By Ty McMahan
Of DOW JONES VENTUREWIRE
As part of an ongoing push to energize its business in the
digital age, New York Times Co. (NYT) will begin feeding its news
headlines to a network of digital screens debuting today in more
than 850 coffee shops, cafes and airports.
The agreement with Reach Media Group Inc., a closely held
advertising company that operates the digital screens, gives the
New York Times a new platform to distribute its brand and news.
Reach Media, in turn, gains premium content that has already
attracted major brand advertisers like General Motors Co. and Yahoo
Inc (YHOO).
"We are very excited because it's part of our mission to get our
journalism out to as many people on as many platforms as possible,"
New York Times Vice President of Marketing Murray Gaylord said.
(This story was originally published in VentureWire, a daily
email newsletter produced by Dow Jones & Co. that covers
venture capital investing and start-up companies.)
As newspaper companies struggle to regain the lucrative revenue
stream they experienced in years past, many like the Times are
experimenting with new ways to distribute and monetize content.
Fewer readers are picking up the newspaper on their doorstep,
making it all the more necessary for news outlets to find the best
ways to reach readers.
The Times has made a major effort to push its work to digital
platforms, forging deals to sell its daily news on Amazon.com
Inc.'s (AMZN) Kindle electronic reader, as well as offering mobile
applications for the iPhone, Blackberry and Palm devices. A version
of the Times was also prominently featured in Steve Jobs' unveiling
in January of Apple Inc.'s (AAPL) iPad tablet computer.
The Reach Media deal is more of a promotional branding effort
than a direct revenue source. The displays, which measure about 40
inches across and hang in sitting areas and above cash registers,
will pull the most recent Times headlines in several news
categories. About four sentences of text from the story will follow
the headlines, which also feature a mobile text code--
NYT2DAY--that takes consumers directly to the full story on the
Times mobile Web site.
The news will cycle on a 14-minute loop that will include banner
advertising around the news, as well as 30- and 60-second
full-screen video ads. Ads will also have elements for consumers to
use their mobile phones to get more information.
"What it means for advertisers is it's an innovative way to
reach people with content that is relevant, but also with
engagement," said Reach Media Chief Executive Garry McGuire.
McGuire said there is no agreement for Reach Media to share
advertising revenue with the Times.
"They see this as a great opportunity to engage in a short-form
digital fashion," McGuire said. "They believe it will drive
newspaper sales and subscription sales."
The New York Times's Gaylord declined to discuss any financial
goals associated with the experiment.
"We are channel-agnostic," Gaylord said. "Today, people are
consuming news and information in the way they want to do it. Even
if you're standing in line waiting on your bagel, you can look up
and see the latest news and information."
The network will launch in New York, Boston, Chicago, Los
Angeles and San Francisco and will expand to 1,200 locations by the
end of the year. McGuire said at launch, the screens will generate
views from about six million people, creating about 10 million
advertising impressions every month.
Reach Media, which is backed with venture capital funding from
Kleiner Perkins Caufield & Byers, operates about 47,000 digital
screens total. While the Times will be featured only on 1,000
screens, those displays are expected to represent one third of the
traffic for Reach Media.
Reach Media also operates two networks separate from its
agreement with the Times. A "Business Traveler" network targets
affluent business travelers at more than 150 airport retail
locations nationwide and more than 7,800 seatback TVs on JetBlue
(JBLU), Frontier and Continental Airlines (CAL). A "Health &
Fitness" network broadcasts to fitness enthusiasts in more than 700
health clubs.
The agreement with the Times replaces content distribution
agreements with the Associated Press, the San Francisco Chronicle
and the Weather Channel. Those companies couldn't immediately be
reached for comment. The Weather Channel is owned by NBC Universal
and private equity firms Bain Capital and Blackstone Group
(BX).
-By Ty McMahan, Dow Jones VentureWire; 212-416-2032