Star Trek) into nightclubs and bars via Zoom Media digital screens, and using Locamoda as the mechanization to set those digital signs ablaze with comments and activity, VH1 is successfully using emerging technology platforms to, not only, promote its new series but to get its target audience involved (and invested) in its community-driven ethos.

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Danoo and Ideacast Merger is a Marriage Made in Heaven

Wow! I open up my web browser this morning and the first article I land on is the announcement of Danoo's acquisition of Ideacast from National Cinemedia. Talk about a watershed moment for the digital signage industry. This will very well go down as a significant turining point in the life of our young industry. With a network of the combined size and scope of a Danoo/Ideacast merged entity, the media industry will be hard-pressed to ignore the over-arching benefits of our emerging medium. This level of consolidation will surely bring heightened attention to the industry. The ability to buy across a network the size of the new Danoo (w/Ideacast's locations in tow) is a major coup.

I have always admired Danoo as both a company and an industry innovator. From the company's movement into airport retail via a partnership with Trofie and its continued focus on bringing user-generated content to its screens, in my eyes, Danoo has always had the makings of a company that could take our industry to the next level. With the backing of one of the largest and most well-respected venture capital organizations in the world, Kleiner Perkins Caufield & Byers, the sky appears to be the limit for the new Danoo. The combined reach of the Danoo/Ideacast entity will be around 30 million people per month.

To all you media buyers and planners out there, this is your opportunity to stand in front of your bosses and bellow the benefits of digital out-of-home media from the rooftops. I promise that whatever push back you may have received in the past will be all but eliminated when you talk of what this new network will look like. We're talking about top-level locations, premium content, and superior management behind what is now one of the largest digital signage companies in the world.

The whole of the digital signage industry should be smiling this morning. This market event will send ripples across the far reaches of the industry and almost every player therein. I congratulate Danoo and Ideacast on the construction of their joint network and wish them all the success going forward.

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Locamoda Makes Demi Lovato's Summer Concert Tour More Social

When you have a stadium full of fans at a music concert, in this case Demi Lovato's Summer Tour, you have the opportunity to engage a passionate community brought together by a significant shared interest. It's in tapping the energy at the heart of that community that those opportunities are realized. Creating a more social concert experience, one that has the potential to connect all in attendance - and even those following the real-time stream of activity online, is beneficial to the fans, concert sponsors and advertisers, venue operators, and the artists on stage.

Whether or not you're sitting in the front row, the nosebleed seats, or in front of your computer twittering away at home, to actively participate in the concert, and the community-at-large, through a real-time, multi-platform conversation is a powerful thing. Demi Lovato's fans have Locamoda and the company's Wiffiti application to thank in seamlessly connecting people at the venue with not just each other, but fans around the world as well.

Large Wiffiti-enabled projection screens flank the stage during Ms. Lovato's summer concert tour, giving fans in the venue and at home the ability to send messages and pictures to the digital screens (via SMS and the Web). The screens also pull in Demi Lovato tagged content from Twitter and Flickr. It should come as no surprise that thousands of texts and photos are sent to the screens during each concert.



Concerts are perfect venues for Locamoda's mobile applications, especially those concerts that cater to tween and teen girls. As the ambassadors of the "New Media Triad," Steve Randall and his staff at Locamoda understand the full potential of linking mobile interactivity and digital out-of-home. By connecting fans at the venue and those at home (fans can send messages via Web-based widgets, with the opportunity to embed them across social networks), Locamoda harnesses the all-encompassing pulse that beats through the entire Demi Lovato fan base.

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How Redbox is Disrupting the Movie Rental Industry

Redbox, the DVD-rental kiosk company that is altering the landscape of an entire industry, has more than 15,400 vending machines in supermarkets, discount stores, Walgreens, and McDonald's restaurants across the country. Redbox machines carry about 700 discs with 200 titles, mainly recent releases, and rely on the $1 nightly rate to encourage people to experiment. Four million people have swiped a card at one of the kiosks in the past month.

Having started as a McDonald's subsidiary, the company was able to leverage its parent's heavily trafficked fast food locations to penetrate an already competitive marketplace. After bringing Coinstar on as a partner, gaining a strategic ally with a wealth of existing retail relationships, Redbox has emerged as Netflix's strongest competitor. Redbox's success has prompted Blockbuster to deploy 10,000 DVD kiosks of its own in a deal with NCR Corp, one of the world's largest providers of ATMs and cash registers. (This is yet another example of Blockbuster duplicating a successful market innovation. Is the company too cost heavy and set in its ways to come up with any ideas on its own?)

As a self-service solution that has experienced accelerated growth within an industry filled with large entrenched players, Redbox illustrates the power of leveraging customer-focused technology in physical locations. In making the video rental experience as simple and efficient as possible for the consumer, Redbox has disrupted an entire industry. The solution isn't perfect, but it fills a profitable niche within the broad marketplace.

Having retail partners like Walmart, Walgreens, and major grocery store chains, speaks to Redbox's significant reach. There are already more DVD-rental kiosks than video stores in the US. Optimizing its DVD selection according to customer behavior (key focus on new releases), Redbox adapts to each location and delivers a customized experience. David Deal, a marketing director at Razorfish, highlights the best attributes of Redbox's business model in a recent post on his blog Superhype:

Redbox is convenient. The vending machines are often found near the entrances of supermarkets and drug stores. It’s easy to combine a DVD rental with a quick trip to pick up some soda pop and chips. But Redbox is also banking on the impulse renter. It’s just too darned easy to pick up a DVD on the way out of the store similar to scooping up a magazine or candy bar at the check-out lane. The concept is brilliant.

Redbox is simple. The pricing terms are easy: you rent movies for $1 dollar a night. There are no complicated, multi-tiered pricing systems to understand. And the movie rental categories are simple. You don’t encounter the dizzying array of specialty categories found at movie rental stores, like Family Favorites, Hollywood Favorites, Movies about Psychotics, Just Fallen off the Top 10, Classics for Kids, Classics for Teens, Romances Pre-1950, and so on. Redbox has to keep the choices simple. You don’t have a lot of time to ponder your options on your way out to the car with a gallon of cold milk in your shopping cart.

Redbox is social. I don’t even think Redbox knows this yet. But renting and returning DVDs is a social experience at Redbox vending machines. I’m amazed at how many times strangers walk up to each other at a Redbox and seek out each other’s movie opinions or swap informal movie talk. (”You returning Revolutionary Road? What did you think?”) Maybe I shouldn’t be surprised given that Redboxes are located in places where people congregate.

For those of you who demand a wider movie selection, don't want to leave the comfort of your home to rent or drop off a DVD, or are able to stream movies directly to your TV, Redbox might not be your movie rental solution of choice. But, you can't argue that Redbox doesn't fill a void in the marketplace.

While DVDs will someday disappear, for now the market dynamics still work for Redbox: almost 90 percent of U.S. homes have a DVD or Blu-Ray player, while only a sliver download movies to their computer or stream them from the Internet, said Russ Crupnick, an entertainment analyst for market researcher NPD Group.

"Digital options and physical options can coexist," said Crupnick. "People think there's this balkanization — `Once I get Netflix, I never go to Blockbuster. Once I go to Redbox, I don't need Netflix.' That's really not the way that it works in the world." (via Associated Press)

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