May 23, 2001
Hollywood Reporter

by Martin Groove

Movie marketing: Theater lobby one-sheets have been a prime marketing tool since Hollywood's earliest days, but in today's high-tech world they may soon be competing with new "living posters." These plasma-based displays will present moving images from movies along with commercials for concession stand items, local shops and national products.

The technology driving all this is Gardena, Calif. based Antex Electronics' new Media Director. Although its name sounds like an ad agency executive's title, it's really a device that links theaters, video stores and shopping mall kiosks to Internet-connected audio and video advertising. Besides one-sheets, the company envisions various other applications within movie theaters and their lobbies as having good potential for its new technology, according to Antex president Dave Foley and sales director Dave Antrim.

"Movie posters are currently one-sheet back-lit posters, high resolution photos, and very static," Antrim explained. "They're often placed outside the theater (as well as) inside the theater so people go around and see what's coming next. In our case, we have the opportunity with a plasma display screen or an LTD screen to make those posters active -- to actually show trailers (and) show multiple coming attractions and have the power of video to really garner consumers attention whether they're waiting in line or, perhaps, driving up to the theater or while they're inside the theater, itself. They can get more input into what is available now and what's coming in the near future."

"What we have is an appliance and the client server software to control the distribution of media anywhere where you have an Internet connection," Foley told me. "We can attach it to a high resolution plasma display. We sell the appliance that has a video output that connects to a commercially available display."

When people look at the Media Director they're watching its images and may be hearing audio, as well. "That's actually at the discretion of the theater owner," Antrim said. "Our Media Director is an appliance that hooks up to a display screen -- to an LTD or plasma or monitor screen. It has both audio and video output so it can put out full motion video and audio or stills. The theater owner who is running these in his displays has the opportunity to do audio and video or he can just tailor it for video only, if he wanted to have other audio within the building."

"It depends on the model that the theater owner wants to pursue," Foley added. "You can either have static images that change based on the time of day or who's standing in line. If you've got a Disney movie and everybody's (waiting) to get in, you might not show them (the trailer for an R rated movie). You might show them the next animated film that you're going to be showing. That's one of the many value adds (the Media Director offers) -- the ability to not only entertain people while they're killing time, but target them with upcoming events specifically tailored to what type of audience you think they are or with ads, for that matter."

Clearly, Antex sees the Media Director's advertising capabilities as a key sales point for the new device. "We know that movie theaters have to generate revenue," Antrim observed. "Obviously, ticket sales are their number one revenue generator. Maybe a very close second (source of revenue) is the local and national ads they present either in the pre-show slide show, which is going digital in a lot of places, or in the in-lobby advertising displays that they have. With our Media Director they have the opportunity to incorporate local or national ads within the display of the movie trailers or they can actually do ad specific displays closer to the concession stand or over on the side walls where they want to have just a better display for the consumer of all the different local and national ads."

Asked about how Antex developed the Media Director, Foley replied, "We've always been a player in the high reliability professional level audio-video applications. We've supplied products to the broadcast industry, especially the radio broadcast industry, since the mid-'80s and we're a fairly dominant player in those markets. We set out to develop a high reliability, very professional grade appliance that was more of a solution. It included the hardware, the audio, the video, the computer software capabilities, the Internet connectivity, specifically to allow micro-broadcast networks where instead of a single radio tower where everybody hits the same stream our device allows content to be uniquely tailored at each box. Every output node, be in a movie poster or an interactive kiosk or showing trailers in (a video store) can essentially have its own content tailored to that site and who the market is. It was a conscious decision on our part to pursue the full solution market for business applications and develop this appliance about 18 months ago. We've been shipping to one customer in high volume for about four to six months now."

How have theater owners responded to the device? "We've begun the discussions," Antrim told me. "We first introduced the Media Director video applications at Internet World two and a half months ago here in Los Angeles. We did a secondary display at the NAB in Las Vegas last month. So it is in preliminary stages there. We are in preliminary discussions with one of the major advertising resources or distributors for national theater chains. There is interest there. We still have further discussions (to do). The major theater advertising, whether it's national or even down to the local level like Joe's Gas Station around the corner, is handled by this one company that we're in discussions with for entire national chains. They regionalize the local ads and have the ability to regionalize or go national with the national ads. So if Coca Cola wants to distribute solely in California with a specific ad campaign, they can target certain theater chains specifically or they can do a Coke ad all the way across the board across the country. So these guys (that Antex is talking to) take care of all that content. They work it into the in-lobby displays -- from a popcorn bag to a back-lit sign and all the way into the pre-show slide show display that you would watch prior to the trailers."

When things get going, Antrim added, "We envision the back-lit posters becoming active now, becoming actual plasma displays that show trailers with the possibility of throwing in advertising, perhaps the national level advertising, as short 15-seconds maximum (spots), so you don't throw in too large commercials. Another application for theaters is interactive kiosks so that the consumer who is now in there, has bought their ticket and is looking to go see a movie or has just come out of a movie and wants to know what's coming up next can actually go to a kiosk and punch up 'Coming Soon' trailers. They can punch up more information on what's available at other theaters in the area that are owned by the same theater chain. There is the possibility, too, that if there was an ad that they saw in the pre-show or in the lobby that can be part of the entire menu and they could pull up more information on that advertiser. There is the possibility to expand the advertising base within the kiosk along with the trailer information."

The interactive kiosks could wind up not only in theaters, but also in shopping malls. "We're in discussions with a couple people about those as well," Foley said. "We think the biggest and best applications are ones where we take advantage of the multi-media aspects of our hardware-software solution. An example would be expanding upon the idea of movie trailers on demand in a video rental store. When someone goes to a video rental store, they're 95 percent certain to come out with a movie. They've made the decision to get in their car and go there. But the value proposition for the rental store owner is, you make it a more enjoyable experience for the consumer and help them select a movie. So it's not necessarily that you're going to increase sales per customer coming in the store, but you're going to increase your traffic because it's a more enjoyable experience and the returns again with people coming back again and again."

"Every time you go rent a comedy and you try and decide, 'Gee, what will be funny tonight? What am I in the mood for?' and all you have is a title and the back page of the video cassette box or the DVD jewel case telling you what the movie is about (it's difficult to make a decision). If you had the option of actually pulling up a trailer for that movie you'd see a lot more and get your answers a lot deeper," Antrim pointed out, saying it would lead to consumers making a "better educated choice."

Have they nailed down any deals yet with video chains? "We're in discussions with one of these conglomerates about a different application for a movie studio," Foley said. "They're affiliated with a (video) rental store chain. It's very early, but it's an application that both sides see as very useful. We haven't penetrated that yet, but we're in early discussions."

"The company I mentioned (in connection with theater) advertising is part of an umbrella that owns one of the major theater chains in the United States," Antrim added. "They are responsible for all the advertising that goes in there and it becomes a part of that theater chain's decision for the movie trailers, as well. The total display becomes facilitated with our box. It's been fairly recent that we've hooked up with them. We've gotten through the first level. The next level is going through the technical discussions and the best way to implement the box into the theaters."

"There are companies out there that already sell the advertising and distribute it to the various theater chains," Foley said. "So our plan of attack is a value proposition that we provide to them --instead of a static poster now you sell time on a clock with ads to companies or trailers to studios. That becomes a revenue generator as well as the pre-show presentation of ads can instead of just being a local (company) if you get enough of these boxes in a syndicated chain you can then push national ads. Obviously, Coke does it a lot already. You can very push down new nationally syndicated ads to as many theaters as you want so you then have a more powerful revenue generating network of theaters instead of just local sales for ads."

"The box itself has play list software built into it," Antrim said, "which will manage the display, the scheduling of all the content, from that box to its output device -- to the screen or to the kiosk or to the theater pre-show screen. Because the box is remotely accessible from a primary server, any of these boxes can be addressed independently by the main server, by basically a single person who is the content manager at that single server. They can update the content that's on that specific Media Director -- (such as) a single file or they can change the entire play list if they want to or they can pick and choose which ones should stay and which ones should be updated or refreshed or deleted. The advertising company that handles the theater chain does all that advertising creation and distribution from a central point in the United States, from a main corporate office. So they could (work from) their corporate office now and address every single theater that has a Media Director in it with the specific advertising for regional or seasonal timing. They could really personalize the advertising in each one of these theaters."

As for handling the cost of installing such devices, Antrim explained, "There are advertising companies that are creating all this content and distributing it to the theater chains which actually buy all the equipment themselves. They place it in the theater chains as part of the advertising budget, so it's basically amortized in to the total advertising budget. The other option there is that theater chains or video rental stores could purchase these and have them placed in (locations) as a company expense."

"We're six months into it and they're fairly long sales cycles because they're big architectural changes for theaters or video rental stores," Foley said. "I'd say we're about two-thirds into the sales cycle process on several major applications. I think you should expect to see something before year end on several applications. One of the key things about this is that any time someone has to duplicate media, distribute it either with courier, runner or Fed Ex, send somebody out to hang a poster or shove a looping tape in a VCR, that's the perfect target for us. We eliminate all of those processes and expenditures associated with that. And then it can be software from one central location controlling thousands of autonomously running devices and you can have complete control of them without having to do any of that physical distribution or duplication or relying on someone to change your poster or your movie trailer. There's a lot of applications out there like that that we're targeting."

(Martin Grove is seen Mondays at 8:35 a.m., PST on CNN and heard weekdays at 1:55 p.m. on KNX (1070 AM) in Los Angeles.)