Episodes
Wednesday Jan 03, 2024
Meghan Athavale, LUMO Interactive
Wednesday Jan 03, 2024
Wednesday Jan 03, 2024
The 16:9 PODCAST IS SPONSORED BY SCREENFEED – DIGITAL SIGNAGE CONTENT
Interactive floor projections and video walls have been around for well more than a decade now, but there hasn't really been widespread adoption for a bunch of reasons - like cost, complication and the simple reality that a lot of what's been shown to date hasn't had much of a point.
A Canadian company, Lumo Interactive, is in a nice position to change all of that. The hardware is simple, the software is affordable and scalable, and the solution comes with some 300 templated content apps that help users tune the visual experience to the needs of the venue and audience. Instead of visual eye candy, these apps are things like fun, engaging games.
The straightforward pitch for the product, LUMOplay, is that the software can make any digital display interactive. The top-end for the software side of the solution is $74 US a month, so it is very affordable. And the developers have put years of work into ensuring the set-ups are hyper-stable and can be managed remotely. We've all walked through flagship retail spaces and seen one-off experiential set-ups that were hung up or sitting unused because they were more about short term bling than ongoing usage.
The other interesting aspect of LUMOplay is that the main intended use-case is classrooms, with these interactive pieces used as a way to engage kids in schools, particularly kids who have sensory issues, autism or ADHD.
I had a great chat right before Christmas with Founder and CEO Meghan Athavale.
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TRANSCRIPT
Meghan, thank you for joining me. Can you tell me what LUMO does, and is LUMOplay the product and LUMO Interactive the company?
Meghan Athavale: Yes, LUMO Interactive is the company, LUMOplay is the product, and what we do is we make it easy to scale large-scale interactive digital experiences. These are experiences on digital displays that react either through motion, touch, or gesture.
Okay, this would be everything from something on a video wall to something on the floor, and a lot of digital signage people, if they've been around this space for a good long time, they may recall through the years seeing “activations” where there's a floor projection. I remember there was a company called Reactrix back in the mid-2000s that was doing this sort of thing. So it's like that, but I'm sure a lot more advanced and different, just because of the years and technology.
Meghan Athavale: Yeah, it's pretty much exactly like that; where it comes from the days of Reactrix and the early days of companies like GestureTek and Eyeclick is that we've moved more towards a software-only platform.
When this technology first hit the scene, you needed to have special hardware. You couldn't just go down to Best Buy and buy a 3D camera. Now that the hardware is more ubiquitous and more affordable, it's possible to have a hardware-agnostic, software-only solution, and that's what we are.
So this kind of, to borrow a phrase, democratizes this whole thing in that in the old days, it would have been incredibly expensive and complicated to do, and now it's not, right?
Meghan Athavale: That's right, yeah. I think we also just have multiple decades of information about what people are using this technology for so we're able to templatize a lot of the experiences so that companies don't need to have development teams in order to make some of these simpler interactions, they can just do an asset swap.
It's the natural progression of a lot of these things where websites used to be hand-coded and then we went into WYSIWYG and then we went into systems like Wix and Squarespace. We're like the Wix or Squarespace of interactive digital displays.
So if I want to do an interactive digital display, it's like me using WordPress and buying a theme?
Meghan Athavale: Yeah, to a certain extent, exactly.
So you guys have done all the heavy lifting, so to speak, in terms of the backend coding, how everything maps, but also, I think I saw there were something like 200 different apps in a library?
Meghan Athavale: Yeah. There are 300 pre-made experiences, which they're constantly turning over. So we have some in there that have been there for 10 years that we will replace with something new. We're constantly rolling over those apps, and we take requests from our community, and that's one of the things that our business model gives us the freedom to do because we're not reliant on selling hardware and our community is very vast. We represent everything from education to large brands. Our community can make requests for new apps and we'll just make them and add them to our market. So we don't have the restrictions of having to charge through the nose for custom content development because we've developed these systems that make it very easy to pump out new content, and then the other thing that we offer as far as content goes, like out of the box content is we have an SDK for the companies that do have in house developers, and then we've got a number of different templates. So you can just say, I want to make a Koi Pond, and I want to throw my business's logo behind it, and you could whip something like that off in five minutes.
So are the templates purely done in-house or do you have third-party designers who are contributing?
Meghan Athavale: That's a great question. At this point, they're all done in-house. We are working towards outsourcing a lot of our content development just because it'll give us a wider breadth of content and make that content more available. We're just at the very beginning of seeing rollouts that are large enough to make joining a third-party content development team attractive.
We see this in gaming consoles all the time, where you'll have a new fantastic console that comes out, it's low cost, and they're trying to get game developers to create games for that console, but unless thousands and thousands of people have that console and are buying games for it, it's not really worth making a game for it so we're at the stage where we're starting to see enough of a widespread and permanent deployment of systems running on our platform that it makes sense to have those conversations with third-party development teams now and we're starting to have those conversations.
Yeah, I wanted to ask you about scale because one of the particularly compelling things about your company and your offer is cost, in terms of, it's not very expensive at all to use this.
Can you walk through that and not really how the financials work, you're not charging a lot per instance of this on a monthly basis, so you need to have a lot of them out there, right?
Meghan Athavale: Yeah, that's right. We still make a percentage of our revenue on five or six big custom projects a year. I would say that our MRR represents about half of our revenue. The goal is to reach a point in scale where we can just focus on the platform, but I do get asked pretty frequently why it costs so little.
There are a couple of reasons for it. The biggest one, I think, is just we want to make this, as you mentioned, democratizing the technology, we want to make this technology available and affordable to schools, that’s our primary business goal. I and my business partner, our moms were both special needs teachers, we've seen firsthand the struggles that teachers and educators have in getting technology into their classrooms they need it for kids with sensory issues or children with autism or ADHD, and we've seen how effective interactive digital displays can be in those environments, particularly for things like increasing social skills. A lot of these kids come in, and they're really stuck on screens. They're very stuck on virtual experiences, and so it becomes a bridge, where they can engage with one another and with their teachers socially while still having that digital feedback.
It's just very important to us that our pricing reflects our values as a company and that's one of our core values is making this accessible for education, but the other is that we really don't need to charge a lot for what we want to do. So at this point, our company's main work on the platform is around supporting hardware. So, as new devices come out, we're adding support for them so that you can download our software and you can plug in any of the commercially available 3D cameras, and it'll automatically recognize and calibrate that camera for you and take out the computer vision steps and specific requirements for each individual device, like DirectX. I think that would probably be the closest analog, you want something that you can plug and play regardless of which device you're using to achieve the tracking. So we want to focus on that.
We also want to focus on the tools that allow people to scale these projects to multiple locations. If you have an interactive display in a flagship store and you want us to put it into all of your stores, the step from running your proof of concept to scaling it to a hundred locations is very simple using our platform, and it's because we're constantly pushing updates and we do health management, we have a content management system, and those are the things that we want to focus on the long term. We don't necessarily want to focus on developing the individual games. We want to make the game development stuff as easy for other people to do as possible because we don't have all the ideas in the world, but we are really good at making sure that other people's ideas continue to run and don't go down.
Just so people understand, your top end cost is, if you work it out on a monthly basis, it's $74 a month, right?
Meghan Athavale: Yeah, that's as high as it gets.
If I'm an agency and I decide I have a beauty brand client that wants some sort of activation that's an interactive floor or wall or whatever, that's going to cost like five-six figures probably, right?
Meghan Athavale: Yeah, I mean, the part that determines the cost of any of these installations is the hardware you choose to use. If you're a brand and you're developing the content from scratch, maybe hiring our team or hiring a third party to develop custom content for you, there may be 3D modeling involved, there may be compositing, you might have multi-level programming, you might have second screen experiences, so all of those things add up.
But we can generally, when somebody comes to us and asks for a ballpark estimate, the only thing we really need to understand is where it is going and what kind of display you are planning to use, and we can generally come up with a range.
But if you're doing it, it's going to be a fraction of what it would cost if you just went to an interactive agency and said, “Build this, please!”
Meghan Athavale: Absolutely. But I think that something to keep in mind is that if you're going to an interactive agency and you don't have an idea yet, you're likely going to pay less. If you go to an agency and what you're paying them to do is to figure out what the activation actually should be, we're not an agency, and so we don't position ourselves as somebody that's going to do a lot of things like research and problem-solving. But what we can do is scale that.
You’re not Moment Factory.
Meghan Athavale: We are not and we don't want to fill that niche because it's a different skill set and it requires the ability to experiment with things on a one-time basis.
You may develop a solution for a brand or a display for the Super Bowl or something like that, where you're using a specific set of hardware just one time, and that's fantastic. I love that there are agencies in the world that get to do that, but that's not what we do. We look at it and go, how do we make this happen a thousand times, and that's a very different way of looking at things. So I think, if you want something that already exists, and you just want to put your stamp on it and create something that gives it a unique feel for your brand or experience, that's where you come to us. If you want something that's never been done before in the entire world and uses new technology that hasn't been proven long-term in the industry. TeamLab, and Moment Factory, are where you would go, but it is a lot more expensive for sure.
You're starting to use things like LiDAR and everything else.
Meghan Athavale: Yeah. The risk is just so much higher, and you need people on the ground. You need to roll a truck if something goes wrong. However, with our systems, we're way past that point.
Yeah, because you've got the device management designed for scale and everything else, right?
Meghan Athavale: Yeah, we don't release anything into the market that hasn't been tested thoroughly in our labs for months and months at a time. We have the ability to guarantee things, whereas in some of these riskier projects, as long as you hire somebody that knows what they're doing, they're going to find a way to make it work, but they're not necessarily going to be able to tell you how from the beginning of the project.
So, for something like a classroom, what's the kit of parts, and what's the degree of complexity to put this in?
Meghan Athavale: Most classrooms either have an interactive floor, an interactive wall, or both.
Already?
Meghan Athavale: No, that's what they're putting in, and it's basically the same technology for either. We designed our software so it works with any projector, and a lot of classrooms already have projectors, so they'll just use what they have. So you've got your display, which in classrooms is typically a projector, a 3D camera, and a Windows computer.
We typically recommend that people use the sort of baseline specification on our site as an i5 or equivalent with a decent graphics card, you don't want something that's not going to be able to run games because that's basically what we're running, and the cost is usually like for including the projector for a classroom is usually around $2,000-2,500.
To set that up, is it the sort of thing that the school district or the schools, IT person, or people have to do, or is it simplistic to the level that if a teacher already got a projector pointed at a whiteboard of some kind, they can just do it themselves?
Meghan Athavale: So teachers can do it themselves, and we often help teachers do it themselves. But nowadays they're busy. Teaching is not an easy career right now, and we're typically dealing with the IT personnel for an entire division when these installations are going in.
If you're dealing with a full division or district, are they rolling out like that, or is it still onesie twosies?
Meghan Athavale: It's usually one per school across an entire district, is what we're seeing, and that's mostly in the U.S. We haven't really seen nearly the same traction in schools in Canada yet.
I didn't say at the outset, but you're in Montreal.
Meghan Athavale: Yes, that's right.
Why do you think that is just because of the way education works in Canada versus the US?
Meghan Athavale: I'm not entirely sure. I know that it's like that in all of our verticals. So it's not just education. I would say retail, events, and all of the verticals that we serve, we have faster pickup and larger rollouts in the US. It could be the population just much bigger.
I think we're just not risk takers, and I also think, to a certain extent, we're limited by things like weather and the accessibility of venues to having these types of, there are a lot more venues in the US that have built-in walls or built-in interactive components that we can just hop our software onto them. I don't think there are as many opportunities here.
You mentioned, in detail, education; what other vertical markets or segments are you seeing a lot of activity in?
Meghan Athavale: Events is the fastest growing segment, and this is like events of all different sizes and lengths, so it could be something that is like a week-long trade show, it could be like a birthday party for kids. It could be somebody who is a DJ, and they're bringing an interactive floor to all of their gigs.
It's really all over the map. We just did a pop-up in Times Square for a major chocolate brand. We've done interactives for movie launches, so like those short-term events where they're developing their own special content and it's on for less than a month, I would say that is our fastest growing vertical.
Interesting. We talked a little bit about planning before we turned on the recording, and I'm curious about how these things get planned out and how you ensure and how your users ensure that what they're putting up gets beyond just being eye candy/wow factor stuff because I often say that wow factor has a short shelf life.
Meghan Athavale: Yeah, and I absolutely agree with you. I think there has to be a balance between the cost and the reward of experiences like this. One of the biggest mistakes that we see people making is they'll see something on the internet, they'll see something in video format, and they'll think, I need that at my event, or I need that in my museum, and they'll skip the part of like why they need it.
It'll be entirely like an emotional decision, and the challenge here is that there are so many more and more faked every single day. We get sent videos all the time with people asking us to do anamorphic illusions. People will see videos of that, and they'll be like, “I want that but interactive, can you make it?” And because they're seeing a video and the video is staged, and in some cases, the video is a complete composite. It's not even something that actually happened in the real world, they won't understand that it doesn't work from anything except for one very particular perspective. So, the person who's interacting with anamorphic content is not going to see what the person watching from across the street on a particular street corner is going to see, and the same thing with large-scale digital displays.
People will see these huge LED walls, and I think you saw this at our booth at LDI. When you walk right up to a big LED wall, you see the individual pixels, not the same image that somebody is watching from far away, so I think that those limitations are very difficult for people to understand and appreciate unless they've actually seen the installation in person. So I would say if you see something and you're planning to put it in an event, you're planning to use it in brand activation, go see that experience in person first. Don't make a decision about whether or not you need it until you've actually personally experienced it because seeing it on a video is not the same thing as what it's going to look like in real life.
And then the other advice that I give to people when they come to me with the wow factor criteria is like, what do you want the takeaway to be? Is this a shareable thing? Do you want a hundred people to come to your event to put up a hundred different videos and tag you in them? What is your metric for success? Because if that's it, then the content's going to be very different than if you want a hundred people to enter their emails in order to play a game or you need to know at the end of the day what you're walking away from after you've put that activation in place.
I've seen different iterations of this stuff. The applications in classrooms, I think, is fantastic and it plays to kids at their whims and everything else; they want to be involved. I find it's quite different.
A lot of the ones that I've seen in public spaces like shopping malls and so on, where you see the kids running around doing stuff, interacting with it, but you don't really see the adults, and that's fine if it's aimed at kids. But I wonder sometimes, when brands do these things, that the only real interest is with children and adults saying, “I'm not doing that, I'm not an extrovert. I don't want to do this trickery in front of other people.”
Meghan Athavale: Yeah. I think that's a very fair point. One of the things that we noticed when we first started putting particularly interactive floors into retail spaces was that we still have an entire generation of adults, and I would count my own generation in there; we've been trained not to step on screens like it's your impulse isn't to go running through the light. The generations who are comfortable with that and who grew up with touch screens and expect everything to be interactive, I think they're in their twenties and early thirties now, so we are seeing that change quite a bit. I would say that from about 35 years down, we aren't seeing that hesitancy to interact with things, but I do think that we still have a long way to go in discovering how the content can be used.
A lot of times, it's to augment like physical experiences is how you get adults to engage think like axe-throwing. Adding really cool interactive graphics to an axe-throwing experience is something that's going to really delight an older crowd. Same thing with bowling alleys, making those interactive. So I think…
So they're becoming Wii games.
Meghan Athavale: Yeah. I think a lot of the time, people think that there's a choice between virtual experiences in VR and physical experiences like you would have with a traditional family entertainment center. But what our software allows you to do is combine the two, so you have a headset-free experience that does have digital interactive components, but you're also engaging with something physical. So we do a lot of Air Hockey tables, pool tables, and things like that where you're still playing pool and using physical paddles, but there are interactive digital visual elements on top of that. That's where we're seeing unquestionable pickup by older people.
Yeah, so where there's tangible fun or some sort of activity versus so often when I've gone to trade shows, if I see some sort of an interactive video wall thing, please walk up to this thing and dance in front of it or wave your arms, and there'll be light particles and that's nice, but I don't see the business case here, and I don't think it's interesting for more than 10 seconds.
Meghan Athavale: For sure, if you're in an environment where you're dancing anyway, having cool visual effects while you're dancing is like a good bonus, and I think that's how we have to think about it in terms of engaging an older audience, is you need to be augmenting something that they're doing anyways.
You can't expect them to do an activity that they wouldn't normally do just because it's like eye candy. But if they're doing something anyway if they're already in a curling league and you can make their curling more fun…
We’re getting really Canadian here.
Meghan Athavale: Right. I mean, I'm available for anyone who wants to try that. I've done soccer, I've done hockey, I haven't done curling yet. I would really like to make an interactive curling experience. But yeah, that’s where you attract adults by helping make something that they want to do anyway, much cooler.
Where did this come from, like why did you start this company?
Meghan Athavale: This is a very existential question. It's actually a pretty funny story. We started the company by accident. My co-founders, Keith Otto and Curtis Wachs and I, all worked at an agency together, and this was like 2010, back in the days when Instructables and a lot of those sorts of YouTube channels were just starting, and we started hanging out after work and just making stuff and it was all things that we would never get hired to make. We were designing our own touch screens. We created our own mist screen for projection. We did a lot of building projections and it was all for fun. We saw other people doing it all over the world. We thought it was really like a fun hobby. We started throwing parties to show off some of the things that we were making, and a friend of mine, Kayla Jeanson, who is an incredible videographer. She also has moved out to Montreal. This all happened back in Winnipeg, which is where my company is based.
So we're all back in Winnipeg. Kayla shows up at one of the parties. This was before Facebook, so it was an SMS-controlled wall where you were sending text messages, and it was making things happen on the wall. She took a video, and that video ended up going viral. We found out about it after the fact, and we started getting contacted by different businesses the University of Nevada, Reno reached out and said, “Hey, we'd really like to have something cool like this in our cafeteria.” and Curtis and I just looked at each other, we're like, wow, people will pay us to do this. We registered a business, and we all quit our jobs. We applied for CMF funding, and we launched as an agency designing these interactive experiences and, within the first two years, realized that the biggest challenge was once the experience was in place how do you maintain it? How do you make sure that it's going to continue running?
And that installation that we did back in, I think, in early 2011, in the cafeteria in Reno is still running, and part of it was just like starting by accident because a hobby that we were doing for fun led to some economic opportunities for us and the direction that we ended up taking was as a result of people liked what we did long enough to want to keep it running, to want to keep having us continue updating it. We've had a number of large-scale installations. There's one in Red Rock, Ontario, where they've done entire refreshes. We did our original installation for them in 2011 as well and just very recently replaced and updated a bunch of the software for them. The validation has been there, so the thing to focus on is how to make these experiences last, not how to make them cool for a week.
The company is quite small. I believe it's just like a handful of people, right?
Meghan Athavale: Yeah. That's right. There are four of us.
And that's all you need to be because you're not getting into the weeds with the hardware, and I think you sell the hardware that you have through a reseller, Simply NUC?
Meghan Athavale: Yeah, we have a number of resellers, but Simply NUCis our preferred partner because they send us everything that they're selling so we can test it 24/7. So we're able to say with high confidence that anything you buy from Simply NUC is going to run long-term with our software.
I would like a bigger team. In all honesty, we had to let a few people go during the pandemic. I think one year in, we were like, okay, we're not going to be able to sustain ourselves with a larger team. So, I think we'd like to see some growth in the team within the next year or so. Because of the way that we've built our platform, we're able to outsource stuff that we can't do where we don't have enough work to bring somebody in-house for long periods of time, and there are also just amazing resources out there for outsourcing, now that didn't exist when we first started the company.
It's a small team. I don't anticipate that we'll ever be much more than 10 people.
But a few more wouldn't hurt.
Meghan Athavale: Yeah, a few more wouldn't hurt. I'd like to build in a little bit more redundancy, and I'm getting older, and one of these days, I'm hoping that there will be some sort of a succession.
Because of the relationship that we have with our resellers and our installers, there's really not a lot of mission-critical stuff on our side. We push our regular updates. We create new content and respond to community requests and stuff. But not a lot of the work that we do is like on a deadline. It's a pretty chill working environment where we identify things that we think are going to be of value to the customer, and then we ask our customers, and then we build the thing. There's no pressure.
And there's also a knock on wood at this point: not a ton of competition because it's still a very niche market. We don't feel the pressure to be like the trade show that you and I met on; it was the first we've been in business for 13 years, and that was the first time we've ever done a trade show exhibit.
Oh, wow, and what was your takeaway from that?
Meghan Athavale: It was great. It was definitely time. We came away with quite a few new customers, and it was LDI. The reason we chose LDI as our first trade show is because there are so many companies that do events, and the total lifetime value of customers in the event space isn't as high as education would be or something where it's a permanent installation. There's just a lot more of them, and it's a lower-hanging fruit. We're hoping to bump up our revenue enough so that we can start expanding our team sometime mid-next year.
Do you have a reference case or a handful of reference cases? If people said, this sounds really cool. I can't really just walk into a classroom, obviously. Are there museums or public spaces or something like that where I could go see this?
Meghan Athavale: Yeah. There are quite a few.
What we usually ask people to do is if they want to see an installation of ours in real life and they aren't able to set it up themselves, just contact us, let us know what city you're in, and we'll find somebody in your area that you can go visit. There are a lot of live public libraries and museums and buildings that are open to the public that have installations in them, and then the other thing that people can do is we have a free evaluation version of our software that you can just download and install.
So, for people who are getting into this on a commercial basis, it's a really good idea to set up a system for yourself, test it out, and play around with the tools. Don't pitch it to your customers until you've tried it, please!
So we make it possible for people to just install it for free and play around with it before they make any sort of purchase before they make any representations to their customers about what it can do.
Okay. All right. So, if people want to find you online, that's LUMOplay.com, right?
Meghan Athavale: Yep. That's right. LUMOplay.com, and if you reach out through the site, you will be talking to me. My name is Meghan.
All right, Meghan. Thank you very much.
Meghan Athavale: You're very welcome. Thank you, Dave.
Friday Dec 08, 2023
David Thomas, BudSense
Friday Dec 08, 2023
Friday Dec 08, 2023
The 16:9 PODCAST IS SPONSORED BY SCREENFEED – DIGITAL SIGNAGE CONTENT
When cannabis started being legalized in US states like Colorado, and more recently across Canada, it struck me that it was a very interesting new vertical for digital signage companies to chase - because it was a greenfields industry that had retail environments offering up products wholly unfamiliar to a lot of the people walking in the door.
It's grown pretty clear, though, that while there may indeed be big long-term opportunity, cannabis retailing is also a very complicated industry - with rules and regulations changing by jurisdiction, a whole bunch of vendors and SKUs, and widely variable supply chains.
While there might be a common perception that getting the OK to sell cannabis is a license to print money, a lot of operators are struggling financially, and both retailers and the tech ecosystem underpinning cannabis are coming in and dropping out all the time.
A Canadian company called BudSense has a particularly interesting story to tell. The company, based in Regina, Saskatchewan, started out as a retailer, but found its way into technology to fill the gaps in what they needed to effectively manage stores and communicate to customers.
Now, software is the main business, and BudSense has a SaaS software product that is all about managing menus and other screens around dispensaries, and is very specifically tuned to cannabis retailing - as opposed to general digital signage software that could also drive cannabis store menus.
Canada has been the main focus to date, but co-founder David Thomas says BudSense has business in the US, and plans to grow that.
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TRANSCRIPT
David, thank you for joining me. Can you tell me a little bit about BudSense?
David Thomas: Yeah. Thanks for having me, Dave. BudSense is a menu merchandising company in the cannabis industry. It solves the problem for our retailers of menu management.
And are you focused just on menus or are you doing in-store promotion, all kinds of other things within these dispensaries?
David Thomas: Yeah, we do some in-store promotion tool sets as well, pretty much anything that involves merchandising is the solution that we want to solve.
Your company's in Saskatchewan, right?
David Thomas: Yes, we're based out of Regina, Saskatchewan, where we got our start in dispensary operation.
So when you say dispensary operations, you mean you're actually running a dispensary?
David Thomas: We were, and we still are. I partnered with my brother, John, around legalization in Canada. We started by running four stores in Saskatchewan. We've since sold those stores and moved on to other retail footprints but that's when we started developing the software that is now BudSense.
What set you down that path? Because being a retailer is very different from being a software company?
David Thomas: Absolutely. So I have a background in engineering. My brother has a background in pharmacy. We actually started our business partnership before cannabis in real estate and we have an entrepreneurial spirit. We were always looking for opportunities and when cannabis was announced for legalization, we saw it as a once-in-a-lifetime opportunity and we wanted to participate so that was the catalyst that pushed us into the cannabis space. We went into retail because of our real estate and pharmacy background.
I have a lot of experience running teams and building systems. So we just put our skill set to use in a brand new industry.
So did you write your own software to run your store and that's what got you down the path or was it the absence of good software to do what you needed?
David Thomas: It was both. We solved whatever problem was directly in front of us. So it wasn't like we wanted to solve digital menus. It was more of a necessity and then we had the skillset to do it in that way. So when we started, we had four stores to run and that's very atypical from a normal business where you start with one and then progress if you're successful.
So from day one, I knew that we needed a system to manage merchandising from a central location. So we could know what was happening in the stores and there were some solutions on the market but they were pretty flimsy at that point and we just felt more comfortable building our own.
So, that's where we started down the path of digital menus.
At what point did you decide that you'd rather be a tech company than a retailer?
I think the perception when cannabis was legalized in Canada was if you managed to get permits, particularly in those provinces where they allowed for private operators, it was a license to print money.
David Thomas: Yeah, absolutely. The markets are very interesting with cannabis. I've watched them develop in our region, in the U.S., and other places and that's certainly the perception from the outside looking in and that happens a lot in an early market, whereas some of the permits are protected and ours were in the early days.
We actually sold what turned out to be the peak of the market which was an excellent catalyst for our next chapters. So now a lot of the markets in Canada are oversaturated. I've heard numbers thrown around something like 70% of dispensaries in Canada are unprofitable and that has to do with market saturation, but it also has to do with operations being a little bit bloated and not really having the efficiency needed.
BudSense is focused on driving some extra revenue but also tries to make sure your costs are under control and you're running an efficient operation.
I've also heard a number of times that the big challenge of a lot of the people who get into launching dispensaries is they know they're cannabis, but they don't really know retailing.
David Thomas: You've hit on something really interesting because even if they do know retail, which is very rare, cannabis is different. So you have this situation where no one has the perfect skillset so it's going to take innovation and learning regardless of what your background is because it's new and it has new problems.
So what happens is, regardless of your background, you go into it, you start trying things and if you're not mindful then your first go at it isn't going to be perfect. You're going to need to change your strategy. That's where people get into trouble with switching costs, with building systems that aren't necessarily malleable enough to change. So there's a ton of different backgrounds. Some people are more experienced with the product. Some people are more experienced with retail. Some people are more experienced with purchasing. It's really interesting because you essentially have to lean on your strengths while understanding your weaknesses and kind of build the business that way. There are a lot of different paths to success in cannabis and we see that with our different customers of BudSense where there's not one way to do this but it is challenging regardless of what your background is.
One of the big challenges that I've perceived is how things are licensed and regulated changes by jurisdiction. So for instance, In Saskatchewan, where your company is based, it sounds like it's privatized. Where I live in Nova Scotia, it's run by the Provincial Liquor Corporation. So it's very much regulated and I can go in and buy a bottle of wine around the corner and buy whatever you buy there, I don't terribly know but it's all incorporated and much more heavily regulated perhaps than in a private situation and I guess it's the same in the states where it can change state by state.
David Thomas: Yeah, you've hit on another one where it's interesting because your operation depends on the municipality (based on zoning) and the region you're in because one of the most important parts of it is your location and how protected it is from other competition, and then your purchasing is different based on your region. But one thing that we excelled at is it's very simple. We read the rules, and we read the regulations, and we understood them. And a lot of other times people would go in based on what they're doing in the U.S. or what they're doing in another market.
The problem with that, like a concrete example, was when we opened our stores in Saskatchewan, we didn't have a security guard at the front door because the regulations didn't say you had to, we were treating our customers as customers and a lot of people looked at what the U.S. was doing and they saw these security guards at the front door and they didn't necessarily understand the purpose of the security. The security guards were there because it's not legal federally. So it's purely a cash business and the insurance is extremely expensive. So when you have a cash business, your store is filled with cash, and it's a target for crime. So for those reasons and the illegality of it at a federal level, that's why the security guard is there. But when you read the regulations, there's no reason for one.
So it's little things like that where if you're not focused on the details of the regulations and respect the regulations, it's really hard to create a dynamic business without understanding them.
So if I'm a cannabis dispensary and I've just opened up, or I'm about to open up, and I determine I need digital menu displays and I would like some promotional displays as well, could I just use any old digital signage CMS software to run the store or would I be just buying into a whole bunch of work that I don't need to?
David Thomas: It depends how large your organization is and it depends how highly you value your menus. If it goes back to our conversation earlier, what is your skill set what do you value and how are you going to create value in your business?
If you're willing to enter all of your product information daily and keep it up to date on your menu, which some people do, there is a viable reason to do that if you want expanded information that says something BudSense doesn't offer. If you want a clean, tight operation, that runs your menus a little bit more efficiently and automated, that's where BudSense really starts to shine. BudSense manages scale really well. So you may be able to have an owner-operated store that uses a chalkboard that understands every product that's coming in, but when you get 5-30 stores under a banner that falls apart really fast. It again depends, but like we offer some powerful menu solutions that go beyond that kind of out-of-the-box, digital signage stuff that you're referring to.
And from what I understand, there's a whole sort of technology ecosystem focused around the cannabis dispensary business, including point of sale systems, information systems, inventory management systems, all that stuff that maybe you would never find in an apparel store or hardware store or something like that, but it's tuned to cannabis. Is that accurate?
David Thomas: It's very accurate and I'm fascinated by it because I think it's partly to do with our time in modern technology, where if hardware stores were legalized today or if hardware stores were invented today, I believe they would have a stronger tech ecosystem. I believe that we're using tech in cannabis more so than in other verticals at the start of their run because it's available to us and it's helpful.
That said, the nature of cannabis and the instability of the supply chain leads really well to these niche products. You mentioned point of sale, and for example, there's a seed-to-sale regulation needed where you're monitoring individual products from the time that they're grown to packaged, delivered to the store, accepted at the store, to sell to the customer, meaning seed to sale and that regulation is over and above most just out of the box point of sale systems, so that's why.
And that, again is down to the region. So these point-of-sale companies have to change their technology to support region-by-region regulations based on that seat to sell tracking and other things.
Wow. So it gets very complicated.
David Thomas: It does. It is certainly a unique set of challenges, and it's a really early stage too. So a lot of these challenges and underdeveloped technology fall on the lap of operators, and it's challenging.
As a tech provider in this ecosystem, is it challenging to get to scale because you've got all of these operators and as you said, 70 percent of them maybe aren't profitable, so they come in, they come out, they're cash constrained, and everything else?
David Thomas: It is challenging.. That being said, this is my first software-as-a-service company that I've built so I'd imagine that it's always challenging, but I do think it's particularly challenging in cannabis.
That said, I think it requires the right approach for this industry, and it's back to what I was saying, where just understanding the rules and, as you said, understanding the conditions that these operators are trying to run their business in is really important. For those reasons, we spend all of our capital on the product. A lot of our competitors spend more on sales than we do. And the reason why we spend on products is because exactly what you're saying, there's a lot of problems to solve and if people are going to go to business, I don't really value early market share that much.
That being said, it lowers the revenue that we can create out of the bat, but I feel like focusing on the product and focusing on trying to help our customers create success, drive revenue, and clean up their costs. I feel like that's a winning formula long term. It's just a little bit rocky at the start.
And where are we in that sort of evolution of the industry? Did legalization happen 10-plus years ago in Colorado?
David Thomas: Yeah, 10 years ago, Colorado. Five years ago, Canada. The Colorado legalization, like the legacy in the US, is interesting because they've been in an eye on an island.
So, tools such as BudSense haven't really hit them. They made do with what they had, and it created interesting market conditions. It's all in the US, also I don't think they've seen the growth and consumption expected and that's because without federal legalization they really won't see that three decade increase of consumption that we're expecting and when you go nationally legalized like Canada would see. But yeah, where are we from a tech standpoint overall? I think we're really early. I don't think it's been proven that a point-of-sale system can have international dominance.
It still seems to be region by region. I don't really think many people have realized how taxing regulation is on technology. For that reason, BudSense is what I call decoupled from the transaction, and this is counter to most traditional tech thinking where you want to get as close to the transaction as possible because that's where the money is but in cannabis, that's also where the regulation is.
So, by decoupling from that, we can spray it a little thinner and build solutions that are easier to scale across the entire industry. So industry as a whole, I think we have a long way to go. BudSense is making pretty significant strides in building powerful tools that take some of these retailers out of the dark ages, of the challenging period of cannabis retail.
And some of the surf riders have come in and out of the space as well or you contacted me because one of them was basically backing out of the digital signage.
David Thomas: Yeah, I've seen a lot of significant decisions of pulling out, coming back in, investing, divesting. It's tough for me to speculate, but yes, our main competitor in the US has dropped out of digital signage in the cannabis industry.
And you're speculating again, but I'm curious: why would they do that? It strikes me as if you get into something with them, then you've got recurring revenue.
David Thomas: Yeah, my best assumption is, first of all, Enlightened was purchased by a company called Weedmaps, which I believe is the largest Cannabis company in the world. So they had a larger parent company, and when a larger parent company is involved, and you're dealing with a subsection of that company, who knows what could have possibly happened?
But what I see time and time again is even a dominant player like Weedmaps, likely doesn't understand the whole scope of the cannabis industry. They get their part really well, but they don't necessarily understand the retail part or the cultivation part and the individual challenges that come with it. So when they think of digital signage, they're probably thinking of it as simpler than what BudSense has, and when you bring a simple solution to a really complicated environment, it's really tough to maintain and scale. So there's a chance that they're making the right decision for them, whereas that recurring revenue that they might have on their balance sheet, maybe it's not sustainable. And again, I don't know, but those are some assumptions that I could make to the decision.
Of those retail stores, dispensaries, whatever you want to call them in Canada and the US, are most using digital screens in some way or are some of them still analog?
David Thomas: It goes in trends. Canada has a higher digital percentage than the US. A lot of stores don't use menus at all because they just completely simplify the problem and use their Budtenders to communicate directly with the consumer.
But that gets challenging in terms of volume and staffing, right?
David Thomas: So many things, because then now you have personal bias too and your consumer, they don't necessarily want to get all their information from the Budtender. Some people love it. Some people don't like it.
I think one of the missing pieces in that ideology is that the menu isn't just for the consumer. It's also for the Budtender so that they can use the menu to discuss purchasing options together. With cannabis, there's a lot of information to process, and I think that some operators, they're around it all day, every day, and they lose sight of what it's like for a consumer to come into the store and just absorb and consume all of this information.
And what menus really do is help structure those conversations, regardless of how you see the customer journey happening, I think you're missing out if you don't have a well-thought-out merchandising plan. That said, if you're dealing with something that's inefficient and doesn't really work that well and it requires more headache than it's worth, there's a great argument to not do it at all.
If you're not able to do it well, don't do it at all. That is a methodology that I subscribe to for other parts of the business. So why not menu management?
Yeah, that's a long-running story in digital signage.
A lot of venue operators, whether they're retailers or QSR or whatever, invest in the technology. They invest in the original content load, and then it just becomes an orphaned bunch of screens that never get updated.
David Thomas: Yeah, I see that all the time, and then it's just in the background, right?
We see that in our sales cycle too, where our potential customers are using another solution, it might just be collecting dust in the background but when they see our software, they're more like, oh, this exists. This is out there to help me manage my menus and make it a little bit more meaningful. So it's fascinating. There is a difference in ways that operators manage menus, whether you're talking about ‘No menus at all’ or poorly managed menus or something more along the lines of BudSense.
Yeah. I was excited by the prospect of digital signage in cannabis retailing because you would have a whole wash of consumers who would be walking into these stores for the first time, completely unfamiliar with the product, and maybe a little bit uncomfortable because they don't get it. They don't know what they're buying. They don't want to be sold stuff that's overpriced or whatever.
I saw digital signage as a way to help educate, drive awareness, and streamline operations. But I hear a variety of stories, including from you about how well that works.
David Thomas: Yes, it's fascinating, right?
I think back to legalization and what consumers' expectations were of the store and what we had. They came into our store on day one, and we had 8 products for them to buy, like edibles weren't legal, we didn't have pre-rolls because they weren't legal and it was just in a lot of ways disappointing.
And when you look at it up close, it feels like a struggle. But when you resume the way out, I see a 30-year improvement cycle where we're getting better at this, and we're starting to pull consumption away from alcohol and towards cannabis, and I think that a lot of operators are a little bit too close to it where they don't see these new customers coming in because it might only be 2% of their customer base that is new, but that 2% over time is massive and it's exactly what you were saying where there's a feeling that our customers know how we do things, we know where to find the products that they want to buy and maybe they even already know what they want to buy before they come into the store. Yes, that's all true but there is this subsection of the consumer base that is intimidated the first time that they come into the store.
There are a lot of Canadians who still haven't been into a cannabis store, or maybe they went once, and they had a negative experience. So, exactly to your point is this customer journey. We really do have to try and make it as welcoming as possible.
And I've seen everything from cannabis stores that look like Apple stores, they're sleek, they're beautiful and I've seen other ones that look like Korean variety stores in suburban Toronto or something, you just run down and shabby and everything.
David Thomas: Yeah, it's interesting. That was the common thread of, “We want to be the Apple store of cannabis,” and I think we've softened that stance a little bit. A lot of those companies who had that concept in mind, they're quite frankly, they're bankrupt now or on their way out, and what happens is when you have a 30 percent margin packaged good product, you gotta be careful where you spend your money.
So, I think it's about making our customers comfortable, and the other thing is how much space do you need? I think, as a rule, even our early stores were too big and they were still half the size of some of these other ones. If you make your store small enough, you can make it as nice or as rough around the edges as you were saying, as you want. But it's really about where you're spending that money and how you want to design your customer experience from there.
So tell me about the company, what's your installed base?
David Thomas: So we have approximately 10% of the Canadian market right now. We started out focused, so we're in over 500 locations in the US and Canada. We're very focused on maximizing our current customers' use of the product; that's how we approach our development. And as we go, we build from word of mouth and inbound leads. As I said, we don't have a ton of sales efforts.
One of our early successes was based on my retail experience, understanding from first-hand experience what a retailer needs and building a product to suit that. But eventually, that kind of ran out, and I'm still involved in the space from a retail perspective, but what we started to realize was there are different perspectives of this, and there are different ways of doing it, and we look at every new customer as an opportunity to see a new perspective of how menu management can work in this space, and we try to build our product around those different stories. So each of our retailers might not realize it, but they have a voice in the development roadmap of our product, and that's how we see growth because if we can save our customers’ time and then once we save them time, we can start maximizing margins, and once we maximize margins, we can start boosting their revenue. We can really take some of these companies who are struggling and make their business better, and that's what we're focused on rather than store count because we're in the infancy of the industry. So, I see it as almost a waste of resources to chase early market share. I would much rather build a strong product.
Is it easier to work in Canada than the US because it is nationally legal?
David Thomas: I guess it really depends on what your goal is. It's easier to do some things with cannabis in Canada. For instance, we built a database of 35,000 SKUs in Canada to help our retailers with data entry.
That's not possible in the US. There are no barcodes from state to state, just because of the federal legality of it. That said, if you're going to do a more simple solution, the US could be easier. The reason why we focus our development on Canada is because it's a little bit more robust in terms of a national regulation standard. So we can build out our product in a way that kind of wraps around a nationally legalized structure, and then what we do is we take parts of that, and we distribute it in the US. So our Canada market is like an R&D farm, and then we pull out parts of our product and wrap it around a particular use case in the US, but if we focus on the US, it's so fragmented that it's tougher to build that cohesive system. It's better to build the cohesive system and then only use 30% of it rather than build 30% of it and not know what that 70% is supposed to look like if that makes sense.
The company is privately held?
David Thomas: Yes.
And how many people do you have?
David Thomas: We have 12 people right now.
And just dispersed, or do you actually have a bunch of people in Regina?
David Thomas: We have a head office. It's a pretty cool program. It's called the Conexus Cultivator, and it's a tech incubator. So we have about half of our team there, and then the rest is distributed throughout Canada and remote work.
You're in Victoria, BC, which is a lot nicer this time of year than Regina.
David Thomas: It is, yeah. I spent many winters in Regina. I do feel grateful to be here now in the winter.
Yeah, I'm a Western Canada boy, so I had to get the hell out of that one. I don't like minus 30 Celsius.
David Thomas: I feel like I've spent enough time in it.
You've paid your dues.
David Thomas: Yes.
All right. This has been great. Very insightful.
David Thomas: Thanks a lot, Dave. I appreciate you having me on.
Tuesday Nov 28, 2023
Sebastian Kryh, Dise
Tuesday Nov 28, 2023
Tuesday Nov 28, 2023
The 16:9 PODCAST IS SPONSORED BY SCREENFEED – DIGITAL SIGNAGE CONTENT
Dise is an acronym for Digital In Store Experience, and that nicely sums up what the Swedish software firm Dise is all about.
Around for 20 years now, the company is heavily focused on a retail-centric communications platform sold through solutions providers and other partners in its channel.
Now everybody and their sister identifies retail as a main target vertical solution for their platform, but most software options are designed to serve a wide variety of interests that might include everything from factories and airports to hospitals and schools. Dise says it's all about retail.
I had a good chat with CEO Sebastian Kryh about what makes his company's product offer distinct, and how Dise defines retail experience.
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TRANSCRIPT
Sebastian, thank you very much for joining me. Can you give me a rundown of your company?
Sebastian Kryh: Sure thing. Thank you for having me, Dave. So Dise (Digital in-store experience) is a Swedish company that was founded back in 2003. So we've been at it for a while. For digital signage, we like to distinguish that by saying in-store experience or digital in-store experience, right?
Because it's so much more than just a digital poster it's sold purely through a network of selected partners with the goal of connecting the online and physical world to the physical space by improving the customer experience. With the mission to build a user experience to love with intuitive and easy software as a tool.
So would you describe Dise as a software company or more of a solutions company that has software?
Sebastian Kryh: Interesting distinction there, I would describe it as a software company where we build on a product company. So, we build the platform or the suite, which has three parts, CMS being the shining star in the playout. We work with partners to create their experiences their offers, and opportunities to work with their brands and their customers.
Okay. So, if you say you have a suite, what else is in the suite?
Sebastian Kryh: There’s the CMS. It's a cloud-based and intuitive CMS. We have a design tool to build dynamic content and templates in general, used in the CMS and then we have the software that runs on the media players. Both external ones like Windows, Linux, and Brightside and SOCs like the big ones, Samsung and LG.
So when you're working with largely retail customers and you start an engagement with them. What does your company take on, and what's taken on by partners?
Sebastian Kryh: So what we do is that we only work with partners. So, from time to time, of course, we interact with the brands and do that.
The perfect Dise partner is a full-service partner that takes care of all the pieces in the offering to the brands. Everything from creating the content to the consultancy of creating the concepts, installation support for all the partners. And what we supply is the in store experience platform and the support to the partners..
So, it would be a bit like, I know, I understand it's very different, but Broadside is they're UX, Their everything is all focused around digital out-of-home advertising. That's what they're there for, versus probably, the high 90s percentile of CMS software companies are general offers that have some specialty aspects to them, but they're pretty broadly focused.
It sounds like you're saying that Dise is very much retail UX, designed for retail that's where you're going to shine.
Sebastian Kryh: That's where we're going to shine. Exactly, and that decision was made quite a number of years back where it wasn't more of a general feel to it. You could do basically everything you still can, but the main focus would be retail, and how we interact with the retail needs of campaign management and structuring of all the stores and the remote management you would need for that.
So, we feel that we are the ones who are focusing on retail and marketing ourselves as such and that's where we shine, and that's where we have the best results.
So, you have in-store experience. How do you define experience, and how does the company define it? Because it's a very broad term and used quite a bit when I don't think there's a real experience to what is being floated.
Sebastian Kryh: Yeah, sure. But it's also our way of thinking about combining the brand of the product experience together with them. What we can add is personalized communication and interaction that could be through an improved sales conversation or creating customer engagement. From everything, getting the correct feeling and vibe in the retail space to be able to have that really pointy and specialized content or communication for any given period of time or any use case in some sense, right?
So you've been doing this for 20 years. I realize you haven't been there the whole 20 years, but the company has been doing it. What has changed? Obviously, there's a lot more adoption of digital in store than there was 20 years ago, but I suspect that your target customers are also a lot more sophisticated and understanding of how to best use this.
Sebastian Kryh: Exactly, and beginning in the early days and as you said, I've been in the company before, for almost four years in different roles but it started out as really tech focused and the technology and the power that could be found 20 years ago was not where it is today, of course. Reading that it took more tech savvy and innovation to make stuff happen.
But we're seeing it more and more moving from really focusing on what the tech is and what the CPU power and stuff is. It’s more about what you can do with it and how you utilize the power that's available. I don't know if that was an answer to your question though, but we're of course seeing it from a perspective of also seeing it being a lot of Windows install or BrightSign installs where we're seeing external media players.
Now of course, we’re seeing the SOC devices being much more capable and powerful and being something that's growing faster, at least for us, than the external media players, which is still a clear majority of all the installs we have but we're getting more and more requests for advanced features to be connected with triggers and sensor to screen itself.
I get a sense in a lot of cases, let's say 15 years ago, if a retailer decided to incorporate digital signage into their in store experience. Quite often there were a whole bunch of screens and put on walls where there was available space. And it seems now that it's way less about the sheer idea of having a bunch of screens in a store. Maybe it's one or two screens but really thoughtfully positioned as, this screen behind the sales counter is for this reason and this one in the entry area is for this other reason and so on.
So, there's a lot more strategy behind it than before.
Sebastian Kryh: Yeah, I couldn't agree more. That's exactly right. If we're going back a couple of years, it'd be okay. Now the 98 inch screen was put to market and everybody wanted to use it first. It's a cool piece of tech and that's also one thing, of course, that could bring attention but it's just, what do you do with it?
You might get a better experience or the message getting through more, even if it's a 55 inch, right? So we're trying to take a step back from the actual screen size for tech or led wall. This is what is the content and working through a channel strategy. It's not just, what do you want, what's the message and what do you want your end users to see and react to and how you could compile that to be having a synchronized story.
Also the old ways we've been talking about omnichannel for many years but how are we seeing? What's communicated in the digital world on websites or on social media? How do you bring that in and make it feel natural when it comes in store? So you have a connected customer journey. We're getting more and more of those and what our partners are working towards, it's more and more connected to that journey.
That's correct. So if I was to ask you, give me a good example of a company that you and your partners are working with, where they're really doing a nice job of applying digital in their stores, without putting you on a spot with the retail and making sure they're ones that you're allowed to talk about.
Sebastian Kryh: Yeah. So what are you saying that you want a partner we're working with or what was your question?
Are there things that are done in retail settings that are always reliably impactful and other ones that have been tried?
And I'm thinking about some interactive things I see that are more like Novelty than actually having an impact. I'm curious what works and what doesn't. I guess it is a shorter way of saying it.
Sebastian Kryh: Help me understand what you're meaning.
I have seen some interactive screens put into retail environments, particularly athletic retailing sporting goods stores, where I don't know why they did that other than the simple fact that, Hey, it's an interactive, you can boycott this screen and something will happen versus just the right position, the right sort of scale of screen and everything that just there is nothing fancy about it, it just works.
Sebastian Kryh: And coming back to what we said a couple of minutes ago is that you gotta think about what you want to communicate and what do you want to send and how is that to be used in the flow of the customer journey? So in some sense just getting a touch application or interactivity. Working might sound like a cool thing on the design board, but how it's then implemented if it's not used by the sales team to be a sales companion, for example, how to utilize it then it might be just as you say, might be a gimmick or something that's not really encompassed and used in the day-to-day work life in the retail space.
When you're working with partners, are you directly involved with the customers or are you at a relay point where your partner is talking to the customer and they're then coming back to you and saying, this is the functionality they would also like to have.
Sebastian Kryh: Yeah. So exactly. So we work with our partners and as I said, from time to time, we are also invited to talk to the brands and to the partner's customers. But many times we only learn of a project or of a brand when we see the order of licenses coming in. So of course, we work closely with our partners to figure out if they're closer to the end customers than we are. They debate on figuring out what's the worst market, what are they feeling or if it's in sync with what our product roadmap is.
And from time to time, of course, we make alterations to it but we really feel it's important for us to own the product roadmap and understand how we want to evolve the product and try to encompass and use the feedback we get from our partners to add features or add workflows, but it might be right.
So we try not to build on the project by project, but in more sense, this is an area where we need to improve or add. When that is built into a product it then can be used by all partners and all customers in some sense. So there's only one version of the product given point.
Are you hearing or seeing much demand for audience measurement for analytics in store analytics?
Sebastian Kryh: It comes in waves. But yes, it's definitely a thing where we're seeing it and then over in Europe, we've seen that there's different ways of doing it. Going back. We used cameras a while back through legislation, the GDPR and data protection, that's no longer a thing, but definitely for certain projects, that's something that's been used, but not in the majority of the cases.
Is that something you can, uh, provide within the platform or do you work with 3rd parties?
Sebastian Kryh: We would work with 3rd parties to specify that in some sense. What we do is we build the product, which is to then retail focus where that's the market we're aiming for. But we also have a strategy to partner with the best as it's coming with sensors like for audience measurement, whether it be a radar or a camera, what it be.
Then we have a few that we work with, then they will be better at making sure that the sensors are up to par and doing what they should be doing than we do it for them. So then we will partner and the same goes for retail media or do. We also see an increase in interest, especially retail media and how we then work with partners to do more of the advanced campaign management and bidding and such which were not built into our platform.
Is that something you're feeling pressure to have built into your platform?
Sebastian Kryh: Not feeling pressure to have built into the platform. The partners we're working with and the ones we're talking to, future partners, they see they tend to like the idea of us being really good at what we do. And then when we can plug in or add in.
For example, the retail media is a partner to us or software that does that, they seem to, in some sense, honest on what we are really good at. We feel that we don't have to solve all the problems in the world, and then we can take a niche product like that and add that.
And then the offering gets and everybody's on top of the game.
I've wondered a lot about the whole retail media space because it's been extremely buzzy for the last year or so. And everybody's talking about it, but it still seems like the in store digital piece is just a little tiny piece of it.
It gets mentioned, but I don't know that it's really front and center in many plans
Sebastian Kryh: I would say we're seeing an increased talk about retail media and I guess that's also coming in from when we're seeing articles written about the value of it and how you can monetize your network.
But when it comes to rollouts, yes, there are definitely a few, but the majority is still the in-store experience and making sure you can communicate in a good and efficient way to your crowds as a branch. And when you're managing larger networks of thousands of screens, then you want to make sure that you have a platform or a CMS that, that works with that has those capabilities of everything from provisioning to remote management, software updates, of course, all these things that we sometimes take for granted.
There's better ways of doing it than ours. I think we got a good set of features in that area.
One of the reasons that retail media is being buzzed or is so buzzy is this idea that in the same way that with e-commerce and online retailing, you've got traceability that you understand.
Somebody came on the site and they saw this and then they bought it. That's a conversion rate that they can establish. It's much harder to do in physical retail. Are you getting requests and pushes to somehow or other create some more visibility in terms of how this promotional spot was seen for this period of time?
Sales went up X amount, based on AB samples, blah, blah, blah, blah, blah, that you could actually see that by using digital media in store, it had this net positive effect.
Sebastian Kryh: And in some sense that will be not trying to back out the question. That'd be more for our partner, right? That would sit and talk directly to the brand.
But of course, we are responsible for what goes on screen. Then we would be able to tell, okay, these promotional ads were run at this specific time, like proof of play reports, for example, and then you need to cross reference that with the actual data from the point of sale saying, okay, we did these campaigns in these stores and sales went up 10 percent more than stores that didn't have the promotional ad.
Let's go with that one. But it's more of a combination of us supplying our part and then someone that needs to crunch the data from our partner or from the retailer themselves.
So there's all kinds of discussions around integration with different kinds of business systems, including point of sale and inventory systems.
Is that something more that your intermediary partner would sort through and you can provide the API for your piece of it in terms of play out logs and everything.
Sebastian Kryh: Usually that’s the way it's done today, where we would be able to feed. Our partner would be able to create the concept for the retail or they would be able to pull that data from us and that’s what has actually been played and then add other parts of information to it.
So we're not trying to hold on to the information, okay, we need all the pieces of the puzzle to be important. This is what we contributed with and we know we create value by it and then if you want to, you could add other dimensions to it, like quality sales, for example. Then do that math and see what's the ROI, for example.
And there's definitely those projects or those robots that's measured on ROI, but I would say that the vast majority are not based on, okay, if we invest this much in screens, we want to see this much in sales. There are definitely those, but the most of them are coming back to the experience and feeling they want to create in their physical retail space and how can we make that better?
And to that end, how do they know it's better? How do they, how do you measure experience?
Sebastian Kryh: That's a good question. I guess that's done in multiple ways from just the brand being feeling that this is the message we want to present, how we want to be seen and how we're doing it, and I know they've been doing surveys with customers saying, okay how do you feel this communication and this experience was compared to something else. But in some sense, that's not something that we are able to help much with, but then being able to work through our partners, creating the concepts, right?
But I guess other parts where we're seeing also operational efficiencies is that when you integrate to like PIM or the dam systems where we can trigger content and then such, make sure that we have the right content running on screens depending on availability of stock or picking up the product photos and making sure that the content that's on screen is automated by a template instead of someone having to click around and drag files and pick the right naming of the product.
So those guys can focus on doing the analysis and the smartness and then we can have the system automate and create the content in an efficient way.
Are you seeing your end user customers doing much in the back of the house is like staff facing displays versus purely displays that are aimed at retail shoppers.
Sebastian Kryh: I would say that 90% of the products are focused on the retail floor.
And definitely screens are put in the break rooms and such to display other information. But, as it has been retail focused, the corporate communications part of it. It's not something that we've dug deep into but we have brands and partners using our software for that, of course.
You can display whatever you want on screen but the workflows and the product tend to look at the retail aspect of it and the floor.
The project starts with what the shoppers are going to see, not with what the staff are going to see.
Sebastian Kryh: Exactly. That's a good way of putting it.
In terms of retail technology there is a very large ecosystem. There's no end to companies providing different kinds of business systems and everything else into retail. Are you seeing any other technology companies that aren't pure play digital signage that are like POS companies that are starting to market digital signage capability saying, we do these other things for you. We can do this too.
Sebastian Kryh: Yes. We've seen it and I don't have a name in my head right now but we've seen different views on it. There's always these places where we're doing really well, but we're really close to this area.
Why don't we try and do that also? And we're quite confident in our abilities and experience that we are the ones that want to use our products. They want a few extra steps in capabilities within the platform.
So, if you want really basic capabilities, messaging does not going to change very often at all.
There's no granularity to it. You just put something up in every store and leave it there for a month or something. Then any old system might be able to do that. But if you want any level of sophistication, you've got to go to something that's designed for it.
Sebastian Kryh: That's a good way of summarizing.
Yes, there's many thousands of CMS out there, but there's when we're talking about the big ones that we maybe see as our competitors, there's more advanced features in it and making sure that you take the operational standpoint also from adding the screen to adding the license and making sure it runs and have the efficiency during that time, but also, when you want to do updates or how you want to monitor the hardware over time, making sure that so we catch errors before they happen, how we can have alarms for players not, of course, not being connected, but also having it content scheduling it's not valid.
For example, if you have scenarios or tags put in on the screen where we can see, okay, for this period of time, no scenario will be valid.
The content on screen won't show anything, but fallback content, for example. So you want safety features built in to take care of those things or notify you at least of those and that's just one example of just going that extra little bit to make sure that you are taking care of the partners we're working with and also the end customers.
Many of the partners we work with, of course, have scheduling services. They offer that to the brand and the retailers, but quite a few retailers in our system are changing, updating and adding content together with our partner.
So it needs to work with both the large-scale efficiency of the partner and also with the retailer logging in themselves, adding content to the local store, the local campaign or the regional campaign.
Are the Nordic companies in Northern Europe your primary market or are you all across Europe?
Sebastian Kryh: We're all across Europe and from early days we've been, of course, very European companies. So Europe has been our major market, but we've been working out of Asia also. We do have business in Hong Kong, Japan, Australia, and then other parts of Southern Asia and been working partly with North America also, mainly Canada and a few cases in the US, which now it's as we talked, it's the magic step to take for a European company to enter the US market.
At the size we are at now, where we have a lot of good business and a good backbone in Europe, we're getting ready to take the step across the pond. We have a few partners, but we're definitely looking for more partners to help us engage in the U.S. market and the Canadian market for that matter.
Can you provide some background on how the company is owned and everything now? I'm reluctant to say the name of the owner because I'm going to mispronounce it. So I prefer you to do that.
Sebastian Kryh: Vertiseit and the story behind that was to “advertise it” and we took out the “ad” in the beginning, so it just became Vertiseit.
All right, because I was thinking about Vertiseit and this and that.
Sebastian Kryh: Yeah, but that's the story of it. And Vertiseit is today the holding company for two companies, Dise being one and Grsssfish being the other and..
GrassFish is in Austria.
Sebastian Kryh: They're an Austrian company founded in Austria, exactly, but now fully owned by Vertiseit. Vertiseit’s vision is to connect the world of retail and wants to be the leading platform company within digital in-store or in-store experience management Vertiseit purchased or acquired Dise in 2017 and started a journey of morphing the Dise journey from being a lot of on-prem and perpetual licenses to going into pure SaaS and focusing on the retail space and also clinging really tough too and true to the partner channel and how we only work with partners and reward loyal partners and coming into the other company within the group which has their own CMS or their own platform which they've been working on and they were acquired by the group in 2020.
For a few years after, they work with partners, not always through partners to serve the brands with added services as agency and agency services. So it's really the channel that differs the companies.
Do the technologies get co-mingled at all? Or do you pretty much operate independently?
Sebastian Kryh: We operate independently. So that we're two different companies and two separate softwares. But of course, some of the tech guys might talk, okay, how can we solve this? And how can we do that within the group or the market play or customer play?
It’s two different companies and we have a Chinese wall in between us.
What happens when salespeople from both companies get a sniff at the same opportunity?
Sebastian Kryh: Then we both go at it and that's happened from time to time. There was one quite recently where the Grassfish heard of it and also a Dise partner heard of it independently and both ventured into the opportunity and went for it and it's handled as two separate things. So we fight for ourselves.
And the boss just says, you guys just be adults about it and let the best one win?
Sebastian Kryh: Exactly. But of course, it comes down to differences in the product test with all CMSs. They have slight differences in everything.
And the one that won had the best offer with the best product match. So there's no decision made in top management. For this opportunity, we will put this one forward. If it's out there and if both are within their different channels markets, market strategies and waiting for the same then that's allowed and the brand will then choose which one they think is best for them and that's the one that should win.
All right, last question. What might we see out of Dise in 2024? What's coming?
Sebastian Kryh: We've been working on the CMS. We're getting really good rates about that and being more intuitive than ever. And I'd just like to mention just one thing before going to that is, we did a demonstration of the CMS for a now assigned partner. But a couple of months back was a potential partner. After demoing the CMS for 25 minutes and their response was, ‘Congratulations’.
That's something we took back as being really proud of. Of course, they had a few questions on details, but it's really intuitive and really nice to use.
But what we see in 2024 is we'll add more to the playout part of it and how we can cover more operating systems as we're running today, the soft platforms and Windows platforms to do improvements there. So, that's a part of the CMS; of course, it's continuous improvement, but I think you'll see more and larger improvements or larger changes in the playout area.
And do you have a standard ISE?
Sebastian Kryh: We do have a standard ISE. We'd love for you to, of course, come by so we can show you some of the launch and the changes in ISE. So just take your time and swing by…
And show your latest pots of pans.
Sebastian Kryh: Exactly. Right.
All right.
Sebastian Kryh: Yeah. Please come by and watch new things.
Terrific. All right. Thank you so much for spending the time with me.
Sebastian Kryh: Thank you so much for having me, David. It's been a pleasure.
Thursday Oct 19, 2023
Gil Matzliah, Novisign
Thursday Oct 19, 2023
Thursday Oct 19, 2023
I bumped into Gil Matzliah at a conference this summer, and told the software executive we were long overdue to do a podcast about what's happening with his company, Novisign.
We finally nailed down a date and time, and as it turned out, it was just days after the horrendous violence that broke out in Israel - where Matzliah and his company are based.
We chatted about the situation and the impacts on his company. He's fine, his family and staff are fine, but everyone is understandably rattled.
We then got into the roots of Novisign does, what's different about its CMS solution, and what they're seeing and hearing in the marketplace. Novisign was an early adopter of Android and it remains its primary go-to operating system.
Though Israeli, more than half of its business comes from the US and another quarter from Europe. And now the company is growing business in Japan.
Transcript
Gil, thank you for joining me. You’re in Israel, where a few days later things went crazy there. I have to ask, how are things going? How are you? And I assume the family's fine and everything?
Gil Matzliah: Yeah. Thank you for your concern. Yes, me and my family are all good, also the team members that are here in Israel are good. Last Saturday was a very hard day in Israel. It's something we never expected would happen. But now we are good.
Your offices are pretty close to the West Bank, aren't they?
Gil Matzliah: Yeah. So, Israel is a small and tiny country. It's not too big. So everything is close to everything. Our office is close to the West Bank, the conflict and all the issues you hear now in the news have been in the south area of Israel with the border of the Gaza Strip.
I hope everything continues to be fine for you and things settle down there.
Gil Matzliah: Yeah, we also hope so. At the end of the day, we like to work, we like to have peace, everybody wants to build good things together and so do our neighbors. In NoviSign, we have Arab Muslims, Christians from all around the world, Jewish people, we all work happily together and that's what we hope the world will go for. It's just this thing with the Gaza Strip that... and there's an organization called Hamas, who is making the issues and challenges for our regions, which I hope will be better moving forward.
Has staffing been affected at all? Have you had members of your staff be called up to the military?
Gil Matzliah: Yeah, in many countries, they call some of the stuff but you can say it's less than 10% for a team all the time one or two people in total.
Yeah, it's just one of those things which you can't help but be directly affected in some way because of the size of the country and the way things operate, right?
Gil Matzliah: Exactly. Yes.
All right. So enough of that. I don't want to dwell on it and no doubt by the time that things will have changed and hopefully gotten better.
Just for the benefits of people who maybe don't know your company, can you run down what you do, how long you've been around and how you distinguish yourself in the marketplace as NoviSign.
Gil Matzliah: Perfect. So, we are NoviSign. We do digital signage software. Our company is based in Israel and provides services from all around the world. We have people in the US, Germany and Japan. With a team of more than 200 partners all around the world, we give a global software as a service for digital signage.
I started a company with my colleague, Avi 12 years ago. It was 2011. We established it here in Israel, with the dream to be a great startup, changing the world and leading the digital signage software.
Have you changed the world?
Gil Matzliah: It's not so easy but we're sure we'll do it. We are making changes. We are progressing. Opening a startup 12 years ago, that's a long journey and like a roller coaster, you go up, you go down, but you keep going forward all the time. And after a few years, we started to see the good results coming and since then we are growing and growing constantly every year.
Good. So if you were lined up against, let's say, 10 other CMS software companies out there and somebody said, all right, I've looked at all these other ones. What is it about you guys that's distinctive and different and important? What would you say?
Gil Matzliah: Yeah. So, first it's the team. We came with a lot of experience in software programming. We are technical people. We are software programming people. We have opened the company to lead in the platforms that enable people to do that. So, it's the team that you work with. It's the technology behind the servers, the player, the communication, the integration and it's the offering that we have.
We have a wide offering, which is very reliable and secured and trusted by thousands of customers around the world.
You mentioned security and I know you're SOC 2 certified. Was that important to do?
I'm hearing more and more from a variety of different companies saying that the security piece of this is really important, maybe much more so than it was even a couple of years ago.
Gil Matzliah: That's correct. So more and more organizations are looking at security, but also it's the maturity of the company.
So when NoviSign started with few installations, what you are busy with is just building software that works. And then after it works, you start adding more and more features. And when we started, we were looking at a small and medium businesses. But slowly, as people saw, we have a nice, easy to use platform, then the bigger companies started wanting it. But when you go for a bigger company, and as time changes, all these medium and large companies today want better security, they looki at all these RFPs, abd you really need good security in order to get these customers.
Have you evolved like a lot of companies have, where they started with the small to medium business market and now they're more focused on enterprise?
Gil Matzliah: We are not focusing on enterprise yet, but this is the growth engine that we have. So if you had asked me like five years ago, we wouldn't work with banks, insurance companies or bigger Fortune 500 companies. But if you look recently in the last five years, we started to work with a few banks and corporations and insurance companies worldwide and there is the bigger number of bigger business we work with now.
I'm curious when you say five years ago, you wouldn't have worked with a big bank or somebody like that. Is that because your platform wasn't ready for it or a very large customer, as I've said to some other people in the past, they could be great, but they can kill your company because they just get so involved and they can be so needy?
Gil Matzliah: It's a good point. So if I look at that, I can tell you an interesting story. Like a year or two after we opened the company and we have the website and we started to do promotions and we started to go to shows and I'm sitting in my home and suddenly I'm getting, today we have people in the US, but back then we were just in Israel, and a call was redirected for me from the US and it was the MTA of the New York transportation company asking about our platforms.
And you're not really ready for these types of companies when you are less than 10 people, a small company with a new product. But once you are in almost 10 years or so, and you have enough people to support, enough understanding of the security, the features, the integrations, the platforms, then you get ready to serve the bigger companies.
You work with a lot of different platforms and therefore hardware partners. I know you're on Android, you're on different SOC platforms for smart displays, all that sort of thing.
Is it a challenge to manage the variety of, they're all are just similar in certain respects, most of them are Linux in some way or another, but how easy or hard is it to stay on top of all those different ones?
Gil Matzliah: It is a good point. It is a good challenge because looking at that, when you're a small company and at the beginning we started with Android.
I think we've been one of the first, if not the first, to develop an Android based player, an APK back in 2011. There are more and more people on Android, it's not the most of them. And then we started to add ithers, we added Windows, we added Chrome, we added Linux, now we are adding HTML Player, we are adding Tizen, we are adding WebOS, and we're adding more and more features. It's becoming very complex to support them all because once you have a change, you need to see it's working on all the platforms.
And when you speak about the Android platforms, just the Android platform has so many versions. And we even have, lately, forced all our customers with Android that is less than 6.0 to stop using the system because until half a year ago, there were people that were still using Android 4.4 with us and the difference between Android 4 and Android 12 is huge. So imagine that fixed security support, as you say it's becoming to be more and more challenging and you need to grow the team and it's slower for you to add new features because you need to see that it's working on all the platforms, but we do believe we should be always hardware agnostic because what is differentiating a CMS software from a Samsung LG and all the other display manufacturers that are doing the software is that we work with all the platforms and they work just with their platforms. So we keep it as a focus for us.
Is technology enabling you to go towards being operating system agnostic without having to make compromises in terms of, yes, we can work across all of these different platforms, but we can't do everything on each of them or whatever, which I've heard versus, natively written software that's native to Tizen, native to WebOS and so on.
Gil Matzliah: Yeah, it's hard to do 100 percent of your features on all the platforms. Not all the platforms, not all the OS work equally. So our main player from the first day until today is the Android, which we can do 100 percent of our capabilities. When you go to Tizen or WebOS, you are limited in some way, and then you need to give away some features sometimes when you're developing your platform.
Are you finding that the marketplace end users and your reseller partners are starting to settle in on certain solutions, like they're settling in on Android or whatever it may be?
Gil Matzliah: I think you probably know better than me the hardware, the platforms, the ways to do digital science is like a big jungle. There are so many things and choices, even the software, you always say that there are many more CMS platforms.
So there are so many varieties there. So I don't see anybody locking on anything and that's why we keep the diversity to be able to support the most.
For the technical people at AV companies that are just starting to get into digital signage or the AV IT people for end user customers. Do they look at this space and go, come on guys, can you just establish some standards and continuity and not have all these varieties of options?
Gil Matzliah: They're asking for that. We are asking for that. I think the world needs that. The one thing, we do see that Android, since we started 12 years ago, and imagine 12 years ago, you didn't even have a set up box of an Android, or just the first one was just coming in 2012, like the year after we started, or the first year of NoviSign.
And today, most of the world, most of the set up boxes around the world are Android based. So we do see that Android... both the system on chip and both of the players have been the main platforms for digital signage. For us for sure, more than half of our installation and most of our installations are Android based either with a player or with a system of chip. I find it very strange that Samsung and LG are still struggling to stand out technology and not going with the mainstream.
That seems to be changing. Samsung is moving away from its software partners, at least it certainly seems that way and marketing its own platform and LG WebOS now has a standalone player, a WebOS player, as opposed to you having to buy their display so that they've got some flexibility there.
So I think the big guys are seeing the need to either adjust or just decide, you know what, yes, we have partners, but we are going to do our own thing as well.
Gil Matzliah: We believe in Android, but we still believe that we would need to be hardware and OS agnostic.
Partner and end user demands, have they changed through the years? Like what they wanted when you got into it or maybe even five years ago, is that different from now?
Gil Matzliah: That's an interesting question. I don't notice a big change in the partners. But one thing is for sure, customers, partners, they want everything all the time, so we need to be there to deliver it for them.
The impression I get generally is both for the AV/IT ecosystem and particularly on the end user side, they understand the technology a lot more, they understand the benefits and so on. So you're no longer having to put stuff up on a website or elsewhere saying what is digital signage and here's the reasons you want to use it and so on.
They get it, they understand it, perhaps they've used it, and now they're looking for their second generation of software because the first selection did the job, but didn't really do what they wanted or limited their capabilities. Are you seeing that?
Gil Matzliah: Yes. I think the world is more familiar with digital signage. When we started 12 years ago, not many people would knew what it was, what you do with it, how you install it.
And today, every new project of signage is an integral, internal mass part in all these new setup locations, public places, and when more and more people are dealing with that, then they have more knowledge about it and then they start to learn more, to ask for more and this is something we do see.
Are there particular vertical markets that you're seeing a lot of growth in and that you guys are focused on?
Gil Matzliah: I can tell you about the geographical region. So most of our business, more than half of our business is coming from the United States, which is the easiest market to work with. The faster trying thing, understanding thing. Then we have the European market with a quarter of our business coming from there and they’re more conservatives, what they're getting, how they're getting, planning, trying and so on. And then, we have the rest of the world and we are focusing and growing in the last five years in Japan. We have a local team over there in Japan and in Japan they are testing more, asking more. If you deliver and if you have a lot of patience, then it grows. So these are the regions that we work with.
As for the different sectors, we really don't have anything which is like more than 20 percent of our business. We do have hospitality, we do have health care, we have the cooperation, we do have retail.
But we started a new initiative, which we spoke about in the past a little bit. We established with some partners a company named which is focusing on the retail industry. So everything which is fanning out from retail. Today, we are moving to this new initiative that we built and generally the sectors.
Are you mainly selling through a “channel” or do you sell direct?
Gil Matzliah: We are acting both direct and on the channels and both of them are significant for us. So, there isn't one which is more or less significant than the other.
A lot of our partners are white labels. There are so many installations around the world, which are based on the NoviSign signage that you won't even know.
Which I assume is very important to these partners.
Gil Matzliah: Yes, because for years, these partners have had their their software, their brand and our support behind it and we give them like instances and so on.
We give them confidentiality, of course, if an end user will turn anything upside down and look and research, after some time they’ll find us, but it's working fine for our partners and for us.
Are your partners layering on managed services so they're white labeling and then saying, we can run this network for you or at least keep an eye on it?
Gil Matzliah: Yeah. So when we're working with a local partner, and we have more than 200 of them all around the world. The nice thing is that, if a customer is calling us and say, I want to install this hotel, this hospital, this restaurant, this city hall, we'll tell him the first thing, we are a software company. We are SaaS, it's a do it yourself, we can support you over the phone.But if you want installation, if you want hardware, if you want initial setup, if you don't have the right people in your organization, then we can refer you to one of our partners.
Our partners, they are integrators. They know how to build the right hardware, how to configure our software, and how to set it up for the customers, and they do it because they know it much better than us.
So, if a customer just wants to get the SaaS subscriptions and they're going to do it themselves, then your partners aren't going to really see anything out of that anyways. They're looking for the services and the hardware integration, all that stuff, so they're not too fussed if you go directly on that but if there's an opportunity to layer in things, then you throw it to your partners.
Gil Matzliah: Yes, because we are not going to do meetings with our customers. We are not flying to customers. We are not driving to customers. We do everything software, everything from remote. As long as you need a meeting then it's not going to be sent anywhere.
Are there, “whale accounts”, big reference accounts or they could even be small ones that you, when you get asked about who you're working with that you're able to talk about?
Gil Matzliah: One of our biggest accounts is Worten in Portugal, which is like Best Buy, that has more than 10,000 endpoints with us and we do have some other big corporations and hotels with us as well. In Israel, I can tell you some names like Ikea, Coca Cola, most of the hotels that are working with us here and many other big brands.
In that Portuguese big box electronic store, what are they doing in there? Is it strictly just big displays or are they doing interactive?
Gil Matzliah: It's more like a display of things, but they have a lot of initiative, they're very innovative and for more than five years, we work with them and they are always one step ahead of the market, whether it's very nice gates and video walls and presentation layers and everything related to products. In a way, when you go to the Worten store, it will dress the entire store with a special occasion, holiday, festival and the promotion that they do.
I'm curious about how your company is using AI. You come from a part of the world that has, pretty serious number of technical people, and some of the AI companies have come out of Israel. Are you applying it or are you looking at it as something you can use?
Gil Matzliah: We know and believe that AI will be a part of digital signage. We know it's important. We know it's just the beginning of it now, so the value you can create with it, it's not big yet, but we know it's coming. So, at this phase, we didn't release anything or expose anything, but our technology team is looking at that and trying to do a few things. We might present something in ISE, which is coming at the beginning of next year.
And would you use it for… I moderated a panel the other night in New York about all this and I said the presentation layer of using AI for generated visuals and so on, is interesting, but to me, the truly interesting stuff is back of house automating routine tasks and creating marketing materials without a whole bunch of work involved, and one of the guys ran a media company was talking about data input and harmonizing data and all that sort of thing. So somebody looking at this from afar, they might think that's pretty boring, but it can be pretty valuable.
Gil Matzliah: We are less looking on the operation side, as AI will help us see the operation side of the signage. We're more looking at the content creation for the signage itself, for the inputs.
What about on the technology side? There's endless buzz about LED displays and new emerging display technologies on the display and the playback hardware side. Are there things emerging that you think are going to be important?
Gil Matzliah: We don't go into the display technology, the LED technology for us. It's more agnostic. So as long as it can get a resolution of a screen..
It's an output.
Gil Matzliah: The one that you get as an input or an output is the way you look at it.
What about on media players and just computing power?
Gil Matzliah: Yeah, the media player is the important stuff And the main question we all the time ask ourselves is, Is the world moving to a system on chip? Would it stay on the media players? Would it be a combination of them? Would the resolutions and the quality grow performance? And this is something we invest a lot of effort, thinking and development, especially working with all these different platforms which is a lot of maintenance to do.
Yeah, I think one of the interesting things and I'm racking my brain trying to remember who, but the idea of system on chip, but with an upgrade pass, so you could pop open a smart display and put in a new SOC three years out that has more graphics processing or some other capability that maybe that didn't have when you first bought it.
Gil Matzliah: That's an interesting direction.
Alright. So if people want to know more about your company, where would they find you online?
Gil Matzliah: You can look for NoviSign.com. All the information is there, the phone numbers, they can contact us, and we are looking for new partners all the time, that will work with us, innovate with us and take our software to maximum customers and locations.
And also, if you're an end customer and you want to learn more, you want us to support you with innovative technology and especially software, we'd be happy to have you visit at NoviSign.com.
Alright, Gil. Thank you. I hope things calm down there and when I see you at ISE in a few weeks or a couple months.
Gil Matzliah: Actually, we're planning to be in MEDICA in Germany next month and then in Las Vegas and then ISE in Barcelona. So wherever you're coming, I will always be happy to see you.
Las Vegas and Barcelona, I'll be there.
Gil Matzliah: Oh yeah. You have a mixer at both places. Me and my colleagues are looking forward to them.
All right. Stay safe and I’ll see you soon.
Gil Matzliah: Thank you very much.
Tuesday Aug 29, 2023
David Title, Bravo Media
Tuesday Aug 29, 2023
Tuesday Aug 29, 2023
The 16:9 PODCAST IS SPONSORED BY SCREENFEED – DIGITAL SIGNAGE CONTENT
We've seen a noticeable rise in the last couple of years of visual illusions and other trickery on big digital OOH screens and other surfaces presented as real screens, when they're not.
There's enough of it that observers have started giving it names, like virtual out of home, Fake DOOH or the one I like - Faux DOOH. Arguably, the most notable ones involve Dubai landmarks - a giant, empty picture frame in that city turned into an Adidas billboard celebrating Lionel Messi's World Cup win. Or a giant Barbie taking a step in a plaza, with the Burj skyscraper looming in the immediate background.
They're fun and noteworthy, but if people got in their cars to go have a look in person, they'd be disappointed, because they're totally computer-based compositions overlaid on surfaces that don't have screens. And it absolutely happens.
David Title of the New York creative technology shop Bravo Media goes back and forth with me a lot about this stuff, on social media. While we both have a problem with CGI creative presented as real when it isn't, we have differing opinions on its validity and value.
In this podcast, we get into what's going on, how it is done, the good and the bad, and interesting things like the legal implications of running a Faux DOOH ad overlaid on a real screen that the media owner otherwise sells. It's a fun half-hour.
Subscribe from wherever you pick up new podcasts.
TRANSCRIPT
David, thank you for joining me. We've chatted once before, but that was in your office in New York. Can you give me a rundown of what Bravo Media does, first of all?
David Title: Sure. Bravo is a creative production studio with a very sort of direct focus on real-world, real-time experience, and for us, that sort of splits almost down the middle between working on events across trade shows, conferences, activations, launches and then working on projects within the built environment around corporate environments and retail display and hospitality and immersive attraction and combining the world of visual content animation 2D and 3D modeling video along with interactive development and design.
Would you liken yourself more to an agency or like a solutions provider because, I know, a lot of the stuff you do involves some hardware as well, like you've gotta figure that part out?
David Title: Yeah, we straddle a lot of those traditional titles. We work with agencies quite often to help them execute projects that they have developed with their clients.
We also work directly with clients across a lot of areas, especially in the B2B space, on projects in which we're helping from ideation right through delivery. And on the hardware side, we really partner across the board with folks in the AV and hardware space. From LED providers, integrators, manufacturers, and all those folks have to come together.
The thing that's so challenging and exciting about the idea of experiential marketing is that it does require a swath of people with different specialties, and any place that's saying they were doing it alone is either lying or doing it badly.
I know it's always difficult to talk about projects that you've worked on because a lot of your customers don't allow you to say anything. But are there ones that you can provide references that people might be familiar with?
David Title: Sure. I think a couple of things that have been fun for us that are out in the public eye; I know NFL season is starting up again shortly, and we got to work on a pretty exciting project as they were building out the new NFL Broadcast Studios, network Studios next to SoFi Stadium.
And we helped create this pretty phenomenal piece of the studio called the Duke, which is half of a giant extruded glass and metal football, but each pane of glass is actually reactive. So it can go from opaque to transparent in a microsecond and then fully projection mapped. So, we're able to go from this clear display that people walking behind it can see through to the show floor and turn it into a full-fledged display for on-air graphics. That was a really fun piece to collaborate with some really excellent folks across the space, and it's fun to see it on TV and see the differences in how it's been used over the last couple of years.
You also did that QSR in Times Square. Are you allowed to talk about that one?
David Title: The Revlon Spot?
I'm thinking of donuts.
David Title: Oh, yeah. We did the Krispy Kreme experience for Times Square, sort of flagship for Krispy Kreme.
Okay. So you can talk about that.
David Title: We can talk about that a little bit. We created the Donut Theater Experience, and part of the fun of that shop is that, as you're waiting in line for your donuts, you're standing watching their fully automated sort of donut production line do its magic tricks. We enhanced that with a whole bunch of projections, including projecting on their glaze waterfall and making tracked projections onto donuts, which required creating a piece of software called 'Is that a donut,' which is fun to use in other projects and the whole integrated system of little shows that happen throughout the day, showcase that space.
Interesting. I'm finally getting back to New York in a couple of months. Go down there and see as much as I try to avoid Times Square, but it's been a while, so I should go.
David Title: I gotta say, in terms of digital out-of-home, there's definitely been a sort of explosion of really gigantic displays now in Times Square.
We've got that big TSX board now with the stage doors that SNA put in that I walk past almost every morning on my way to work. I cut very quickly through Times Square to get to the other side.
Zigzag around the tourists, although it's probably not the first thing in the morning as much.
David Title: It's amazing how early they get out there. Sleep in.
Alright, so we're mentioning Times Square. The reason that we wanted to have a chat was to talk about the emergence and somewhat the explosion of, first of all, anamorphic video or visual illusions on these big LED boards. But, more to the point, these visual illusions that don't actually exist are being developed by brands using CGI artists and everything else and being presented as the real deal in some cases or being assumed as the real deal.
And I have a problem with those instances which are frequent when stuff gets put up on LinkedIn or Twitter or other social media channels saying, 'Look at this amazing thing in Dubai or wherever, or one of the most recent ones was this giant, I don't know how tall it was. Purported to be like an 80-foot-tall Barbie near the Burj Khalifa. And people are going, oh my God, I have to see that, and I was going on LinkedIn saying it's not actually real. It's just a CGI thing, guys, and I think that's problematic. We've gone back and forth with this, and you said it's actually pretty interesting and opportune.
So, what's your perspective on it?
David Title: I think it's interesting you bring up the anamorphic, quote-unquote, 3D displays that have been happening on a lot of billboards around the world. And in some ways, that kind of started this whole discussion because one thing that we both saw in a lot of people on LinkedIn and other places like Instagram and Twitter, that there was a mix of actual footage taken on the street of these displays from that perfect viewing angle. And they looked really cool and really amazing, and then, there were a number of comps that are CGI artists creating content that is superimposed onto video of those same billboards. Sometimes, they do really well, and sometimes, with less viability, as they leave the frame of the billboard and things like that.
In some cases, it is being used by manufacturers and resellers claiming to have 3D billboards or 3D LEDs, which is very misrepresentative and super problematic. I think across the industry, for everybody, it creates false expectations and limits your ability to show off what actually is cool and impossible.
And I think it just creates a negative connotation across the board, and at the same time, of course, like at Bravo, because we create a lot of original experiences. We create a lot of comps for our clients all the time as a way to help explain and understand how something's gonna look.
We use it as part of our design process, part of our creative process, and the next iteration of that, and honestly, the first one of these that I remember being in that space between a fake that many people thought was real. The Soho Zara storefront, which was, again, a really well-crafted fantasy comp, which, if for no other reason than once it was completed, the space seemed to have no doors, which is problematic for retail. I think if you have a really killer window display and nobody can get in it, it's a little self-defeating.
There were plenty of other reasons why it was impossible. The artist that created it, I don't think, created it with any intent to make people think it was real. That same artist has done plenty of other pieces similar to this and has a history of these sorts of works.
But Zara did post it on their own Instagram without saying it wasn't real, and I know people that went down there to see the store. People that I thought were smarter than that, to be honest. But I get it. You get wrapped up, you get excited, and I think the beauty of these sorts of comps and fantasy installations is that they are super inspirational, and they are exciting, and they're really fun.
And then you got to this next level. I think over the last six or seven months, the biggest ones that I think people saw and some people bought into, and some didn't, but all were put out there without a direct statement that they weren't real. There was a big Argentina billboard after the World Cup. There was the French bag company that I won't pronounce properly, that started with a 'J' that made handbag cars that drove around Paris which looked great. Maybelline did a mascara thing on subways and buses that looked like they had giant eyelashes, and then I think the one that really went super viral was that Barbie piece that you were talking about.
And the coach had a fun piece for their new coach Topia popup, which also a number of people thought was real, and clearly, they've never tried to get anything past a permitting board in New York City because that wasn't going to happen.
One of the people on LinkedIn said, "You should go down and check it out", and I challenged him, I said, where are they gonna check out? That's a comp, it's an AR thing.
David Title: Yeah, and it's super fun. I think what's exciting about it from our perspective is that, first of all, I don't think there's any value or any point in anyone involved in these projects directly and saying, "Hey, This is real when it's not."
Is there a responsibility to do something somewhere out there that loudly says, this isn't real? I don't know. They don't say that on The Fast and the Furious. But I don't know, cars in outer space. Oh, I guess that's Tesla's outer space. But anyway. But you know what it allows for one is it allows even small brands, challenger brands, and not-for-profits to create the experience of their dreams and realize it at a fraction of the cost of executing it in the real world. And with out-of-home in general, obviously, you're first buying for those views on the street.
But the bonus for out-of-home is if your content is so good that it gets picked up and shared on the internet and across social media and picked up by the news. When that happens, it's a massive boost, and so if you look at these current virtual digital out-of-home campaigns, you're not getting those street views, but you're getting an exponentially higher number of impressions through social media. So, I think in that way, it's such an exciting way to explore what's possible and also to play around with reality. And, if you watch those handbags driving around Paris, and it feels real, and it looks real, then that's a great experience for you to have watching it.
And the fact that it was synthesized doesn't make it any less fun or engaging than Fast and the Furious.
Does it matter if it's not technically possible or incredibly expensive to do? If you did wanna make it possible? I'm thinking of some of the anamorphic illusions, where the physics doesn't work; the visual is escaping well beyond the borders of the display. To me, that's more problematic.
David Title: To some degree. Again, I think most of those that I've seen start with somebody claiming it to be a real thing and that they have some special product that does it, and that I have a real problem with.
The other question and this is probably more controversial, but on video, in theory, Brand Z could virtually take over every billboard in Times Square and pay nothing to the owners of those displays as far as I know. I don't know if those laws have been written.
Yeah, I think you're right. Ocean Outdoor is a big UK digital at-home media company. Big media owner has the big ass display right in Piccadilly Square or the circus, pardon me, and they put out something recently saying, yeah, we do have a problem with this because you have companies who are appropriating our media space and presenting it as something that they booked and ran on it when they didn't.
David Title: And that's an interesting question. Because, in theory, what they're selling is digital out-of-home, and what I've done is made a video of the surroundings. And then, can I do a video where I put lipstick in a funny hat on the Statue of Liberty?
Or can I make it look like the Lincoln Memorial has been dressed up for the circus?
Oh, Lord.
David Title: There's always been a history of advertising stunts. Some of which have been more moral or ethical. Burger King did an AR takeover where it turned their competitors' logos and things on fire.
So you'd point your phone in the McDonald's outlet, and it would be flame-broiled or whatever. I can't remember exactly how it operated, but they impacted their competitors. And again, I'm like, I opted into that. Is that Avaya? Probably some interesting court cases are coming, I would guess.
Or some, at least starting with some cease and desist letters, maybe.
Yeah, you live in a very litigious country, and I wonder about those graphic artists, particularly if they're commissioned by a, let's say, a fashion chain or whatever to do something.
And they create a piece on a building that doesn't even have a display on them. Some commercial property company has, and they see that and are gonna stick their lawyers on them and say, guys, you're using my building as an out-of-home media display.
David Title: I would counter that when a movie shoots in a city, every building in that shot is part of the scenery that I'm using in my movie. They're not getting paid.
Let's see what happens. You just gave some lawyer an idea.
David Title: I know. I hate that. That was not the point of this conversation, Dave.
The point of this conversation was to inspire people to get excited about virtual digital out-of-home and see the possibility. But what I think is fun about it and, again, moving even beyond and creating virtual billboards or virtual content onto real billboards are some of the larger, more imaginative things you can do.
The coach piece the Maybelline piece, and even, to some degree, the Barbie piece, which honestly was so clearly CGI that I don't really feel like anybody can be upset that they were trying to be fooled. Come on, it's an 80-foot woman with no nothing behind her.
Yeah, I think the Dubai frame one with Leonard Messi was more convincing to a whole bunch of people.
David Title: Yeah, it was; I got phone calls asking how they did it, and...
You said they didn't.
David Title: I said they didn't. They did. That's the fun of it.
And also, the whole thing with all these things are the ones that really are successful because they look great, they're a really fun idea, they inspire a level of enjoyment and engagement. It's good advertising, and I think the few people who feel slightly tricked by it don't really cause a negative brand impact.
Whoever owns the Dubai frame, whether that's a municipal thing or a private entity or whatever it may be, should they be paid for that usage?
David Title: Yeah, it's a good question, and at what level? And by what metric? and I don't know what the line for that is.
People take videos in Times Square all the time and alter things and change things and post them on their feeds, where is it artistic expression? What am I allowed to do? Because it looks cool and fun
When you have something like the ZARA Store or the Adidas Lionel Messy thing in Dubai. Those aren't cheap to produce to do them well, as you were saying. Does it tend to be the brands that are commissioning these things? Or do you have CGI artists like Shane Fu, who did the ZARA thing, just doing this for giggles?
David Title: I think there's a mix.
I think we're certainly currently working with a handful of clients on, essentially, virtual, out-of-home campaign concepts. These are clients that would never have the budgets to do these things for real but do have the budgets to create the virtual version in a satisfying manner.
And it really allows them to express themselves in ways and to create experiences in ways that are new and exciting and get attention.
Yeah. Does this stuff have a shelf life to it? And I guess what I'm wondering is right now, there's not that many of them increasing numbers certainly, but it's still pretty new. At some point, if you have a whole bunch of brands doing this, does it become an arms race where you somehow there have to be a little bit more outlandish? Otherwise, it's just like wallpaper, like other, more conventional digital signers displays and digital out of home displays.
David Title: I think, not unlike the anamorphic content, I think that it's partly a trend. When it's done really well, and if you're going to go with an anamorphic display, it really helps to have a good reason to be doing it beyond; I want it to look 3D, right?
And the best anamorphic pieces we've seen are really clever in the way that they take advantage of the illusion, and it's really satisfying, and I think that's gonna be the challenge. It's not so outlandish. I think it's gonna be cleverness and integration and in the same way that it would be true for any kind of real-world activation.
I don't think that Maybelline's gonna get the same pop out by putting lipstick on a Volkswagen after doing the mascara on the buses. But I think there's another channel they could explore to find another hit of attention.
Yeah. As some of the 3D displays that I've seen are just videos mainly, a watch, the face kind of escapes the screen a little bit, or somebody walks up and peers out over the edge of the screen down into the crowd or whatever, they're clever, but I really wonder how much impact they have.
David Title: Yeah. Honestly, I think with any of these anamorphic, you, on the one hand, you've gotta be losing a certain number of impressions because it simply doesn't make the impression, a valuable impression from a lot of angles. But it makes a really big impression from the right angle.
Which is a very narrow-angle typically.
David Title: Although there are so many of these right now in New York, and I do think folks are beginning to understand how to make things that have a slightly better and wider viewing angle by just not pushing the 3D illusion quite as deep.
You can get away with it a little better, but obviously, a big hope for doing these 3D boards is that somebody is filming them and sharing them, or the client is doing that and getting that extra engagement through social media. I think, again, it loses its amazing value for just being seemingly 3D.
And now we're into the second wave of this, where it actually has to be smart, interesting, and relevant, and all the things that good marketing and good advertising have to be successful regardless of the channel that you're using.
Yeah, I was over in Germany at a conference about a month and a half ago, and one of the presentations was from Ocean Outdoor, the UK Media firm.
They're in some other countries as well, and they were talking about 3D projects like that, and one of 'em was in a shopping mall in Denmark, and then I asked them, Specifically, did you guys shoot this and socialize it out of your own channels to make sure that you had a really good, perfectly positioned camera angle on this?
And you used that to amplify it because I wrote a piece about that one in particular. 'cause some consumers shot it from an off angle, and you could see how crappy it looked.
David Title: Yeah. I remember when they first started popping up before I saw my first one in New York. I was literally on LinkedIn begging people who live nearby to shoot at any of those from an off-angle.
Just so people would understand. Not again; this is nothing. I think it's cool as hell. I really love that we make anamorphic content. I think it's really cool. I love optical illusions in general. We have a long history at Bravo of projection mapping, which is all about optical illusion.
Because I love triggering the brain without any magical technology. It's just the beauty of how our brains work in perspectives, and it's great. Super cool. But, it really matters for people who are looking to utilize any of these technologies. We're. Obviously, we're almost at the end here, so I'm not gonna mention the H word, 'Holograms.'
Oh, go ahead.
David Title: Holograms. There aren't any, but It's important that people understand what the abilities and limitations of each of these platforms are so that you can utilize them to their best effect. They're all cool. Pepper's Ghost is cool, and Amorphic is cool. I think virtual digital out-of-home is cool, but it can all be terrible, really easy if it's not used right.
Yeah. Sometimes, the best application is not the one with the most whizz banger about it. It's just right for the environment, and I think of what you were talking about with projection mapping. I love jobs where the projection mapping is very subtle, and it just appears on a wall in an unexpected way, and it's not flashy or anything else.
It's just, oh, where'd that come from? It makes you look.
David Title: I think the whole notion in the video game world, there's this history of Easter eggs. These sorts of things are hidden within the game that are special if you look or if you stumble upon them, and I really think so.
Within the whole world of experiential marketing and out of home, those little moments of discovery can be so powerful and so meaningful, and I totally agree. The relevancy and meaningfulness and relationship to the environment and all those things are really what makes something effective.
It's not necessarily the biggest, loudest, flashiest thing.
The stuff that was done for Coachtopia with this giant Rube Goldberg machine spitting out handbags off the side of the building. Is that a more viable way to do augmented reality? 'cause I've always wondered what percentage of the population is going to reliably view the outside world through their six-inch smartphone screen.
David Title: Yeah. Again, I think with a lot of the AR stuff in general, one of my favorite clients from back in the day, a woman named Bernadette Castro, used to just always ask me, no matter what we were gonna do for us.
She'd say, I don't know, David, is the juice worth the squeeze? And I love that, and I think about it all the time, and I think with AR, you're asking people to go through this extra step, and the juice has to be worth the squeeze, and again, if it reveals something that's interesting and meaningful and relevant and rewards you in some way for that participation, then I think people will do it.
But I think a lot of AR projects go largely unviewed. Because they're just not worth the lift.
Yeah, and it's a little bit of eye candy that people look at and go. That was fun. But they'll give it 10 seconds, and that's it.
David Title: Yeah. It's getting more viable.
Web AR is getting better, meaning that you're not downloading an app; you're not going through all that rigmarole. The other thing is you're still relying on available bandwidth wherever you're standing, and at least in the US, that can often not be enough.
And that's a larger issue with all the AR stuff and all of the digital extensions to outta home, is the cooler that experience wants to be, the more bandwidth it's going to require, and that's not always available.
Last question. I'm curious if all this stuff that's been emerging is leading to new business because people come to you saying, we'd like to do this, and you have to tell 'em what they did at the Zara store isn't really possible because you need a door to get into the store. But does it open up new conversations and new opportunities?
David Title: Oh, absolutely, and honestly, we spend so much of our time just educating, and for us, it's been really important from the beginning.
I don't sell any particular hardware, and I don't have stock in any particular platform. So, for us, being able to understand and communicate the opportunities with projection mapping versus LED versus LCD or the conversation I had yesterday with a client about the giant refrigerators.
I call them shower stalls.
David Title: Yeah. I just always think everyone looks; everyone has to be very cold. But I don't sell those directly. I think there's a place for all these things, but what we really love is to have that opportunity to share all of these cool opportunities that are out there and to really help our clients select the solution that's really gonna move the dials for them, that they need to move.
Yeah, figure out the problem as opposed to, how can I use this thing?
David Title: Right. Because nobody cares what the thing is when they're having the experience. All they care about is the experience, and if you can do that experience with a $10 piece of something and it's powerful and meaningful, then you should do that, not do the $10,000 one, if it's not as good a fit.
Yeah, a $200 Pico projector and not the $200,000 video wall.
David Title: Again, there's a time and a place for all of these things, and it really is about understanding what you're trying to do first, like you said, and then finding the solutions that are out there.
All right, David, thank you. That was a lot of fun.
David Title: Yeah. I really appreciate it. That was great.
Tuesday Aug 22, 2023
Tobias Lang, Lang AG
Tuesday Aug 22, 2023
Tuesday Aug 22, 2023
The 16:9 PODCAST IS SPONSORED BY SCREENFEED – DIGITAL SIGNAGE CONTENT
Germany's Lang AG is a family-owned and run business that has developed through the years into one of the larger and more influential players in the pro AV market - operating as both a supplier for rentals and staging market, as well as a distributor for systems integrators.
The company is run by Tobias Lang, who based on a couple of chats, clearly has both passion and deep knowledge of the sector, business demands and both the state and opportunity of emerging display technologies.
We had a 30 minute-plus conversation that flew by, getting into a bunch of things - including the potential for a projection systems, which these days don't get anywhere near the attention of LED displays.
We also spend a lot of time talking about LED, and how he thinks that technology isn't necessarily supplanting LCD. From his perspective, he thinks LCD and LED technologies are actually merging. Have a listen and he'll explain.
Subscribe from wherever you pick up new podcasts.
TRANSCRIPT
Tobias, thank you for joining me. Can you give me a rundown of what your company is all about, what it does, and its background?
Tobias Lang: Yeah. Thank you, Dave. Lang AG is a video-only company, which is doing only B2B, which means we cover both verticals, which are rental and staging and system integration.
We supply mostly the European rental and staging market with big projectors, LED screens, cameras, converters, whatever you need in video, and as a distributor, we supply both rental companies and system integrators with the staff of the manufacturers we work with such as Epson, Panasonic, several LED manufacturers to supply the modern technology to them in a good way to consult them, which is fitting to each other.
What amount of your business would you describe as being involved in digital signage?
Tobias Lang: First of all, if you look at the turnover of Lang AG, we do have companies in Switzerland, Spain, the UK, and Germany, which is the biggest. Germany did more than 80 million last year, and 60% of this is done by sales. If you look at digital signage, which is part of sales, this is a significant number, maybe 15 to 20% of our business.
The business itself is in the orbit of Cologne, that area?
Tobias Lang: Yeah, we are spotted in the western part of Germany. We have everything in Germany in one warehouse, as we have in Zurich, Switzerland, Barcelona, Spain, and London, UK because it's very important for our customers to have the opportunity of a one-stop video strategy.
How long has the company been around?
Tobias Lang: We are now 45 years old. My father, when my brother was born, said, “Hey, I have three kids now. I should start something serious.” He founded a company in 1978 without any other ideas because he loved stuff like projection at this time. With the evolution of technology, we ended up being where we are today.
Were you groomed to run the company one day or were you doing other things and decided to go into the family business?
Tobias Lang: I worked for the company as a child which is typical for a family business, then I tried to step away a bit. I studied mathematics. I founded a software company. I did some interesting things.
This stuff is still existing and I still have my chairs, but at one point, I decided that it was a great opportunity to join the family business Lang AG and to be honest, this was maybe one of the best decisions in my life. I love what I'm doing.
That always helps, doesn't it?
Tobias Lang: It does, yeah.
Is there a particular market where you're seeing a lot of activity right now and is it evolving?
Tobias Lang: Over the last two years, this immersive art experience vertical projection was said to be dead or going down five years ago, ten years ago, and what we were able to see over the last months is that projection is growing, and we enjoy this because we love projection and this is based on all these immersive experience setups which are done worldwide mostly based on art, but we believe other verticals can follow.
So these are effectively entertainment venues?
Tobias Lang: So far, yes. But we believe that corporations will use similar setups for brand experience and stuff like that.
I've been to at least a couple of those venues, they work because they're darkened, they're purpose-built and you can control the lighting and everything else.
When you get into a corporate environment, that becomes more challenging but is the technology catching up in terms of laser light brightness, the projection engines getting smaller and detached, the projection head being away from the rest of the equipment, and so on?
Tobias Lang: This is a challenge for sure, but if you look at most installations, most of the projectors are around 10,000 lumens, and you could use brighter projectors, and there are opportunities from the technology side to set up even brighter projectors than we have today. The brightest projector at the moment for the event market or the integration market is 50,000 lumen. You could easily go above.
It's a question about the demand, how much it will rise. But, I believe we will see this too because if you look at the Pavillion of Dubai Expo, 2/3 of these pavilions used projection over LED because of the flexibility of the technology. LED is a strong technology and a strong growing technology, but there will always be room for projection because of its flexibility. For example, the setup time of a projector, don't underestimate that.
Yeah. It used to be for projection mapping and edge blending and everything else. That was like a lot of work and a lot of mathematics and everything else, and now you can do it in software quite quickly from what I understand.
Tobias Lang: Yeah, that's fantastic. That's true.
Yeah, makes a huge difference. The thing I like about projection is the way it can just arrive and be unexpected versus if it's fixed hard physical displays, you know that there's something there in most cases with the exception of places like the Comcast Tower, but the projection, you can have a wall that all of a sudden is a digital canvas.
Tobias Lang: Yeah, and our understanding of the word, “screen” will change.
Mapping is a good example, we use buildings as screens. Decades ago, we had a television at home and this was the screen for us, and yeah, we see changes happening and we see different dimensions of screens and in this flexible world, we will use projectors more. But in our world, we'll be LED, and we'll be covered with some kind of display, but where we don't have a display, we could add a projection screen to add some value.
Is the partner reseller market and as well as the end user market getting more sophisticated, do they understand this technology more or is part of the role of your company doing education and holding their hand?
Tobias Lang: I think it is both. This is always about technology that has different layers. First, you have to train the experts. You have to give an understanding of the possibilities, and then you need to set up a discussion about opportunities for creative people, and then demands rise, and there's some latency in this process as you could feel from the immersive art experience and the change to other verticals, and I believe that they're by nature and you can't change it.
From what I saw on your website, you have a lot of technical people on board. People who can pull apart devices and get down to the board level with them and everything else. Is that a bit unusual?
Tobias Lang: I wouldn't say this is unusual. What may be is unusual that we have technical staff who can decide every single day what they want to do, because of some service and stuff like this, it's necessary sometimes, but we drive an R&D team, which is absolutely free to make a choice of what they believe is important for us tomorrow.
The market expects us to give feedback on future technology and therefore we have to look deep with our partners into product planning and technology, and this is what we love, and I think that's within our organization, a great job opportunity if you join one of those teams.
So when you say you're doing R&D, you're not coming up with your own products, I assume, or am I getting that wrong?
Tobias Lang: No, we are not a manufacturer, but we have to set up solutions sometimes. So what we try to do is, we add value to a product. For example, in the US market, most people know us as the cage company, as we did all the projector frames. They almost thought for a while, this is our business.
What we did, in reality, is that we looked for a solution for our projectors to use them in rental, and we added a mechanical solution on top. For other products, we add batteries as a solution to run wireless. Now, we added some drone business because we believe if you're strong in mappings and you supply media servers and high-brightness projectors to the markets, you should cover the pixels in the sky in the future too.
It also means you're future-proof.
Tobias Lang: Future-proof is a hard word. Let's say we are interested in the future, and how it will go.
Yeah, I guess you can never be totally sure because it moves so fast.
Tobias Lang: That's true.
I would assume that when you're doing all this value-added engineering work, it's in part that in order to service a customer and address a project, you can't wait on the marketplace for the suppliers to just develop something and put it on their roadmap to serve your needs.
Sometimes, you must do it yourself to make it all happen.
Tobias Lang: You have to bring together the information of the need of the market on the one hand and the possibility of, what's on the technical side thinkable on the other hand. So we have to bridge between our customers and the manufacturers, and it depends on the demand or the project.
To be honest, in the first project, you understand the need, but the solution is not available yet. But you learn from it to bring it back to the discussion of product planning, and future roadmap, and then you can return with the right solution for the future because if there is a need in AV for a solution, this will hit you a second, a third time and so on.
Are you in front of end-user customers at all, or your team, or is that something that you stay at arm's length?
Tobias Lang: We try, and I believe we are mostly invisible. Most of the end customers in the European market have no clue that we exist. If our customers rent material from us, it's just a gray case without any brand of Lang AG.
I assume that your business partners prefer it that way, they want to own the customer?
Tobias Lang: Yeah. We always say we are behind, we let the show to our customers and I think those who like this come back to us and we understand this as one of our values.
When we were talking ahead of turning the recording on, you were talking about one of the things that your firm does is you work hard to try to forecast what will be possible and what matters and what the need is of the marketplace. That has to be challenging just because of the way technology shifts, and also, there are so many different factors as to what the marketplace wants including, the war in Ukraine and supply chains and everything else that has happened in the last couple of years.
Tobias Lang: Yeah, around 10 or 15 years ago, it was much easier to drive a mid-size family business.
But today, with the experience of a pandemic, of such a war influencing the supply chains, you have to make sure that you have an understanding of the global world and the effects which are happening for your industry. So we try to be in shape around this. For the actual situations, we handle this quite well. It is easier if you always love to ask yourself what's new, and what's next, because, then you are flexible and agile enough to change fast.
Some of the trends that I've been hearing a lot of discussion about are moving manufacturing out of China into other countries, having storage warehouses, different methodologies for shipping, and everything else.
Has that been critical with the weather the last two, or three years?
Tobias Lang: I wouldn't say critical, but it is part of the game. This is mostly a discussion around LEDs, and in the end, you have to understand that even if you produce an LED panel in Europe, there will still be parts that will be supplied from Asia.
So it's only bringing the challenge to different classes regarding customs rules. It is a bit about politics because it depends on what the European Union will change in the rules of customs, I think there is a similar story in the US.
When I was at the Munich Digital Signage Summit Europe, one of the areas that was discussed quite a bit was green signage and sustainability. Is that factoring into how you do business?
Tobias Lang: Yeah, a lot, and this is rising fast, and I believe there's no stopping it. So it will continue to rise.
In every single supply chain, you will have to report what you do regarding sustainability. You will have to explain yourself in the future much more intensively, much more often how you face this challenge. As a company, it's very important that you have to accept these circumstances and then you should work on it.
Energy management and conservation and cutting energy costs were something that was around prior to the Ukraine War and everything that kind of bubbled out that, but has that really heightened in the last year and a half?
Tobias Lang: Yes, there is a different pace of this change. I'll give you an example.
Last September, there was a new rule by the European Union that all signage displays had to be turned off in Germany between 10:00 PM and 6:00 AM, and most LED screens were never built to be turned off, so they just used a black image to be turned off. But in reality, they were still running.
So this was a challenge, no one was prepared for and I think it's sustainable and good that we now have the discussion of how to manufacture an LED screen, which is easy, honestly speaking, that you can turn off every day.
Yeah, I didn't even know that until I was at the Munich thing, because you just assume it's a display, there's an on-and-off. Why is it difficult for them to be turned off and then turned back on gracefully?
Tobias Lang: Honestly, in most installations, those screens were done modular, which is no surprise because it's cheaper in transport, and then you set up the screen, and you do some kind of dressing, and not all screens understand the dressing once you turn the screen on.
The result is if you turn the screens off, you can turn it on again. You need to have an LED Technician too, because the dressing is no longer working. These are just simple things, but this is a different way of thinking because, in the past, people were consulted to let the screen runs.
And are there workarounds? Is this all being addressed?
Tobias Lang: Yes, there are some workarounds out there. There's a lot ongoing and I believe this story will be done in 12 to 18 months completely.
It is a learning curve, and it also shows the strengths of our industry that we can adapt fast. We can do a lot regarding sustainability because we can save energy quickly if we focus on the right questions. In an absolute way of thinking, we are maybe not the greenest industry, but in relation from year to year, we improved so much that we can be proud as an industry of what we are doing.
Is it a hardware fix that puts an intermediary device, or is it a software fix, or is it like the new generation of Nova Star controllers and so on that will get around that?
Tobias Lang: So, in the first step, it is a hardware fix, what is done now, and in the second step, it will be mostly a software fix.
One of the things that I read in another article that was attributed to you was, and we were talking ahead of this discussion, you were saying how LED and LCD will merge, and I was thinking it kind of is because LCDs are using LEDs as their backlighting and so on, but you're talking about something different here, right?
Tobias Lang: First of all, I have to mention that it is tremendous what is happening in 2023 in the LED market. When I went to ISE, I was surprised at how many manufacturers talked about micro LEDs…
And some of it actually was true micro LED.
Tobias Lang: Yeah, that's true. But before this year's ISE, it looked like all the manufacturers of high-resolution LEDs were going to chip-on-board technology, and then the semiconductors offered a micro LED package, so a package again with where you could do pick and place like with SMDs to produce an LED panel, and a lot of companies looked into this and announced that where they will have a product in future based on this technology. And I wondered, okay. Is this even before COB has started to come to the top the end of COB because there is a superior technology?
This is still an open question. I can't answer it by today. But it shows how interesting it is, and the comment about LED and LCD merging is based on the fact that now nearly every former LCD manufacturer, like the Chinese BOE, is joining the LED race because everyone is accepting that there will be a lot of replacement from the LED or former LCD installations and based on this challenge, a lot of LCD manufacturers ask their health how to use the stuff they did in the past, and they found out that if they use the transistor film, they have an LCD, they could supply active matrix solutions based on LED as the video source. So driving every single pixel by a transistor to get a value as a product that is superior to what we know.
So I believe we will see screens that are more flexible, and more transparent than we used to, and this is incredibly interesting because it will change our understanding of the word display and screen to have just one dimension in a 4:3 or 16:9 screen. We have to start to think completely differently, and the funny thing is that the concept of active matrix and passive matrix, I don't know, maybe 30 years old or whatever, was there as long as I am in the industry, but it was always too expensive to drive every single pixel and there were no advantages, but now it seems like an active matrix became reachable in a price range, and there are supplies added values because you get such light and flexible products and for example, the hype of the transparent LED from Muxwave we saw at the last shows was one of the rising stars, gives us a first look in the first understanding of what could be the future, what could be possible and I’m pretty sure we will see many more products based on this technology.
Not everyone, to be honest, agrees that this is the way to go. There are some manufacturers which believe passive matrix is still the way to go, but there are also a lot of manufacturers which believe in active matrix. It is very interesting to follow this discussion and to see every single move of the different manufacturers, and this is for example, for me, a strong argument why it is wrong as a market player just to visit one show a year. That's the reason why you have to show ISE and InfoComm, Display Week because the different levels of information you get at the different shows by the different timing is helping me so much to face these questions.
I'm trying to wrap my head around this. When you're talking about TFT, does that limit the dimensions and shape of the displays to how LCD is made right now in terms of having mother glass, and the largest display you're going to get is 105 inches, or does that not really in play here?
Tobias Lang: Yeah, I'm not an expert, to be honest, on LCD factories. What is the limitation of the size? Is it the glass? Is this the Tft? Is it a combination? But for sure, this will have an influence on active matrix products.
For example, at Muxwave, it's about the drivers, the number of pixels, you can reach, it’s not about the transistors. So this question will be answered by yes/maybe if you have really high-resolution products, and maybe by no, if you have lower-resolution products.
Because you do a lot of work in the rental market, equipment is going to be put up and torn down repeatedly. You have to think a lot about durability, right?
Tobias Lang: Yes, that's true, and redundancy. This is one of the main challenges. If we face AV over IP, which will come into our market for sure, and we believe based on XMTP and IPMX but it is a change, and people in the event, want to be sure that everything is working out because if you look at a modern event what kind of amount of setup timing those professional players have left, it's quite tight, and they need to be sure that everything is working and therefore, we have to understand that our role is to make their work as easy as possible.
Having chip-on-board and things with hardened or more durable surfaces and having lightweight, grid-based systems, even down to something like the Muxwave product, which is super thin and would go up and down pretty easily, that stuff, I assume, is pretty attractive?
Tobias Lang: Yeah, that's one of the arguments we believe you will see those solutions in rental and staging too because there are advantages in rental and staging regarding transport cost, which is also a question which is regarding sustainability, and then it is an advantage quite often, in setup timing.
There will be a mix, and this is somehow in our life so incredible that you can always learn from one vertical to the other, so sometimes technology, which is done for integration, will be helpful in event and staging and vice versa.
Last question. I'm curious if there's a project that you've seen in the last year or so, digital signage or pro AV in some way where you thought, okay, that's really good, that's where this is all going.
Tobias Lang: As you can imagine, I was involved in several projects, and I don't want to mention any particular out of this, but I can tell you I'm really looking forward to coming to Vegas to see the fair by myself in real life because I did some running when they were setting it up while different shows in the morning and I always pass by, and when I saw the first images on social media, I was excited and this is for sure a big thing, and like I think everyone in the industry, I would love to see it in real life.
Yeah, I'm looking forward to that in December when I go to Digital Signage Experience. I've been watching it for a while now and actually trying to do a podcast with them, and maybe one day they'll say, yes.
Tobias Lang: I will for sure listen to this podcast.
Yes. It's the company that's the LED suppliers, the same one that put the LEDs on the Burj Khalifa in Dubai, Montreal Company. Alright. Tobias, thank you very much for spending time with me.
Tobias Lang: Much appreciated, Dave. Thank you for having the interest, and I enjoyed every single second.
Tuesday Aug 15, 2023
Bernd Albl, Umdasch - The Store Makers
Tuesday Aug 15, 2023
Tuesday Aug 15, 2023
The 16:9 PODCAST IS SPONSORED BY SCREENFEED – DIGITAL SIGNAGE CONTENT
The Austrian firm Umdasch refers to itself as The Store Makers - designing, building and kitting out retail stores at scale both in Europe and globally.
About seven or eight years ago, the company looked at the shifting state of retail and realized that staying relevant meant adding digital to its toolset - a decision that's played out nicely for the business unit, which is part of a much bigger holding company that is a global leader in construction - from office towers to single family homes.
I first met Bernd Albl earlier this year at ISE, knowing almost nothing about Umdasch and not a whole lot more about what the company refers to as shop-fitting. But after this podcast chat, I now know a whole lot more about the company and more broadly about the expectations, challenges and demands of properly designing and equipping retail in 2023.
We get into a lot of things, including defining experience in retail. We also have an interesting discussion about sustainability in retail - particularly a shift from doing store refreshes every five to seven years, to 10 years and longer. That's driven mainly by demands to stop tossing out perfectly good wood, plastic and metal finishings to make way for new designs. One of the beauties of applying digital is its ability to refresh a store's look and feel by changing files, not hard materials.
Subscribe from wherever you pick up new podcasts.
TRANSCRIPT
Bernd, thank you for joining me. Can you tell me what Umdasch does and what it means by store makers?
Bernd Albl: Okay, Dave. First of all, thanks for having me. Umdasch actually is a family-owned company within the History of Wealth brand for about 150 years. We are a shopfitting company, basically focused on the European market, and we are building stores in different areas, from fruit areas to grocery stores, the fashion industry, banks, automotive industry, all places.
We say we are businesses done, and we are around 2000 employees in our organization, and since around seven years, we established the business of digital retail because we saw that the business is completely shifting from the traditional millwork and handcraftmanship towards digital business and this is what Umdasch stands for, and our headquarters is in Austria, in Amstetten.
For people who don't know Austria like me, where would you locate it? Is it by Vienna or somewhere else?
Bernd Albl: Probably most of you might know of Munich, Salzburg, or Vienna, and Amstetten is in the middle between Munich, Salzburg, and Vienna, around one and a half hours away from Vienna towards Germany, in that direction.
Umdasch is quite a big company. I think I saw the turnover is 1.5 billion Euros.
Bernd Albl: So, this is when you're talking about the whole company. Umdasch is basically three company pillars. The biggest one is called Doka, which is a forworking company, and it is also established in the North American market.
So, we always say that about every building is higher than 200 meters in the world is by 80% built by Umdasch Technology, and the second one is ours one, it's the Umdasch store makes its shopfitting business, and the youngest group is Ventures, where we invest venture capital for disruptive technologies in the field of construction and in the field of retail technology. And in total, yes, we are doing around 1.5 billion euros turnover.
So you're pretty substantially backed in terms of your initiative. You're anything but a startup..
Bernd Albl: Yes, that's definitely right.
When you say you are doing the build of stores, is that the build, including the whole actual physical building or when you're talking about store makers or shop fitters, you're talking about the interior?
Bernd Albl: It's a very good question. The value chain in projects in the past, we usually were focused on the interior design, on the production of interior installation of interior shop fitting. But as I mentioned, as we are a big company, we are also building those big buildings with our technology. So our supply chain is moving in the direction of a very early stage of building. When it's in the building phase where Umdasch comes in and that’s where we want to jump in and guide the customer from building to the interior, to the operating of the building as well as the stores.
So we are serving the customer of the whole supply chain and operating chain of buildings, basically not just focused on shop fitting.
When you mentioned that the digital end of this was started about seven years ago. Was that the result of seeing an opportunity or because the retail industry and the requirements and ask of the retail customers was to incorporate this in there, so you had to add this?
Bernd Albl: Honestly, some years ago, we had very tough times in shop fitting. We had losses at the end of the year, and we have seen that with the rise of standard online shopping, we are faced with a very big shift of how customers are shopping in the future.
And this brought us in real trouble some years ago, and we were faced with the decision, what should we do? Should we run away, or should we jump into this new topic, integrate and develop our core business? And this is what we have done, and about it was eight years ago we sat together and said which technology should we start in terms of retail technology because there are so many technologies in the market, but what should be the first step for Umdasch which customers and retailers believe that we can deliver? And the second aspect was how we can handle the shift of parroting within our employees. Because some of them were afraid as they know that online shopping and digital technologies are our enemies and core business, and now we want to bring them into our core organization.
And therefore, we figured out two technologies at the beginning. The first was digital signage to replace a poster price screen, and the second one was electronic shelf labeling, it’s the price tag on the shelf. With those two technologies, we started the digital initiatives within the Umdasch group in terms of retail and where we started the shift of paradigm and the shift of the whole organization towards getting more and more digital,
That's not an easy shift to make for a more traditionally focused company. Is it? A lot of training, a lot of education.
Bernd Albl: That's right. On the one hand, we have definitely shown our employees the chance we have. On the other hand, yes, we have to convince them and train them how to integrate screens. It sounds very simple when you say just implement a screen but honestly, mistakes in the implementation of hardware are still done. When you look through stores in the market, air circulation maintenance, possibilities and all those things and we are not focused on one single store project. We are focused on rollouts where we built thousands of stores and there you have to really exactly plan how you implement this. Because if you don't do this very carefully and you have any troubles, for example, with air circulation and you have snack work afterwards and you have to make changes then it costs a lot of money.
So therefore we have to create the knowledge of our technical designers when they are designing the furniture and the stores. And there are many other aspects where we teach them how to implement this and not just in terms of digital signage but also in terms of electronic shelf labeling, and I would say it's booming since Corona, where we have seen many of the big retail chains there, which are investing hundreds of millions of dollars and euros. For example, Walmart, as you might know, had decided to implement electronic shelf labels in the North American market.
There is a few million hundred dollar project which is currently started. They have to exactly plan how to implement those simple little looking electronic shelf labels on the shelf edge. That it's not falling down, that it's not stolen, doesn't get broken et cetera, and that the appearance of the whole shelf is still working as soon as an electronic shelf labeling is put in front of the product on the shelf edge.
And there could be a real disconnect between building engineers and pure interior design teams with the technology that then has to go in. I've heard of and seen endless cases of why did they do that? And why didn't these folks talk to each other? So if you can keep that all within one business entity doing all that planning then you don't get those disconnects, right?
Bernd Albl: Definitely, and this was one reason why we have merged different departments within Umdasch together where we have brought together, for example, in Duisburg in Germany, we have built it up a new office where we brought together all the interior designers together with our digital retail designers, where the digital storytelling comes together with the shop fitting design, storytelling i would say, that you definitely see the red line through the customer experience when it's designed. And this was one of the mistakes we also made in the past, that we separated those teams that we said, ’okay let's plan the store, and afterwards we plan the digital applications’.
But, we instantly saw that it's not working, because the harmony and the whole concept wasn't given, therefore it's very necessary that as soon as and in the very early stage of the project, both competencies in the organization are working on the project and start communicating instantly together with the customer to realize shop fitting journeys of the customer which are working.
I don't know your business, but I assume for a more traditional shop fitting a company as part of a larger team that's doing any number of things, and you become a contractor to a larger project, whereas with this I'm getting the sense that you guys start right at the strategy stage and carry on through the project execution, and I'm wondering, do you also do aftercare, are you doing managed services where you're managing the digital signage component of the the retail network?
Bernd Albl: Definitely this is something you have to provide in terms of digital installation, as many other full service integrators we were serving in a very early stage from the concept until software development and installation. Also, operating means content creation, hosting onsite services et cetera. But, what we have seen in combination with shop fitting, we have seen that those competencies which we already have in terms of digital are asked in the future from shop fitters. That means that the retailer wants to have a single point of contact, the kind of support hotline for shop fitting topics.
If he needs other shelves, or if he needs when something's broken, or if he needs extra components. He doesn't want to contact different points within the organization. He wants to have one single point of contact, and we have also faced the topic of SLAs within shop fitting, so that we have to react within a certain period of time and fix the problem onsite.
Why? Because, the furniture which will be produced in the near future, will get smarter and sensors will be implemented. And as soon as you have technical and electronic components within the traditional shop fitting environment you need those services, maintenance and operating services for customers.
One easy topic is, for example, the cash desk.
Right. When you're talking about sensors, that's something you could do right now, but is it a case of the sensor technology and the thinking behind all of that needs to just mature a bit more so that it's fully integrated as opposed to something you add on.
Bernd Albl: First of all, yes, some installations we are doing are stupid ones, which are not reacting based on sensors. Yes, we definitely see that trend on the market. The sensors will be unable to allow the retail to get more flexible, to get more target oriented to decrease the loss by improper communication to customers when it comes to digital signage, for example, where there is the combination of sensors when you use it for audience measurement and smart targeting.
And we have seen sensors, weight sensors, light sensors, out of shelf sensors, however in terms of loitering, in terms of queue management where we see that the different kinds of sensors are getting more and more popular. And everything that pays in for the retailer to optimize processes because all of them have stuff topics that they don't find the stuff they need on the shop floor, so we have to help them to optimize the process costs and reduce the effort for the staff they have on the shop floor. And the other thing is to increase the shop experience for the customer, and sensors will definitely be one of the hot topics for the near future, and this is why you are seeing when you look on the signage market or on other retail technology markets that camera sensors, optical sensors and the radar sensors are getting more and more required from integrators and asked by retailers for smart solutions.
And when you're using things like audience measurement technologies, whether it's camera base, radar base, whatever it may be. What are they looking to get out of that? Are they just trying to understand how the store works or are they trying to do almost personalized, one-to-one messaging to shoppers as they come within a quote unquote a strike zone.
Bernd Albl: As I mentioned, one thing is definitely to optimize the one-to-one communication to the customer that you send the right message to the right customer. Let's say, if he is a male customer in the age between 25 and 35, that we play out the right playlist when he's looking on the screen first of all.
Therefore, optimizing the one-to-one communication to the customer, and the other thing is we are using the sensors for reducing process costs for the retailer. For example, one of the hot topics currently is off the shelf management or expired date management, this is something everybody's working on, how they can support the retailer to reduce those process costs for him.
And those are the most important two areas where sensors are currently asked for and audience measurement, for example, as I mentioned, there is one use case where you can use a sensor.
Let's talk about some of the trends you're talking about. I was reading through some Umdasch material as well as some interviews, and one of the areas that was mentioned as a trend is individualization. What do you mean by that?
Bernd Albl: We definitely see that many brands are closing their stores. Many are reducing the number of stores they have in the field, and they want to increase the customer experience when they're entering the store, and one big criteria is how to hold the customer as long as possible in the store and to increase his basket to create a high level of individualization for him. Individualization means that we show the right information to him to give in an atmosphere and ambient design where he feels convenient and also we compare a little bit when you go online shopping or when you go on websites due to cookies and other trackers, it's very easy to flexibly create the web information based on your requirements, and this is something the customer has used and is standard for him and this is in some kind we try to transform those flexibility of experience rooms to the real store. That means that we want to play out the right stores, that we send the right push notification on the mobile application for his checkout devices that we probably play the right sounds due to the audience which is inside the store, that the influence is light based on the outside ambient, and there are so many possibilities on the turntable. You can increase or decrease to create an more and more individualized experience for the shopper.
Right. You mentioned experience several times. How do you define experience in a retail environment? And I'm also curious how the retailers define that when it comes to applying digital.
Bernd Albl: This is a very good question. Honestly, some of our retailers don't know it exactly by themselves and this is something when we are working on a concept, what we evaluate together and one starting point is definitely the brand itself, the values of the brand. The atmosphere that the brand wants to communicate, that they want to transport and what are the visions and what is the reason for the store?
What is the offering of the store and what is the message of the store? And as soon as you have answered all those different questions, you can create the storytelling around that. At the end, this creates the experience and from the consulting, our experts are using the right materials, they're choosing the right colors and the right light atmosphere.
We bring in the right technologies, the right touch points as soon as we have defined together with the customer the right use cases. By the way, this is one of the big mistakes many retailers are making over the concepts. First of all, they're thinking how many screens to be installed? Where should we place a screen? But they don't think about the real use behind the benefit of the touchpoint, and this is the way we create digital touchpoints. First of all, we say what benefit we wanna create.
Then, we look at the area of the story which we want to offer and technology is the last point of the whole story. And all this together, is the key of success, and we call it already experienced stores to bring them alive. And I want to add one more thing is we always have to keep in mind when we create those stores that we have to think mid or long term in terms of operation. Most of our customers want to have the most fancy store possible, but we have to think what is in three years, what is in five years with the store.
We also have to keep in mind how we can run the store, how we can operate, how we can keep this level of experience up for the next year, not just for one year. And this is also a very important point when you start designing an experience store for retailers and customers.
Yeah, they have to think about a five to seven-year creative budget, that's gonna be refreshed steadily, and they have to think about technology that's somewhat future-proofed and isn't gonna look old in five years.
Bernd Albl: You're talking about five to seven years. Honestly in Europe, I don’t know what’s happening in North America and Canada.
We are faced with the topic that our stores have to last for the next 10 to 12 years, we are asked by the retailers. This is a very hot topic currently due to sustainability and ESG, that we have to develop stores that last much longer. So therefore, we as a shop fitter have to rethink our business model because it's definitely right what you're seeing, but in the past we have designed stores about every five to seven years at that time, and about 20 years in pharmacy stores. But in the near future, I think within the next three years we have to have concepts ready that enable us to realize concepts that are economically beneficial for a shop fitter to create stores that last more than 10 years. One of those things could be operating and digital services you provide and this is one of the big challenges for shop fitters in Europe they have currently faced and I think it's a very positive challenge because it has to be done.
And this has to primarily do with waste material at the end of that five to seven years that you're throwing out all the wooden cabinets, the metal work, the plastic and everything and refreshing the whole look of the store, and therefore you're filling a landfill site with all this old retail design material.
Bernd Albl: Exactly. All those topics you have mentioned are paying into this topic and the big challenges we have is, for example, Nike is one of our big customers in Europe. They're using used materials already, and we definitely see in the design process that the demand for used and refurbished materials is getting high. The quality is not there yet, what is expected by the retailer is that it lasts for a certain period of time. But the trend is definitely going in that direction, and that's the reason why we have implemented at the EuroShop this year, a sustainability database within our organization where we do a lot of research for refurbished materials, how long they last, how you can use them in shop fitting, and therefore we are currently investing a lot of money and time to create the knowledge you need and to fulfill this demand, which is definitely increasing over the next two to three years.
You mentioned Nike. And as one of your main clients, there seems to be two kinds of tracks in retail design lately when it comes to digital, there are stores like Nike's and other particularly athletic apparel kinds of retailers where they, as well as fast fashion, where the stores are just visually noisy. There's all this digital going on, and that’s it's very much digital forward, and then the other track, particularly in luxury retail is, it's very minimalistic where there's digital integrated in there, but it's definitely not in your face. It has a very distinct purpose and kind of blends in with the overall design. Is that what you're seeing?
Bernd Albl: Yes, this is something that we can underline. Unfortunately, we are not doing the digital installations for Nike. But this is definitely a goal that we are heading towards…
To calm them down?
Bernd Albl: I would say digital has a very major part of the storytelling of those stores. When you look at night towns, for example, it's for the whole experience, digital applications also enable the retailer to entertain a big number of customers on the shop floor.
When we come to luxury stores where you have a limited number of customers on the shop floor, at the same time, you're focused more and more on the one-to-one communication from staff to the customer. And, there is also much more to the product, the real product in the center of the storytelling.
And they're much more focused on the materials they're using for shop fitting. And the luxury feeling and being luxury doesn't mean to be digital. That's the reason why we don't see too many digital applications at luxury stores. They are more minimalized there, because the product is in the front and especially the staff is in the front.
They're in there for the product, not just attracted by the shiny lights.
Bernd Albl: That's right.
What does digital represent for the shop fitting side of Umdasch’s business? I think I saw something saying, it used to be maybe 10%, but now it's roughly half.
Bernd Albl: No. I would laugh that it would be half. My boss always says, Bernd, you have to do at least 50% of our total turnover to be digital. Probably in the future. Yes. Definitely. This is something where we see the trend because digital services are also getting into traditional shop fitting applications.
Bernd Albl: Currently, we're doing around 10 to 15% of our total turnover number digitally.
And are you primarily operating in Germany, Austria and Switzerland, or I assume that some customers take you all over the world with the projects.
Bernd Albl: This is a strategy we have within the whole organization of Umdasch. With the shopfitting department we are doing business basically in the whole Europe, in the Middle East, in Turkey and in some areas of North Africa. And, we say in those areas where we are actively doing business.
Last question. If I was traveling through Europe and asked you, okay, I'd love to see one of your stores where you've guided the project and deployed and is a reference case you can talk about. Where would you send me or somebody else to go look?
Bernd Albl: When you fly over from Canada to Europe, I would say let's make a pit stop in London and go to Harrods. So, we are currently rebuilding Harrods back to its 1920s.
Oh, wow. Interesting. I'll be in London in mid-September, so I'll have to pop by Harrods. Take a Trip to Knightsbridge.
Bernd Albl: Perfect. But give me a ring. I will come over there and let's go there together.
Alright Bernd. Thank you very much for spending the time with me.
Bernd Albl: Thanks for having me and all the best to Canada.
Tuesday Aug 01, 2023
Bernd Hofstoetter, M-Cube
Tuesday Aug 01, 2023
Tuesday Aug 01, 2023
The 16:9 PODCAST IS SPONSORED BY SCREENFEED – DIGITAL SIGNAGE CONTENT
Italy's M-Cube has quietly grown into one of the larger and more pervasive digital signage solutions providers on the planet - with deployments in more than 100 countries globally, across some 60,000 retail stores.
It does mainstream retail and QSR, but the sweet and lucrative spot for Milano-based M-Cube is servicing the needs of luxury brands - something both Italy and France seem to have as specialties.
M-Cube has grown both organically and through acquisitions, including the purchase of a French firm run by Bernd Hofstoetter, who is now M-Cube's Paris-based CEO.
In this podcast, you'll hear about how M-Cube operates in Europe and globally, industry trends (particularly in retail), and how it approaches and works with luxury brands in their bricks and mortar stores.
Subscribe from wherever you pick up new podcasts.
TRANSCRIPT
Bernd, thank you for joining me. Can you give me a rundown of what M-Cube is all about? I think there are a lot of North American listeners who probably aren't familiar with the company.
Bernd Hofstoetter: Yeah, Dave, no problem. M-Cube is a company that has existed for over 20 years. We started 20 years ago out of Italy, with mainly audio solutions for retail, and five years later, over 15 years ago, we moved very fast and very strongly to the digital signage growing market, and we became, over the years, the leading provider in Italy, and then we bought different companies in Europe, and today in 2023, we claim to be one of the top in-store digital solution providers based in Europe, but with a global footprint delivering to over a hundred countries in 60,000 stores to 500 clients our digital solutions like audio, video, content, technology, and more and more as well omnichannel.
Would you describe what you do as a solutions provider or an integrator?
Bernd Hofstoetter: More the first one. I would say that at the beginning, we were more an integrator and we became much more a full-service solution provider.
We are moving more on the first part of the value chain, meaning the customer journey, and content development because technology is everywhere around and to fit the right solution, a good mix of the best content and the right technology, and of course, the power of deployment and service is the most important key success factor in this industry for the next 5 to 10 years.
Was it a case where the company saw the opportunity to expand its services, or they were being pushed in that direction anyways by customers?
Bernd Hofstoetter: Yeah, that Dave is very often like that, the strategy you do afterward. So that means, of course, there were some global customers who were pushing us to deliver video solutions, so we moved to video. And as we have a lot of global customers, especially in luxury, we are, of course, a company that can deploy in over a hundred countries this kind of digital solutions in retail.
Yes, it is pushed by the clients when you start, but of course, over the years, then it becomes a company where you add some parts where you are not so strong, so you buy from time to time some expertise from outside to complete your value chain.
So you're one of those companies that were acquired by M-Cube. You're the CEO of another company in Belgium and France. How did that go?
I'm curious because it strikes me as Europe is still regional. There are particular companies that are strong in Germany, Italy, France, or Spain, but they're not necessarily pan-European.
Bernd Hofstoetter: Yes, I come from a company acquired by M-Cube, and we had the journey to integrate all the companies we bought to integrate in the last two years. Of course, there are still local champions in the German region or in the UK or in France, et cetera. But the tenders are becoming more and more European or even more and more global.
I think if it continues like that, the pure local providers, they probably will have a bit more trouble in the next years to grab the business. We see more and more European-wide, or over several countries in Europe tenders.
And that's not easy, is it? Because of all the different languages and everything else.
Bernd Hofstoetter: Yes, but we have now a position in every main important country in Europe. I'm not talking about little countries like Luxembourg but all main countries. Italy, Spain, France, Germany, UK, Netherlands, Belgium. We have a local team where we deliver local, but as well, European or global solutions.
Your company works a lot with luxury retail. How important is that particular vertical market to you guys?
Bernd Hofstoetter: Of course, we have grown in luxury a lot. I think we understand luxury very well because this sector is extremely demanding, it's extremely global, it's extremely service oriented and there's still a lot to be done in the luxury sector, that’s what we see, so it is important.
That's the reason as well why we moved more and more to the content side in the last years. I think we are very fit for this sector.
And it's a very different sector to approach as well. Like me, I get a sense that luxury retail wants to be subtle and has a kind of a minimalist bend to the way they approach digital in their stores.
Bernd Hofstoetter: Yeah, totally. They are not approaching it from the technology side. They are approaching it purely from the customer's side, that's what we love. That's what we know to do. It's a specific code, what we say in our business, specific code when it comes to luxury, it's a bit different world to address to, to talk to, to communicate to.
Because a lot of the luxury brands emanate from Italy and France, so have you experienced organic growth because a lot of those companies are there and they see what others are doing and come to you?
Bernd Hofstoetter: Of course, as we were strong or still strong in Italy and we have acquired a company in France we could have a good positioning, but we are now working as well with luxury companies, not only based in Italy or France. So our culture, our compensation, and our interpretation of the luxury challenges in terms of customer journey seems to be very appreciated, not only to the Italian-based or French-based luxury groups.
It would strike me, as an outsider, not spending enough time thinking about it, that the budgets that these kinds of retailers have are quite different from what you would have for let's say a fast fashion apparel retailer.
Is that a fair assessment or wrong?
Bernd Hofstoetter: In the end, it comes to the return on investment. It is not about what we are thinking about whether it is the fast retailer having a lower budget or a luxury group. It's about return on investment at the end of the day.
The solution we engineer, we design for our clients, they need to bring the expected return on investment in their stores or boutiques.
No, I would not really say that a luxury retailer has double the budget of a fast retailer or whatever. It really depends, and at the end, it's the return on investment.
It's interesting, with one of your main competitors, and I'm sure business friends as well, Trison based out of Spain, they work a lot with Inditex and there's a particular brand, Lefties that has stores that - I haven't been in one yet - but they look pretty wild in terms of the amount of digital in there.
Is that something that you're being asked about or is it, or would it be the opposite of how a luxury retailer would approach things?
Bernd Hofstoetter: No, Lefties is, of course, an interesting case. I've been to one of the stores in Barcelona, Dave, and it's clear that in stores like that where you would expect a bit of digital, but when you see the level of digital investments in the store, of course, it's really amazing. But it shows one thing, screens everywhere.
The generation who go shopping today to Lefties, they are grown up with screens, and there's no way back. I can give you a little anecdote on that. We had a client five to six years ago, and they deployed at that time 700 nits Window screens in 200 stores.
After five years, the lady said, “Hey, Bernd, five to six years ago, we were the first. Now everybody has a Window screen, and much more, and the problem is that they are 2000 or 3000 nits. Ours look old-fashioned. I think we'll stop.” And I said of course you can stop, but you will not be recognized anymore. What is the story? They invested in the new generation, in the new technology with 4,000 nits screens. So there is no way back, and Lefties is one interesting case for that, Dave, that for me, there is no way back. Food retail is very active at that moment with screens. For example, we said years ago that food retail will likely not invest anymore. There's no way back. More and more screens everywhere.
And what do you mean when you say there's no way back?
Bernd Hofstoetter: There's no way back to less digital. There's no way back. For us, it's clear that perhaps there will be fewer stores, but the investment per store in digital will grow over the years. We are totally sure of that.
Yeah, I guess you have a digital native shopping crowd now that maybe you didn't have even 10 years ago because I can remember retailers screening out a store, like there were screens everywhere in a store, particularly for sports retailers, and then when they did a refresh, sometimes they would strip out a lot of those screens because they just realized it was so much noise. Have you experienced that at all?
Bernd Hofstoetter: No. We have very few cases where the retailer has not integrated in the next version of his retail chain, of his concept, more screens. Very very few. I really need to think for a long time to find an example. I remember there was one or two in the last five years, but that's absolutely the exception. That's not the rule. Not at all.
What's been your experience with interactive retail?
Bernd Hofstoetter: It’s not so easy to do interactive in retail. Then Covid wasn’t fair to the tech, so interactive was somewhat totally stopped, but it’s restarting. We see some projects in some specific markets, but it is not like what we imagined 10 years ago when everybody said everything will be interactive in the store.
Yeah, I've found that a lot of interactive efforts in stores just sit orphaned. They don't get used unless somebody encourages them to use it.
Bernd Hofstoetter: We think more about the interactive, for example, as omnichannel an solution to help the salesperson in the customer journey, so to upsell something in the store, but for the end customer, it is still not so easy to make use of these technologies. Yes, I totally agree with you, Dave.
So for a salesperson, it's like assisted selling, this is a tool they can use?
Bernd Hofstoetter: Exactly. That's what we can offer.
When you go into engagements with a new client, let's say it's a luxury retailer that you're not yet working with, what are those first questions you guys are asking?
Bernd Hofstoetter: The expected return on investment of a digital solution, because it does not make sense to make technology for technology. So the benefit of the technology, of the solution is the key for us. It's absolutely key.
And do the clients have a sense of that? Because I've sat across the table from customers in my consulting days and asked them why, and in a lot of cases, they couldn't really quantify that.
Bernd Hofstoetter: More and more. We have more and more technology to understand what could be the return on investment of a digital solution.
We always run proof of concepts or tests or pilots. But you are totally right. When I look back 10 years ago, it was like, oh, we need to have a screen. Today, this is really totally over. We hear questions like, “What is the objective?” “What is the return on investment expected?” “What do we really want to achieve?” And from there, it's the design of the solution and the integration of the technology into the customer journey. These are the most important points at the beginning of the discussions.
Are you marketing your own technology, or do you work with partners? Obviously, you would on the display side, but do you have your own software?
Bernd Hofstoetter: Yes, Dave, one of our DNA is to have our own platforms, audio and video platforms. Of course, if the customer says, I want to work with this non-proprietary platform, we can do that. But we prefer to run our service on our platforms where we have invested over the last 15 years now. We still have a lot of software development people in the company continuing to develop the platforms, hosting and maintaining, and evolving the platforms. Yes, it's one part of our DNA, our proprietary platforms.
Are you typically, or most typically managing the networks for your retail clients?
Bernd Hofstoetter: We are more and more integrated into the networks of our clients. Monitoring is becoming very important. Of course, that was not so important years ago. That's now key. Proactive monitoring is very important. Reliability and security are becoming more common in the last two years in big tenders; the security level and tenders are only increasing, not decreasing, only increasing. The request for more security is increasing. That's clear as well.
Yeah, I saw a comment from your president, Manlio that you were getting into some deals and replacing existing software vendors simply because you could offer the level of IT security they could not.
Bernd Hofstoetter: That's totally true. For example, one and a half years ago, we had a global deal where we replaced the existing provider and the main driver of this client was security level to enhance.
You're operating, as you said, in the north of a hundred countries. How do you manage all that, like do the deployment in places like China and India?
Bernd Hofstoetter: In China, we have an operation. In Hong Kong, we have an operation. In North America, we do it with a partner. We have a network of installations. We have three hotlines in different time zones. So we cover our customers 24 hours, seven days a week.
China is a bit of a mystery to a lot of people within digital signage just because it's such a huge market internally. How do you compete there?
Or is it more a case o,f you have European clients who are expanding into China with their luxury retail?
Bernd Hofstoetter: We do both. We help our customers from Europe to serve and support in China, but we have a local business development team as well. Yes, China is, of course, totally different in terms of competition, in terms of market environment, that's clear, but it's a huge market. We have been there for a couple of years now, and we are quite happy.
When you're going into competitive situations in China, do you even know the names of the companies you're competing with?
Bernd Hofstoetter: After some years, yes. In the end, we can identify the relevant set of competitors in China.
Are they mostly domestic companies?
Bernd Hofstoetter: Yes, mostly domestic.
So you would never bump into in North American or European companies?
Bernd Hofstoetter: No.
For the technology, are you seeing trends in terms of what's interesting to your customers?
Bernd Hofstoetter: We see the combination of the online and offline world, which is not only a trend; it's a real demand from our clients to prolong the online journey into the store. So that's something where we are investing. We have a special team for that, and we upsell our clients with this kind of Omnichannel solution. This is one part. Then, of course, technology is becoming more and more powerful. Because you better integrate it into the customer journey.
I would say that's the two main drivers for technology coming from our clients.
So when you're talking about omnichannel it's this whole idea of retail media networks?
Bernd Hofstoetter: No, it is not the retail media. That's another subject we are looking at now.
But it's about the clienteling, it’s about e-commerce in the store, this kind of application. The retail media, Dave, we discussed in Munich as well, is something that has been in Europe for years, and there is now a new dynamic of the retail media and of course, with our stores deployed, we have quite good positioning here on that.
Would you envision third-party advertising going into places like a luxury retail store?
Bernd Hofstoetter: No, I don't think so. I think there are sectors where retail media in the store will not be applicable because there are retailers who want to manage the exclusivity of branding in their stores.
I was working before in the advertising industry. I know about this world. I don't see that even in five years in a luxury store there is advertising for automobiles or whatever, don't see that.
And most of what you do is luxury brands for beauty, for timepieces, bags, all kinds of stuff like that. Do you deal with automotive as well?
Bernd Hofstoetter: Yes, we have a team specialist in automotive. We had one year ago, a huge tender for a global rollout for a global automobile company. In automobiles, we are moving very fast. That's another sector where we still see a lot of business to be done. Telecom, we are strong as well. Food retail, we are reshaping it. Of course, fashion is a bit down in Europe. We had some bankruptcies in fashion chains. So fashion in Europe is not in a super shape. But automotive, yes, it’s a sector where we have acquired a lot of experience in the last three to four years now.
You've mentioned, or we've talked a lot about luxury, but you also have QSR clients, correct?
Bernd Hofstoetter: Yes, we have in Italy QSR, we have in Germany, QSR. We have in Spain a bit of QSR in France as well.
Those are very different meetings, I suspect.
Bernd Hofstoetter: Very different. QSR, the subject very often comes with franchisors, and there's a lot of franchise business out there for QSR, which is again another world. Not in terms of finances, but in terms of technology, technology is not a subject. The menu boards are not a problem at all. It is; it's not a challenge. It's more the contracting and invoicing part where you have to, where you have to work with many franchises or single sites one by one, which is a bit different.
Is your company and your development team looking at AI and how it can be applied to what you do?
Bernd Hofstoetter: We look to that, of course. I think everybody is looking at that. We have our ideas how AI could improve efficiency for us.
I'm curious about North America. You mentioned that you have a business partner over here. Is the plan one day to establish an office here as well?
Bernd Hofstoetter: We are thinking about it. When you see our geographic footprint being in Europe and Asia, you could say, “Hey, M-Cube, why are you not covering the North American market?” It's something that we have to think about, sure, but we want to do it right. That's very important because America, of course, is a market in itself, and we want to make it right if we make it with a known and operated structure.
Does it present a barrier at all that you don't have an office there, or can you talk about your partner?
Bernd Hofstoetter: We do not have the feeling today that we do not get the global deals because we do not have our own office and team in America. So for us, It's not a downside. We see that if we move there, there might be a potential upside.
It's a nice to have, but not a need to have.
Bernd Hofstoetter: Today, it's not the missing partin our business, but we see that the deals become more and more global and that it would really make sense of course to have a strong team in America.
I'm curious about marketing and getting your name out there. When you work with these incredible luxury brands, they tend to be very quiet and cautious, and I'm guessing that it's not often that they allow you to talk about your projects with them.
Bernd Hofstoetter: That's totally right, Dave, unfortunately, but that's the price to pay. But to be clear, luxury is a very interesting and challenging world, and to be honest, we do not need to do our marketing for that because when people move from one brand to another, and they worked with us in Brand A and will work now in Brand B, it's the best advertising we can have.
Is there a store that you can talk about, that once people say what's your kind of showroom or the one that you send people to if you can?
Bernd Hofstoetter: In Milano, we have several stores of several global luxury chains and retailers. When we do a store visit, we mainly do it in Montelliana in Milano, where you see the power of the M-Cube solutions life.
So once you engage with a prospective client, then you can hopefully get them to Milan and show them around that way.
Bernd Hofstoetter: Yeah.
You are based in Paris, correct?
Bernd Hofstoetter: I'm based in Paris, yes.
But you're back and forth all the time, I suspect.
Bernd Hofstoetter: Yeah, but I'm based in Paris today.
It’s nice to have two cities like that to cycle between.
Bernd Hofstoetter: Yes, very nice cities. Paris and Milano.
Alright, Bernd, thank you very much for spending some time with me.
Bernd Hofstoetter: Thank you, Dave. Take care.
Wednesday Jul 26, 2023
Digital Signage Yearbook 2023
Wednesday Jul 26, 2023
Wednesday Jul 26, 2023
In this special episode, I chat with Balthasar Mayer and Antonia Hamberger of invidis Consulting, the Munich-based firm that has for many years produced an annual yearbook that takes a deep dive into the digital signage industry.
The new yearbook for 2023 is out, with versions in German and an international one in English that includes quite a bit of copy and input from Sixteen:Nine.
This podcast goes into the story behind the yearbook, its growth beyond first Germany and then Europe, and what readers will find in the 2023 version - which is some 200 pages of editorial (not advertorial) content, including regional market analyses.
The good news - it's a free download.
Tuesday Jul 18, 2023
Loek Wermenbol, First Impression
Tuesday Jul 18, 2023
Tuesday Jul 18, 2023
The 16:9 PODCAST IS SPONSORED BY SCREENFEED – DIGITAL SIGNAGE CONTENT
Things are changing - and both buyers and sellers are getting more knowledgeable about how to design and execute digital signage projects. But it's still nice to have a chat with an AV solutions company that resolutely insists on establishing the objectives behind a job before even talking about the technology that might get used. And how much of it.
The Dutch firm First Impression made its first impression with me when it kept getting recognized earlier this year at the global Digital Signage Awards, which were handed out back In February during ISE in Barcelona.
"Who are those guys?" I was asked.
"No idea," I replied.
But now I do know, because I met Loek Wermenbol, the company's Retail Strategy Director, at the recent Digital Signage Summit Europe in Munich. We found a relatively quite little area in the hotel lobby and had a great chat about the origins of First Impression - which is located down near Eindhoven. We talked about a lot of things, notably how it approaches engagements with clients, including the Dutch beauty brand Rituals.
Subscribe from wherever you pick up new podcasts.
TRANSCRIPT
Tell me about First Impression. What do you guys do?
Loek Wermenbol: We are First Impression, what we call on paper an AV integrator, as many companies over here …
But you're qualifying that.
Loek Wermenbol: No, maybe other people qualify us as an AV integrator in the market and we still are.
They put you in that bucket, but there's more to it.
Loek Wermenbol: Yeah, there's definitely more to it and I think our proposition that we have is a little different than some of the other integrators in the market. First of all, strategy is a really important part of what we offer and we really try to help the customer to ask the right question, and sometimes that's needed in the process. Yes, they have knowledge, but most of the time, not all of the knowledge is needed to do really good integrations.
Because in part, they're fixated on a display or something other that's captured their imagination.
Loek Wermenbol: Yeah. It can be technical or otherwise, if other departments are involved, information can be fragmented throughout the organization, and it might be hard to bring that together to form the right question, and sometimes there's just a lack of knowledge, and that's okay because it's a different field of play for a lot of retailers.
Yes, they have big online marketing teams, etc. But doing in-store communication, it's a little bit of marketing, it's a little bit of formula, it's a little bit of data, and that combines and is needed for a good integration. So if you help your customer determine what that right question is and where we actually can help them solve problems or help them with the threats they have in the market, or enlighten their opportunities. In the end, the ROI on what we do right and what we are going to install in a solution will be much better. So rather than just answer…
And it's gonna scale out as opposed to being one of.
Loek Wermenbol: Yeah, of course, and we're in the scaling business too, but you have to scale the right solution rather than just a solution, and of course, we also integrate Windows screens and sometimes that is just step one.
Right, but then they're a customer and can ask you for more.
Loek Wermenbol: Definitely, sometimes the challenge is bigger, sometimes they already have digital in place and need to replace us, or want to make the second step or the third step in the process, and sometimes it's the first step for retailers in the world of digitization on the retail floor.
And then the steps are different, but still, you have to focus on where you want to be in three or four years also as a retailer. I think at First Impression, we help them really well in defining those steps towards that in three to four years, and step one can be an easy step. Let's do a rollout of Windows screens because it is almost in the industry, a no-brainer in integration.
Still, you have to do that correctly, with the right content, etc. There is a lot to talk about. You can talk for half or an hour about just Window screens, etc. But, that strategy part is you ask what do we do differently, it's just one part. By offering a more holistic service package to our customers.
So it's a lot more than where do you want to put it, how many do you need, and when do you want it in?
Loek Wermenbol: Yeah. Because if you're a supplier of hardware, you're just a supplier.
Yeah, you're not a business partner.
Loek Wermenbol: Exactly. If you are more on the strategic side and you are helping your customers achieve their business goals or to tackle their problems, you are on the strategic side, and you're a totally different person on the table. When it's from a strategic point of view, rather than just a hardware provider and the added value is much bigger, and otherwise, it's just about how fast can you do it, what's your price, etc.
Yeah, so let's back up a little bit. Did the company start that way or did they realize that this is the customer house and this is how we should evolve, and how long has the company been around?
Loek Wermenbol: No, it definitely didn't start that way at all. The company started 26 years ago already, and it literally started…
In the time of CRTs.
Loek Wermenbol: Yeah, one of the owners who started the company was a DJ and into music and creating cool parties, literally starting from the basement of his parents as many of those beautiful stories go. And he bought some materials to make the show a little bit more attractive, more materials, and at one point, he had so much of materials that he could rent out some stuff.
That's where the business began and that's where the First Impression began. So that was really more the rental side of the AV technology, and through the years that of course had evolved and after roughly six to seven years, fixed installation became a part of the organization, and basically everything turned around and it became a bigger part, until where it's now.
Almost the only thing we do is that we still have a little department that does temporary projects but it's mainly fixed installations as it goes in the market. And we focus heavily on retail. Roughly 80% of what we do is retail, and the other part is Oracle experiences, which can be an experience center, , a business center, a museum, or a building that has an experience factor in it.
And you’re based in the Netherlands?
Loek Wermenbol: Yes.
Is that the primary market, or are you kinda across Europe?
Loek Wermenbol: It started of course out in the Netherlands as our home market but definitely not our only market. We have an office in the south of the Netherlands, our headquarters is in Tilburg. We have an office in Amsterdam but also recently, we opened offices in France, and also in Germany. But we're already operating globally, and doing installations all over the world and on every continent.
Is that because it starts with something more regional and as they say, can you also help us out with the store we're opening up in Shanghai?
Loek Wermenbol: Yeah, and it really depends on the brand, for example, if you look at Rituals, those are big Dutch brands.
What do they sell?
Loek Wermenbol: All kinds of beauty products and everything you need as a woman to feel good.
So, nice high-margin products.
Loek Wermenbol: Nice high-margin products.
They probably don't want to say that, but that's the reality.
Loek Wermenbol: Yeah. It's a really beautiful brand and it's actually a brand that a lot of trade retailers look at because they are there in the markets on lots of different levels and also in AV technology.
And pardon the pun, for them, first impressions are, I suspect, really important.
Loek Wermenbol: They are, but actually there is a funny story because we really wanted that client in the beginning, but they were quite resilient against AV integrations because they thought it didn't resemble their brand because it's all about serenity and the body and the products, and if you look at their stores, you may figure out why, but we actually did two things.
One of them was to create a piece of content. It was really simple, but with a little bit of animation in it, in line with the branch values of Rituals, and the other thing we did, we made a breakdown of the comparison between the integration of a Windows screen, comparison with paper, and the number of replacements they did with paper. And that was a really interesting business case, and those two things together with the setup we created in our unique experience center in Tilburg, managed to get them over and finally convinced them to go into digital, with little steps. The first step is a window display, a cash desk display, the first thing most retailers will do. But now we evolved from that and actually, Rituals is the perfect client to work with because their teams now know how to operate in the equation together with us to get the best results and to do innovations that are unique in the market.
And it's not just you going to them trying to sell them something new, like, “Hey we went to this trade show and we saw these new amazing displays. You should have some!”
Loek Wermenbol: No. Because then you're selling technique, and we never start with hardware. We always start with the right challenge and question.
For instance, we created a unique piece for them that's all about perfume, and they didn't sell perfume for a long time because it's a hard category, lots of big competitors, high loyalty with brand loyalty with which potential customers look for themselves. There's always one fragrance that they've had for ages, so how do you convince people to switch?
Yeah, completely foreign to me, but…
Loek Wermenbol: Maybe some listeners will recognize this.
But we created a really nice piece that not only looks beautiful but actually does the job of convincing people maybe to try one of the perfumes of Rituals, and in the end can convince them to replace a bottle that has been there for ages. Of course, if you look at that from an aesthetic point of view, it looks beautiful, but the magic is inside with how we use sensors and data to figure out which perfume fits the market. Actually, we were awarded that two times with the best digital innovation for retail in 2022.
Yeah, I wasn't aware of your company, but if I remember correctly, at the Digital Signage Awards, your company won two or three awards.
Loek Wermenbol: Yeah. At the Digital Signage Awards, we won three and a recommendation. So we were getting back and forth to the pool.
And I was like, who are those guys?
Loek Wermenbol: I know. I think we're a challenger in the market and sometimes it's good to be a challenger. I think one of the big advantages we have is we're still privately owned. So there's no private equity or something.
How many people?
Loek Wermenbol: Almost 200.
Okay, that's a good size company in this industry.
Loek Wermenbol: Yeah, definitely, and did a turnover of 40 million euros last year. So that's quite a decent company to show it like that, and of course, you were there, last night, we were awarded as the rising star in the industry. I think that says a lot.
We are noted in the market, not only by our colleagues and the industry itself, but also by retailers, of course, because we do something different and we try to help them with the total process of integrations, in a smart way that it also connects to the total customer journey because that physical space where we do the integrations in the end we’re a specialist in doing communications on the retail floor. We're more like an agency than a hardware integrator. We use the hardware components to make it possible, but in the end, it's part of a bigger thing.
Yeah, I was going to ask about the creative side of it. Obviously, it didn't start with creative because you were doing DJ rentals and things like that, but did you add on in-house creative capability because external agencies, maybe the agencies of record for these different brands, didn't really get it, didn't understand it and was this a need, or did you just see it as another revenue stream?
Loek Wermenbol: No, definitely not the last one. In the end, you have to do that properly, and they will be additional revenue.
But there's a skillset and insights that an agency isn't going to have.
Loek Wermenbol: Yeah. We started roughly 10 or 11 years by hiring the first person that did content creation and mainly because we noted that we do a perfect installation, and then somebody comes along and puts on a piece of content and basically wrecks the solution because the most important part in communicating with the clients and addressing the purpose is that piece of content.
So if somebody's going to create it, who doesn't know how communication in-store devices works, ninety-nine out of a hundred times, it won't be the right piece of content.
Yeah, and you talked about Rituals and the serenity idea or vibe, so to speak, and if you had third-party agencies who just drop something in, it would be visually jarring potentially.
Loek Wermenbol: Yeah, and we did a lot of communication for them. We created, and we worked together because they have an in-house agency too. Rituals are kind of a different story in that way. So we helped them in the beginning and now they're creating a lot of the content themselves because they know how to do it and they have a really skilled team inside.
So that's how we work too. Sometimes we start off and create content first and show the internal agencies or people how to do it and otherwise in some other cases, we keep on creating the content for them. But it's so important because it is also for agencies that do generic commercials or socials, etc, creating content for this matter is totally different because there are so many factors that you have to think of.
Dwell times, sight lines on and on.
Loek Wermenbol: Exactly. Position, lights, dwell time, passage time, angles, UXs, et cetera. Even the privacy of people, are we going to use a device when it's tilted or does it need to be flat, etc. It's all going to determine what your content looks like, and it is so important in the end to be successful with that solution and to have an ROI on that solution, and the content is a major part of that.
There's been a lot of noise in the last, I would say, six months in particular around Retail Media networks, and I was interested, we were at this conference in Munich, and I've heard or spoken with a couple of people, it's all getting a little fuzzy to me after two days, talking about Retail media networks, incorporating third party advertising, programmatic advertising into a store, and that actually rattled me a little bit because it just didn't seem right.
I understand the idea of endemic advertising for brands that sell in the store, but do I really want to see a T-Mobile ad in a Ritual store? I know they wouldn't do that, you know what I mean.
Loek Wermenbol: Yeah, Retail Media is almost a buzz word right now, but we actually started operating our first Retail Media network for one of our clients already, I think, two or three years ago.
And they've been around in some form for 25 years.
Loek Wermenbol: Yes, but in a serious form, it's not that long. And of course, retailers are starting to know that, “Hey I can create a valuable position over here,” and brands like it too, because if you do it correctly and which is important, then it will be an added value for everybody involved. It will be an added value for the advertiser because it's related to a product he can buy in the store…
…which encourages sales ideally.
Loek Wermenbol: Yeah, it encourage sales, and of course, it is interesting for the operating party of the Retail Media network too. For instance, we do a big supermarket chain called in the Netherlands called, Jumbo and they have almost a thousand outlets. We operate there in a Retail Media network with them but there's always a keen balance between commercial messages and...
It's a slippery slope. You don't want to feel like you're on a highway.
Loek Wermenbol: Definitely, if it's too much, it won't work. That's one way of a Retail Media network. Related to products you can buy right in the store you are in or entering. The other one is we also have a big Retail Media network in Basic-Fit, and Basic-Fit is a large fitness chain in Europe with roughly 1400 outlets in Germany, France, and Spain, and they have a lot of screens inside too.
Because of that, they have a special proposition, they're on the low end of the market and they want to be able to operate clubs with one person to keep that cost low, and to get a low entry fee.
Hence the name!
Loek Wermenbol: But the funny part is that if you enter the club, all the products are really good, and it's a really good training facility, but if you want to do so, you have to do a lot different, and it's a lot of digitization within those store from training that you can do in a digital way and activate yourselves through all kind of other stuff, but also communicating with your clients, giving them maybe messages to motivate them or any health advice, but also just to inform you that maybe the shower is broken in the ladies room, for instance.
But those screens are roughly around seven to eight in each club and of course, are really interesting for Retail Media too, because the target group that is coming into a sports club is pretty defined. If you know the proposition is on the low end of the markets, then you have real good statistics on demographics, which people are coming in. So that's a perfect match, and a lot of advertisers, of course, are really interested in that target group and now have difficulty in reaching them, especially in the younger generation. So that's also Retail Media.
So is that real money to Basic-Fit or is it a rounding error?
Loek Wermenbol: Oh, it's definitely real money. I can't talk about figures, but it's real money, and basically, they're operating in two ways in operating Retail Media networks.
The first part is direct sales. There's a team within the Basic-Fit commercial team from Retail Media that is in direct contact with big clients to sell time on the screens. But there will always be leftover inventory, and what we did, I think it's one and a half years ago, we connected software that is able to connect on the backend to the big marketplaces the media companies use to buy their ads.
Like the Vistas and so on?
Loek Wermenbol: Yeah, and they can directly tap into the system and buy leftover inventory.
And you could put the parameters in so that it's not going to show a competitor on the screen with you?
Loek Wermenbol: Exactly. You can tailor it however you like. But it's a really good way of not getting rid of your inventory but basically sell out your inventory.
Of course, it's another price when you buy it in that way. It's going to be cheaper than direct sales. But in direct sales, you have the best spots and the best time slots, and maybe you want to only advertise in a certain area or maybe in a certain country, etc. So that's really interesting in Retail Media and it's going to evolve. We are going to see more spots within environments that show Retail Media, and you were mentioning, Dave it's strange when you see an ad for a wireless carrier or whatever in a retail store, and I think so too the market is really looking now, where are the edges of what we can and can't do, in approaching and maximizing our revenues from Retail Media, and on the other hand, not breaking down our brand. Because those go hand in hand.
You spoke a little bit about the return on the investment of display and all the technology in a store. How is that being measured? Because I've seen companies who do audience measurement and retail measurement and so on, talking about conversion ratios and so on, and I'm always a little skeptical about how accurate they can be.
Loek Wermenbol: This is a really good point because this is not the same for every solution. It really depends.
Of course, we love to measure everything because that gives us insight, gives us data, and will help us improve. But mostly, If you do an installation with a combination of techniques that actually can set up a kind of a funnel, for instance, where you can measure that there are so many people in front of my solution and making use of that solution, and of those people, so many people do step two, maybe go and pick a piece of clothing out of a wall of jeans. And we can measure that because we have counters in the ceiling, we also can measure how many of those people go into the fitting room and actually try on something, and if we know they're going into the fitting room, we can also measure if they come out and if they go to the cash desk, and if we do it like that, then we actually can create a funnel, and see what is happening, and not only see that happening but also tweak and improve. I mentioned the Rituals solution before, and I'm trying to visualize this in a verbal way. It's a beautiful piece of furniture with all the perfumes on it, and rather than having to spray the perfume off a piece of paper and smell it. In front of all those perfumes, there are little glass cones, and you can pick those up, and beneath is a little piece that we impregnated with the fragrance. So if you pick it up, you can smell it. And the important thing to know is if you pick it up, we measure your pickup, so we know how many pickups there are of that piece.
So you've got some sort of sensor embedded in there?
Loek Wermenbol: Yeah, it's actually a light sensor that covers, and if you open it up, the content that is displayed when you pick up that specific color of glass, say I'm picking up perfume A, when I pick it up, on the display it will show the content of perfume A. But it's layered content, so the longer I have this piece in my hands, the other types of content will be displaced, like an information funnel, but it also gives you the information that a certain person is more interested in this piece than somebody that puts it immediately down because maybe they didn't like the fragrance and all that information gives us all that data, gives us information about that specific setup in that specific location because, of course, fragrances can differ in different areas, cities, countries, etc.
And it actually helps the divisional merchandisers to create a setup with the different perfumes on that piece of furniture that is matched perfectly with the audience they are serving at that point. Because we can use the pickup data, the content data, but also the data that is being generated by the cash desk, and if you combine those, then you have real information that will help. It's going to be more difficult if you want to measure the success of a window display because there are a lot of factors in place. Why somebody will come in or not, or why it's busy in a high street or not, temperature or events…
Yeah, you’d need some sort of a cookie on that person, otherwise, how do you track them?
Loek Wermenbol: Yeah, and then, of course, you have the tracking of people in general, and GDPR is a thing, so we have to take that into account in some cases.
Actually, we want to do really good management and measurements, and sometimes we can, but GDPR will limit us, and it's not only the effective GDPR, but it's also the perception of the user itself. It could be allowed by GDPR, but it is not received in a nice way by the customer because he feels monitored and on camera somewhere. So perception is really important to take into account, and if you use it, be open about it, and tell your customer about it.
Is it your software management platform, like in-house, or are you using a third party?
Loek Wermenbol: We actually do both. We have our software platform, and we keep on developing that, especially for certain clients with certain wishes. We tend to push the limits in the market, and often we look for things in software that just aren't available in the market. But on the other hand, there are really good products in the market too. So we connect with certain platforms to make use of that.
I was curious because at a conference like this and everywhere I go and everything I get in by email, there are so many software companies who state that retail is their key vertical, and what you've been describing, it strikes me as it would be very difficult for a very brand sensitive and brand forward store, retailer to just go with a software company because they really need and has benefit from all that front end advice and the simple poking at them to say, “okay, why do you wanna do this?”
Loek Wermenbol: The software is relevant for the client only if he is going to operate it by themselves.
Basically, which probably doesn't happen that much anymore.
Loek Wermenbol: No, of course, there's a little bit more to it. And that is because the interface and the user-friendliness of that product will be relevant. But if you look at the other way around, in the end, what's most important for the reader is whether will this be a successful integration in total, am I going to improve my customer journey, can I add more experience that is going to generate more sales for me? And it really doesn't matter what kind of software does the job. It really doesn't matter what kind of hardware does the job. That's almost a commodity. It needs to be good, and for the AV integrator, you need to have those four-letter words together. It's so important to keep those channels, have a good service proposition, and make sure those screens are always on 99.9% of the time, they sre energy saving, all that kind of stuff.
But also in managing the content on the screen. It's important, but it's not the thing that matters most for the client and this industry tends to look more on the technology side and try to say to the clients that we have all of this. Yes, it's important, but if you're starting off with the wrong journey and the wrong question in the beginning, it really doesn't matter that you have really good stuff.
If you’re selling on features and specs, you're dead.
Last question, with retail, generally speaking, they want a business partner or service provider who's going to take them right from ideation all the way through managed services and run the network for them?
Loek Wermenbol: Yes and no. I say no because they don't always know that these kinds of offerings are available in the market, and if you don't know that, then you're not looking for it, and it's getting a little bit better. But we try to really focus on that holistic approach and offering, so that we can basically help our clients on every level. We have specialists on every level. We have 125 different types of roles within our company, if you think about it with roughly 200 people in the company, that’s huge.
We have specialists for every occasion. So if it's about IT, we have specialists that can talk with the IT of the client. If it's about strategy, we have strategists that can do that. If it's about marketing or content strategy, we have those specialists. They don't need to use every offering in our total portfolio. But we offer it, and at least in the end, if they don't use it in our offering, we can talk with them on a high level about the specific topic then and help them anyway in that topic. I think that is really important as our business, especially retail, is transforming more in helping brands to communicate in the right way with the digital retail floor, and that's why I said it, and it sounds a little bit strange, it's more like an agency which is part of communication and knowing how to do that, and advising clients how to do that is super important.
But we can only do that, and that's important, maybe last words, if we have everything really good lined up in the backend. We have super good people to make those integrations, super good technicians, and we can tell a beautiful story, but in the end, if we can deliver what we promise to our clients in our first talks, we're out of business. So that has to be perfect.
Tuesday Jun 06, 2023
Chris Grosso, Intersection
Tuesday Jun 06, 2023
Tuesday Jun 06, 2023
The 16:9 PODCAST IS SPONSORED BY SCREENFEED – DIGITAL SIGNAGE CONTENT
The out of home media company Intersection is probably best known as the operator of that network of smart cities display totems - called LinkNYC - on the sidewalks of Manhattan and New York City's boroughs. But the company has a much bigger footprint around the United States - mainly mass transport systems, but also the flashy Hudson Yards mixed-use development in New York, and United Airlines.
I had a good chat with Chris Grosso, who took over as CEO a couple of years ago, but had already been with the company for a few years, having come over from the broadcast and digital world.
We got into several things - like the state of the DOOH industry and the evolving needs and demands of the municipal governments who become business partners for Intersection. Smart cities needs, for example, are shifting.
We also get into Intersection's recently announced addition of AI-driven ad and content targeting, with the idea of making what's on screens not just relevant to the city, but all the way down to neighbourhoods and streets.
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TRANSCRIPT
Chris, thank you for joining me. Can you give me a rundown on what Intersection Is all about?
Chris Grosso: Sure, and thanks so much for having me. Very excited to be here, Dave and I very much enjoy reading your publication and the newsletter, and the email all the time. I’m Chris Grosso, the CEO of Intersection. We are a leading out-of-home advertising company in the USA focused on major US cities. We really are differentiated from the other out-of-home companies in three ways. One is typically we put in consumer amenities in center cities, most notably things like the LinkNYC program in New York, so Wifi kiosks across the city of New York. We do customer information and advertising systems for places like Chicago Transit Authority and SEPTA Transit Authority in Philadelphia.
And we do bus shelters in many US cities as well. So very much driven by bringing consumer amenities and partnerships with cities and transit authorities. The second biggest differentiator for us, which is most relevant to this conversation, is our focus on content and programming. We like to put useful content on our digital screens, and we wanna put entertaining content on our digital screens, and that could be anything from what time your train is coming to what the weather might be to art or fun facts. We want to program these screens just as you program any other screen in order to make them entertaining and engaging for consumers.
And the last piece of our business we pride ourselves on is selling data-driven advertising. We like to be very focused on the data that helps our advertisers understand who they're reaching when they advertise with us, as well as what happens after the release.
So the idea of consumer amenity that I gather that the smart city-ish kiosk that you're putting on the street and other things like that, that’s a more modern version of the amenities, to use your term, that outdoor companies have been doing for a whole bunch of time with bus shelters, right?
Chris Grosso: For sure, and we're also in the bus shelter business as well. We do some stuff with Bikeshare, and I think it's a long tradition in out-of-home advertising to bring the amenity to allow us to get access to the public right of way to put the advertising in, and this is very valuable for a city transit authority because they're getting something that they don't have to put up the cash for. So it's a real value-creating event both for the communities as well as the advertisers.
Is it the price of entry now for particularly larger urban geographies like New York and so on, where if you want to play, you're going to have to provide infrastructure as well? Can't you just put in display totems?
Chris Grosso: I think it really depends on the municipality and the deal structure. In some cases, companies have to put up the capital and bring the amenity and bring the service into the community, and that can both be the infrastructure, but increasingly also the software and the services that you can bring. But there are also some cases where, you know, particularly with the Infrastructure Financing Act, that the city or municipality might want to put up the capital for the infrastructure themselves, in which case we'll partner with them to create the revenue stream as well as overlay the data and the software to really get the most out of the infrastructure.
In all cases, I think that it's important is being able to have these digital screens up, having software to put the right content in the right app at the right time a big is an important part of the equation and a big differentiator for us.
Does that happen much where you have municipalities that are making a capital investment?
Chris Grosso: It depends on the deal, but yes, and there's a couple of different ways you do that sometimes the municipality puts up some of the capital themselves. In other cases, in many of these deals, we recoup the capital through the revenues. So we might if we put up the money and then recoup it out of the payments to the city.
So there are many different ways you can do a deal.
Chris Grosso: There are many different ways you can do a deal. There are a handful of companies, of which we are really good at this and have built a strong team that knows how to work with cities, work with transport authorities, and create value, both for us and also for the cities.
I think one big differentiator for Intersection is we are a mission-driven company, and we are very focused on making cities better through our products.
You came out of Broadcast & Online, which is very much a digital entity, and now you're running a company that has to do a lot of infrastructure and has to do these sorts of capital-intensive deals. Was that a big adjustment?
Chris Grosso: It's a different business. There are a lot of similarities between being in the digital media space and the Intersection space. But certainly, in the last few years, I've learned a lot more than I ever thought I would about trenching and conduit and coin fiber and a lot of construction.
I like to say I was in consulting, and then I was in media and software. So this is the first job I actually had, physical things to deal with, and it's an interesting and exciting part of the job, and it's a real differentiator for us at Intersection. Because we have people who are very good at digital media, but we also have people who are very good at working with cities. And we've got an extraordinary team of folks who really understand how to deploy and operate these things in physical space, and that goes for even the guys who are out, cleaning and posting. We've got a really great team of professionals and field operations who really understand work in physical space, and part of what makes our business both fun also gives us a leg up is we're good at these different disciplines.
You also, I assume, had to learn a lot about politics and about city bylaws.
Chris Grosso: We've got people who very much understand that world for sure.
Which is a bit of a labyrinth.
Chris Grosso: One could say that.
You have to deal with them, so you're being careful. I can understand that.
Chris Grosso: I think the level of talent in these city governments is really impressive and we benefited at Intersection when we started, we were put together by a historic business Titan, which was an out-of-home advertising company, and then Control Group, which was a digital innovation company, we put together to create Intersection in 2016, right before I started.
But we had the benefit of Dan Doctoroff being our chairman, who helped put the deal together and was an alumnus of the Bloomberg administration. We've benefited from some folks who come out of that world, who really understand that and did a great job in government and then can help us understand how to do stuff with the government in a way that creates value for the population and citizens, and people who live in the cities for sure, but also, creates economic value for our business.
When the whole Smart Cities thing bubbled up with LinkNYC and other initiatives like that, there was a lot of noise around it. This seemed to be the way that digital at home was going, that anything that was going into big municipalities was going to have to be a smart city initiative in some way. Has that really played out?
Because I don't hear as much and/or read as much noise about all that now, and I know that we can maybe get into this a little bit of the LinkNYC has had its revenue struggles through the years. I don't know where we're at with that now, but it doesn't seem like smart cities have the same kind of energy around them that maybe they did in the mid-2010s.
Chris Grosso: I think the definition of what a smart city is has evolved, and I think the parts of the smart city that are important people might not have thought of as smart cities but are huge trends in the changing nature of cities. You really saw that during the pandemic.
So what I mean by that is if you look at the evolution of mobility in a city, which wasn't the classic under the rubric of Smart Cities. Still, you think about how people get around cities now versus how they did 10 years ago with Bikeshare with Rideshare, with changes to how the transit authorities function, all of that is a much smarter way to run a city than several years ago and requires data and requires real-time information. So I think a lot of the ethos around the smart cities just got absorbed in how cities are operating, and particularly a lot of that got accelerated during the pandemic.
One of the biggest areas of smart cities is what do you do with parking? And that's outside of our world, but if you think about the pandemic that happened. It really made people reimagine what you do with street-level parking in cities because all cities, particularly New York and others in the United States, suddenly put restaurants on the restaurants due to the need for giving these restaurants the ability to run their business without indoor dining, and that reimagined the whole way people do parking. Is that a classic smart city type of initiative? I don't know, but it totally reimagined how the street works, and I think if you walked down the street on the Upper West Side today versus what you saw in 2019, it's a completely different experience with the bike share and the outdoor dining and other things of that nature.
So, are there still demands among municipalities to have these smart city kiosks/totems that are multipurpose devices that they're advertising totems? Obviously, there's an interactive thing, maybe there's WiFi built-in and sensors and so on.
Is that still being deployed and asked for?
Chris Grosso: I think the form factors are changing, and I think the needs are changing in the cities, and I think that there are a lot of fundamentals that cities need. So it may not be a totem, but cities need bus shelters, and now it's not just a bus shelter, it's a mobility hub.
Cities need advanced wayfinding to manage this multimodal transportation system that's coming out of the pandemic. Cities have always needed it, and I think we all underestimate going to smart cities. Still, we realize now that cities need the ability to broadcast content, localized content at street level. Whether it be what time my train is coming, emergency messaging, or just education around when the community board meeting is, that has a ton of value. So I think the original premise of Smart Cities is let's take an iPhone and put it at street level. I don't think that's turned into the right answer, but I do think there are applications and amenities in the right of way that are required that cities want and are ready to ask and get deployed.
And I do think you'll continue to see these kinds of initiatives. It just may not be in the form factor of totems. It may be a bus shelter because, you know what, you can put WiFi in a small shell in a bus shelter, and by the way, the bus shelter provides shade, and that's really important in certain municipalities, shelter from the rain, and that's important. So I think smart cities have evolved into what are the real needs of the people who live in the cities where before it was, “Hey, we've got a cool thing. Let us give you this.” and even if you look at the Link, the core propositions of Link like free WiFi and phone calling for sure are hugely used and hugely important. But what we also recognize is Link as a megaphone to broadcast real-time information to the city of New York is also hugely valuable and something that the community has been able to leverage effectively. Most recently, we played a big role in the we love New York campaign where, you know, if you put content on Link, we can reach, I think, 90%+ of New Yorkers a hundred times a month.
That’S a massive megaphone that can be valuable to advertisers, but it also can be valuable To the city. If there are schools that get shut down for a snowstorm, flip the switch and tell everyone the schools are shut down due to the snowstorm, that's a big value for a city. Is that a classic 2015 Smart Cities thing? I don't know, but it's a huge value. If you are a parent, figuring out whether your kid's going to go to school or not the next day.
So where is Link at in terms of rollout and viability?
There've been a number of stories through the years about revenue challenges and pace of rollout, and so on, but I haven't really seen anything for a year or more. So I'm curious where it's at, and as you said, it has its value, and people like it and everything else, but is it still the way forward? Would you continue to deploy this?
Chris Grosso: Yes, so during the pandemic, working with our partners ZenFi, we actually have a new form factor for a next-generation Link, which we call Link 5G, which has many of the original features of Link, like the free WiFi and the tablet to make phone calls, but it's taller, and it allows for multi-tenant small cells, to support New York City's 5G rollout. We are in the process of working through deploying those now with our partners ZenFi, who run Fiber and telecommunications.
So this would, this is a nice little partnership for you because they'd be able to share the infrastructure cost, I assume.
Chris Grosso: Exactly, and also they have the expertise in telecommunications. We are in the media content advertising space. We really understand media content and advertising software. But we're not telecom companies. ZenFi is a world-class telecom company. They understand fiber, they understand dealing with carriers and that kind of thing. So it is a good partnership. They've been great partners for us.
Your company recently announced, and you've been talking about localized content, that you're doing localization of content using AI. It strikes me as, great, this is something that absolutely should be done but it was also very reminiscent of stuff that was done, as much as 20 years ago when they would call it hyper-local.
But hyper-local was very difficult to achieve and very difficult to plan at that time, and it seemed more like an aspiration than something that was possible to do it in a way without a whole bunch of work. I assume that's changed hugely because of databases, APIs, and also AI.
Chris Grosso: Yeah, so we've always done localization, and given our screens are often deep in neighborhoods, it's a very effective way of doing stuff.
We've always done it, though, with structured databases, right? Weather: give me the weather in a zip code, right? Transit: give me what's going on at the closest train station when the trains are coming. Top 10 lists of the best songs in this neighborhood, but it's all very much tied around structured data, and rules engine and APIs, and we're very good at that.
We have a whole suite of dynamic advertising products. We've got a great product, for instance, that you're a retailer, you put the ad up for the retail and then a map at the bottom to tell you how to get to the closest retail location and that's highly localized, but it's all based on structured data—the big difference now what AI is that it allows you to do things with much more unstructured depth and much more visual creativity, which we're very excited about testing and rolling out. So, for instance, if you have an ad for an alcohol brand, how do you put that alcohol brand in context for a neighborhood? Maybe you show what's the relevant drink for this block, and the AI can figure out that this is the block that Edgar Allen Po lived on, so it'll be Edgar Allen Po’s drink. Trying to do that manually would be impossible. But you can do that using these AI engines and then on the visual side as well, which is very exciting. Maybe there's a mascot or character of a brand, and let's actually put that brand in context in the neighborhood and dressed up as someone from the neighborhood. You can do that kind of thing with these AI engines that if you were rying to do this yourself, you may not figure out the creative idea, and could never have the army of people who take to build all that creative. So that's why we're very excited about using these tools to do localization for unstructured data, and yeah, more creative types of ideas than the classic, “Hey, here's the top 10 songs being played in this neighborhood.”
It expands a lot of possibilities. But how do you do the gatekeeping on it? Because, as many people have described, AI can sometimes have these “hallucinations” and come up with a strange list that maybe isn't the top 10 songs in that neighborhood.
Chris Grosso: Yeah, for sure. One way you do it is to control the prompts and make sure you're being smart about how you're doing the prompting.
The second is: We still would envision having a layer of humans looking at all the creative before it goes on the screen to catch stuff that just doesn't make sense. Over time that problem might go away, but you still want some level of quality control, but it's very different to have creative designers take a look at a hundred pictures over the course of an hour and just check everything to make sure it looks good as opposed to trying to create all those mocks literally. It's a huge difference, and so I think, at least to start, we're going to have some level of human quality control in this for sure. But I still think the ability to use these tools to be able to do things you never could do before because you just didn't have the army pf people and it would not be cost-effective to work is really what we’re moving towards.
In the old days, my understanding of digital out-of-home was a media planner would develop the plan, and the media company would execute it based on the insertion orders for that plan. When you're getting into hyper-local AI-driven targeting and original content by the street, who's doing that plan?
Chris Grosso: I think it's often in partnership with the advertiser or the agency, right? There may be cases where the agency has a really good idea of what they want to do. There may be cases where the agency says, help us think this through, and we've always provided creative services to our clients whenever they needed it. So this is not far afield from what we do already.
When I mentioned some of these dynamic advertising, oftentimes, we build them on behalf of advertisers and our agencies as part of our partnership. So we envision it in the same way.
David:] I gather that programmatic is on the rise. The usage level is up. The last number I saw was like 15% of digital out-of-home ads are now booked out of programmatic platforms. Is there a bridge between programmatic and this AI-driven hyper-local stuff, or do they have to operate independently because it's just how it works?
Chris Grosso: I think to start, you have to build out these campaigns, and these campaigns will be more high-touch than your classic programmatic campaigns. So I think to start, these really have to be directlt sold because a lot of this is around the creative idea and creative concept, and there needs to be back and forth with clients to really get this right.
As opposed to programmatic, which is really about scale and tonnage and efficiency, and we spend a lot of time on programmatic as well, for sure. We launched a Place Exchange, which is an out-of-home ,SSP and we actually spun that business out because they did a lot of work with us, but they were doing work with all the other publishers, too, so it made sense to be an independent company.
We have very deep integrations with Place Exchange and several other SSPs. So we're very focused on programmatic and do view it as a growth driver. But I do think the creative side has to be much more, and I really think long term the way the business goes - I used to work for Tim Armstrong at AOL who used to call it the concept of the barbell - and I think you're going to see continued growth of programmatic, and then the direct sales really going to be about driving solutions for advertisers that are highly strategic and deep partnerships with advertisers. It could be something like the AI program, or it could be like other things we do, for instance, where we have advertisers sponsor train stations or whole train lines for multi-year deals where we work together to rename a station or a train line.
In New York City, the Bet MGM renamed the line that goes out to the Meadowlands, and we do this in other places as well. So I do think you're going to see the direct sale be much more solution-driven and working very tightly with the advertisers and the agencies to build these really cool things, whether it be AI or long-term sponsorships or big programs and then on, on the flip side, you'll see the programmatic businesses continue to scale as well.
Has the characteristics of venues and the type of venue partners evolved over the years, like the old Titan was about transit and street furniture, but you have other companies that are very active in airports and other mass transport hubs.
Is that evolving for you as well, or are you very much about kind of street-level advertising?
Chris Grosso: We're about cities and the the key thing is street level advertising in cities is really really important for us, and a big area of focus transit remains a big area of focus as well.
And then we've done a little bit in airports and airlines. We've also done work with some of the next-generation multi-use developments like Hudson Yards, where we put in the wayfinding directory system and the advertising system, and that's a great business for us. But our criteria for whether or not we want to partner with someone really comes down to being able to do something value creating in big cities, top 25 cities in the US. That's what we're good at. That's how we're differentiated and sure, the types of partners that we work with will continue to evolve just as the audiences are evolving.
If you think about the transit business, the transit business includes street furniture. It includes signage outside train stations, it includes buses, and it includes the train stations themselves. I think during the pandemic, what we found is the vast majority of our revenue, and where all the growth was is on the outside of the train station, the outside of the bus stations, everything that's at street level. And that offset the fact that the train stations themselves have fewer people, but there are still tons of people outside the train stations, and that's where we put a lot of our emphasis on the ad side.
Has the business recovered from the Covid era?
Chris Grosso: Yes. It looks different given our revenue mix, but we're largely back to pre Covid revenue levels. The bus exterior business and the street furniture business are well above. The train station part of the business is still somewhat below because the ridership is just not there. Then we're continuing to look at new types of inventory, whether it be multiuse destinations, as I said, like Hudson Yards, airlines and new forms of street furniture. For instance, we've got a great ad campaign on the bike share in some cities.
Do you have to look at municipal opportunities differently now? Because of the way Covid changed things and the urban downtown areas not being as heavily populated with office workers as they were in the past. It's different in New York or something, but let's say in Cincinnati or Minneapolis, or something where not as many people are coming into the urban area.
Chris Grosso: Yeah, we do the exact same methodology when we assess the deals that we look at, which always starts with where the audience is, and we've got folks who are really good at looking at GIS and traffic patterns and people patterns to understand the scale of the audience on all the different assets we might either deploy or take over the ad sales for.
That mechanism, we do exactly the same mechanism that we did in 2018-2019, we do today. What comes out of those models is a little bit different, for sure. But what's great about a lot of our business is we typically cover the entire city, not just the central business district.
And a good example of this would be in New York, the LinkNYC. If you look at the impressions, both ad impressions generated by the LinkNYC network before and after the pandemic on a network level, they're pretty close. However, the Links in Midtown Manhattan, where people are going to work three days a week are lower, however the Links on, say, the Upper West Side or in Brooklyn are actually higher because of things like outdoor dining and people working from home.
So the people are all there. They just moved around different places, and so the methodology we use, which is understanding where the audience is, works fine, we look at everything the same way. But what comes out of those models is different based on how cities evolve.
I talk a lot to people in Europe, and they have asked me where are things at in terms of what they call Green Signage and are there North American digital signage and digital out-of-home network operators that are concerned and doing something about energy costs. Is it something that comes up with you, or is it something you're trying to address?
Chris Grosso: We are definitely looking at sustainability to the extent it's part of our assessment for screens on how much power they use, and then we are also looking at how to make these networks more sustainable. Ways you do that. So, for instance, one is, we do static bus shelters, but they still need a backlight, and we will use solar panels on those shelters, which has the benefit of both being greener friendly, but also just cheaper because you don't have to pull power to the shelters. Regarding digital signs like LinkNYC, we've looked for opportunities to source electricity from green sources and that's been something we've done successfully.
But then also we look at our footprint on how we take care of our infrastructure. So we've started to test, for instance, electric vehicles in one of our markets. All the trucks that we use are electric right now. Running that as a pilot it's gone very well. The guys love the EV trucks to the point where we had a couple of EVs and a couple of gas guys just fighting over who got to use the EVs. So instead of being a half-EV, half-gas pilot, we put everything on EVs in that market because everyone's fighting over to drive the EVs.
Are you being banged on at all by municipal authorities or by public interest groups saying, you need to do something to reduce energy waste. These displays on the sidewalk are not mission-critical.
Just like Europe, where they were saying you need to turn these off for certain periods of time, they don't need to be running 24/7 anymore. Is that something you have to worry about, or are you hearing about?
Chris Grosso: I think municipalities want you to be sustainable, but I think we would argue our signs are mission-critical and should be up 24/7. But no, no one's asked us to do anything otherwise, but if you think about the importance of real-time information, if you're looking at when my bus is coming, or the weather and the sign's not on, that's a problem.
We like to think, and we would insist all of our signs are actually pretty mission-critical. Now that being said, there are things you can do around how much power you use and dim the signs at night, and that kind of thing to reduce the energy load and optimize that, and everyone consents to do that. And then again, to the extent we can source power from green sources, we do that as well.
Last question. What can we expect to see out of Intersection in the next year? You made that announcement recently about generative AI. What's next?
Chris Grosso: So I think we're very focused on product innovation around serving, meeting our customers on the needs that they want.
So I think you will continue to see more innovation around ad formats. You're also going to start to continue to see more innovation around measurement and attribution and our ability to help people, help advertisers understand who's seeing their ads and what they do after their ads and that's a huge focus for us and a big area of investment. I think you’ll hear a lot about it, and then, we're always looking at new partnerships and new deployments, and we've got some stuff cooking right now that we're hoping to be able to talk about towards the back half of the year as part of our continued expansion.
All right. Chris, thank you very much for spending some time with me.
Chris Grosso: Thank you, David. I appreciate it.
Wednesday May 31, 2023
Jeff Hastings, BrightSign
Wednesday May 31, 2023
Wednesday May 31, 2023
The 16:9 PODCAST IS SPONSORED BY SCREENFEED – DIGITAL SIGNAGE CONTENT
If you are going to the big InfoComm pro AV trade show, coming up very soon in Orlando, you'll undoubtedly see a very busy BrightSign stand, and a crowd around CEO Jeff Hastings.
I've spoken with Hastings a couple of times now for this podcast, but it had been a while ... and I wanted to catch up and get his perspective on the state of the industry, as well as find out what's new with his company and its little purple boxes.
The Silicon Valley company is pretty much its own category in terms of media players - as I hear and read about solutions providers weighing decisions on whether to use PCs, smart displays, set-top boxes ... or Brightsign boxes. The company now ships about 1,200 units a day - based on its reputation for having a range of durable, reliable devices that hit different price points and meet needs from simple to sophisticated and powerful.
In this chat, we get into the state of the digital signage market (It's growing across segments, but not at 2022's pace), how the characteristics of end-user buyers has changed, and the role of AI in BrightSign's business, and more broadly, for the industry.
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TRANSCRIPT
Mr. Hastings, good to chat once again. We've done a couple of podcasts, but you're a big shooter in this industry. I need to talk to you regularly.
Jeff Hastings: I don't know if you can call me a big shooter, but I'm definitely hooked on the world and live it seven days a week, but it's good to check in with you, Dave.
I'm just sucking up. I'm not sure why, but I am.
So where is the industry these days? I'm just curious because when I talk to people, they will uniformly say everything is awesome. While you can say that too, you're different in that you're supplying stuff to all kinds of different companies, so maybe you get a better sense of what's really happening out there.
Jeff Hastings: Yeah, I think one of the things that we do that's a little bit different is that BrightSign is really a horizontal platform, as I call it, so we work in pretty much every vertical market that has a display that's used. So we see from the broad market what's going on.
Last year was a great year of growth for us with over 20% growth. This year has honestly started off to be a little bit slow, and I think most people are reporting that. It's definitely been a little bit slow at the start of the year. I think a lot of things are going on with the interest rates and people being a little bit cautious about the recession, but overall, the industry is still growing. It's not growing as fast as I think most people predicted after last year. But it's a very solid market. We see more and more what people call digital transformations, I'm not a super fan of that word, but essentially it means people are putting in more digital signage and retail continues to be a great segment. People investing in retail to create better experiences after the whole pandemic of people wanting to get back out and people see the investment in that kind of real-world experience paying off.
Yeah, I guess you could call it phygital. Another term that I would be happy if I never saw again.
Why do you think retail's growing? Is it just simply that they understand the whole experiential thing and that you have to do more in a store?
Jeff Hastings: I think a few points. First, the whole idea that we're going to buy everything online and just stay in our house, I think most people realize, yeah, there's a lot of things that work that way, and I can just have it delivered. But the reality is we are social animals. We want to interact with people, and just being stuck in our house is not what we like to do, and I think most people are now seeing that with the results of the pandemic that, being stuck in your house is we’re not built for that. It's almost akin to being in jail. A lot of people comment on that.
So getting out is important for us as humans and having that social experiment and getting out and shopping and actually being in retail, part of it is actually physically buying the goods, but a lot of it is social. People just wanna be out in the environment. So now that you take that as a fact that people wanna be out in the environment, if you create a place where it's exciting to be in, and there are other people that are there, guess what? More people's gonna come to your establishment. So we really believe that's the fundamental basis of why people are investing in retail. That's the main reason.
If you look at a secondary reason. A lot of the big retailers, their businesses boomed. During the pandemic, a lot of people talked about how online boomed, but actually, a lot of the bigger retailers boomed and they got a lot of new customers. I think you look at folks like Walmart, lots of people come into the stores, but during the pandemic, they had a dramatic increase of people coming into their stores. As we start going back to the normal world, folks like Walmart wanna make sure that they keep those people coming to their stores. Back during the pandemic, maybe they were the only stores that were able to be open so they got new customers, and now what they wanna do is create an environment where they keep those new customers. So I think there's a lot of that going on of stepping up their game. Before it was just about price. “Okay, we'll just go there cuz it's got the best price.” Now people are like, “Hey, I wanna go there and I wanna enjoy my experience.” So that is playing into this investment in digital science and kind of digital experiences in retail.
Are you getting a sense from all the companies that work with you, that they're starting to open up new verticals? I've wondered when healthcare was finally gonna start happening.
Jeff Hastings: Oh all the verticals are growing. I don't know of any verticals that are not growing right now. They're all growing and some of them are growing faster. I think ironically, which I wouldn't have predicted, the corporate sector is actually growing very rapidly right now. I think people are coming back to the office, maybe not a hundred percent, but they are investing in it the same way that retail is investing in the experience. People are realizing that an office is no longer a place where they have to come work, much like in retail, where you have to go there to buy a product, but you want to get people in that environment for the social aspect of it and the collaboration aspect and if you create a nicer environment, more people come to work. So there's a lot of investment in that going on also.
And how does that manifest itself, like what are they doing? Big-ass video walls in the lobby or is it more kind of the operational side of it?
Jeff Hastings: It's literally all aspects of it. One, they create an impressive environment. So lots of LEDs, and lots of video walls going into these places to create a more exciting environment versus just a bunch of cubes. Secondly, more communications which are just kind of standard displays, ways of communicating with employees and more, I don't like the word infotainment, but infotainment, where they've got interesting things, are displayed to communicate with employees, but it's also a bit fun. These are things of just celebrating employees. We see a lot of that going on and kind of recognize the employees' communication about what's going on in the company.
This whole idea of an intranet I think most people realize that, guess what, when they have an intranet, no one actually goes to that website. So that was a great experiment. I think a lot of money on intranet sites which ended up being a massive failure, so the ability to communicate with employees is very important, and what they're finding is, guess what, if there's a display up there, and it's interesting, people will look at it and now you're getting across a message, and that could be whether it's a benefits program or you name it, you're able to communicate with employees and engage with them in a way, especially with the younger crowd, that the younger crowd doesn't want something kinda forced on them. They want to be able to kinda opt into it and the displays actually allow them to kind of opt-in in this passive fashion.
Has the buyer profile changed at all? We were chatting at some trade show or other, and you were saying how your guys are spending a lot more time talking to IT people than perhaps they did in the past.
Jeff Hastings: It's very much changed. I would say when I look back 10 years ago, maybe 10% of the deals that we did involved the IT group. I would say today, any large deal, the IT group is involved with, and this has to do with understanding how they're gonna maintain them because it's now moved from whoever was wanting to “buy” the digital signage, whether it's the marketing group or the HR group, that they're quickly realizing that the IT group is gonna own these things in terms of making sure that they're working every day, not putting the content on them.
So the IT group is now very much involved in that because they know they're gonna own them, so understanding what the cost of maintaining them is gonna be. And then secondly, security is just an enormous thing today. I mean pretty much every large deployment we do we go through large amounts of security reviews. The great thing for us is that it is kind of the backbone of our product is security, and we've built our own proprietary OS. We have put in the ability that the security is super high. Our devices are used on navy ships on the most secure network in the world. So it's a thing that actually benefits us, but just the interaction with the IT involvement, any large deployment goes through literally months of security review and if you can't pass that, it doesn't matter what the other organization from a content perspective wants to have, it'll never make it.
When you're dealing with IT and IS people, when you say it's our own proprietary operating system, does that present a problem or are you able to say it's derivative of Linux or whatever, and it's fine?
Jeff Hastings: Yeah, so at first, a decade ago, we would say that, and it would just make the hair stand up on their back rise up. But now what they've realized is there are a lot of these devices really classified as IoT devices, and they now understand how they fit into the environment, and it's not oh my God, we can't maintain it unless it's a Windows device. It's interesting that they now are able to classify these devices as kind of IoT devices with proprietary operating systems and understand how to run them. It's also that the larger corporations have now figured out how to understand the cost of a classic kind of PC. Not that's what everyone uses them, but they now really understand that and most of the companies are now, they use a number of around $300 as the cost to just have a PC in the work environment. They now understand what a cost basis really is for maintaining these and for us, they're giving much lower numbers in terms of being able to have one of these on the network.
And a lot of it has to do with the ability of these devices, if you're using Windows or Mac, these things are constantly updated, and each time those operating systems get updated, there's a percent of things that fail, and those are support costs. With our device, we don't do that, so it actually saves them a lot of money operationally at the same time, keeping the security level high.
So what happens when you do have a firmware update?
Jeff Hastings: So on our system, the first thing you can do is you can test those, and most of our customers do actually test those to make sure that they're not going to get a failure with their system. That's very different from something that gets shoved down the pipe automatically to maintain your security level. So by doing that, it's a very controlled rollout, and typically it's a very rare exception on our platform that something has to go out because a security fix came out immediately. A lot of it is just because of how our operating system is first cryptographically signed, and secondly, that people can't put random applications on our platform.
Those two things raised a security bar really high so that when you need an operating system update, a firmware update, you can be controlled about it, you can test it and roll it out, and that really is where a lot of the savings comes in, because most of these operating system updates, it's not that the actual operating system is causing problems, it's the whole ecosystem of applications that people use.
And one of those applications breaks, and guess what, they get hundreds of calls coming in to fix it. Each one of those has to be fixed and dealt with, and that's where kind of the burden of cost really comes up, and if you think about digital signage, 99% of those new features in the operating system are never, ever used in digital signage. In fact, most of them are actually being defeated. People don't want them. You don't want a desktop in digital signage.
Yeah. Is digital signage with the people you're dealing with now or your business partners are dealing with now, are they seeing it as a mission-critical application now?
Jeff Hastings: It's definitely moving towards that. I wouldn't say it's completely there. Some of them are mission-critical. We have folks in the F1 world that use our devices and I will tell you, they view our devices as mission-critical. The Navy uses our devices. They view them as very mission-critical.
Some of the marketing folks, maybe they don't view them as mission critical. They view them as very valuable, and anytime there's downtime, it's important to them. I'd say it's moved from a place where people would be like, oh, displays always go down, and they don't worry about it either.
Hey, those things should be working all the time, and that plays to our advantage.
Ten years ago when the first system-on-chip displays came out from Sony and Samsung and then LG and on, they weren't very powerful, they didn't do a hell of a lot. They could do the basics. They could show a menu, that sort of thing, but they've been around for a decade now. They're pretty powerful. I hear people saying they're pretty darn good.
Do these smart commercial displays now present a challenge that perhaps they did in the past? And are you looking at embedded solutions? I know you already do that with Bluefin, and you did a little bit with NEC Sharp back in the day.
Jeff Hastings: Yeah. So, the way I look at these is the range of devices that can create this experience. You can look at a $35 raspberry pie that's going to do a bunch of powerful things. So the whole content side of it, I really focus less on that. We have a whole range of players from simple to very complex with the new XC product, and it's interesting to look at the content, but what we see more and more from our customers is the ability to maintain these and control these because the long term cost is really what comes into play.
So it's becoming less and less about. “Oh, can this play this piece of content?” Because that's being more and more commoditized over time, and what we're seeing is, as we talked about, like the IT organization, the ability to maintain these, the sustainability. There's a lot in sustainability, what's the power consumption, what's the lifetime of a display? And one of the things that we actually see, which is a vulnerability in the built-in displays, is that their storage is fixed. It's soldered down on the motherboard, flash memory is a consumable, and it has a limited lifespan. So that's one of the things we're seeing with our players, you can replace that media with a display that has it soldered down. Once that memory wears out, which it does, then you have to throw away the whole display.
So that means that all of a sudden you're taking, instead of a tiny little SD card that weighs a few grams, now you're going to throw away a whole display that's going to go to a landfill. So we push a lot on sustainability. Clearly, in North America, it's a little bit behind Europe, but in Europe, that is a big deal of sustainability.
The bottom line is that the built-in definitely has some advantages. The operational ability to deploy it is simpler, but it's not the panacea. There are still lots of things out there. The manageability of it, the ability to update and control things remotely, and the ability to change the SD card when it wears out are very important. And I love to make jokes about that. If I bought a car that I couldn't change the tires when they wore out, I'd be really bummed to have to throw away my car because I can't replace the tires, and that's the same thing with flash memory. It's the same thing as a tire. It's going to wear out. You'd hate to throw away your car.
So with the Bluefin, I know they have a range of displays now, and they're not just little shelf-edge ones. They go up to, I think, 40-inch plus or something. In those cases, when you've got an embedded display that's got a BrightSign inside, is it swappable or upgradeable?
Jeff Hastings: Yes. So there are a few things about those displays.
So the first is that it uses the same architecture. So we'll use an SD card as the storage mechanism so that you can do that. Secondly, it's actually slotted. You can open up that display and can actually replace the player.
So it's like the Sharp NEC ones going back Five years or something?
Jeff Hastings: Exactly, and so we standardized on a different kind of connector to really make the form factor very small. So both the media is replaceable, and the player is replaceable. We've even had some customers already do that, upgrading their platform from an earlier one to their next-gen, and they're all backward compatible, so they'll fit into the same slot, and you get the newer performance.
So yeah, we see that, as a market there's a class of customers that want to see more and more people, and at every show, if you stop by, we have more and more people who are doing the BrightSign built-in, and you'll see that trend continue. You'll see it continue as more and more people realize that's a really good solution. The platform, the ecosystem, the upgradeability, and the remote management are really important, and they want to add that to their displays.
And it's a little thing, but the simple fact that if you can put up a display in an hour instead of 90 minutes or something if you're doing a big rollout, it adds up.
Jeff Hastings: It does add up, and like I said there's the upfront and then the ongoing. So yeah, there are absolutely benefits to it, but you have to make sure that you don't end up with a car that you can't change the tires on.
What about Apple TVs? There are three or four companies, at least CMS software companies, who heavily market Apple TV as their solution.
Is that not a concern, but do you see it as real competition or almost like a novelty?
Jeff Hastings: I see it mostly as a novelty. It's on the border of a consumer kind of operating system. It's a little bit different. But still, you're dealing with many of the same things.
You're fighting the platform. Apple TV, Roku, and Amazon Fire, they're essentially all very similar. They're built for consumers. They're not built for commercial use, and what that means is that you're kind of fighting the platform. I routinely see people using the Roku TCL TVs, and they have their little digital signage application, and then when it reboots, it comes back to the home screen, and people are trying to beat that.
So if you look at large-scale deployments, that's where you get into this manageability and controllability, and those things are not optimized for that. It's not like I'm saying it, they're worthless. It's just in large deployments, it's difficult to deal with the little idiosyncratic consumer devices.
It's interesting when you talk about Roku because I don't think that many people know that BrightSign is, in effect, a spin-out of Roku, right?
Jeff Hastings: Yeah, the BrightSign business was originally part of Roku, and in 2009, we spun out for them, and actually the core operating system is still very similar between the platforms, although we've taken it in the digital signage direction and added a lot of features and capabilities in digital signage and obviously the Roku guys have taken in their direction of streaming. But yeah, at the core of it, yeah, that's where the technology came from.
Is there still any kind of sharing of ideas or anything between the companies, or are they very much different tracks and you share DNA but that's about it?
Jeff Hastings: It's really that we share DNA and that's about it. I'm still on the board of Roku, so I actively participate in their business, but yeah, there's no official sharing. But yeah, with me being on the board, we get kind of informal sharing.
Yeah, I mean, you're sitting there actively listening and they say, we're developing this, and you're thinking, “Yeah, that's interesting. Maybe I could apply that.”
Jeff Hastings: Yeah, and the same thing goes in the other direction. Some of the stuff that we work on is pretty interesting, as we do a lot of out-of-home advertising. Their model is built on a big advertising model in-home. So there are definitely things we share that also.
You have high-end players that can go up to 8k. Are there customers using 8k or are they just buying those boxes with the idea of, okay, we're future-proofed?
Jeff Hastings: Yeah, the way I think about those players: 8k is a feature. It's not the only thing that you can buy those for.
Most of the people are not using 8k, and honestly, it's just a marketing thing because very few people actually use 8k. Most people buy them for the power of the experience. So very high-end experiences that people would've classically used PCs, for now, can get our device with the reliability of our operating system and maintainability, yet the power of a PC. So that's kind of what we see most people buy 8k for. The applications that we're seeing right now are kind in two sectors. One is people with consumer manufacturers of consumer TVs that wanna create an 8k experience that has all this interactive and all the great features they use. They're using our products and that, and then LEDs. So LEDs are probably the biggest area where we've seen the 8k as a single output. Those are very interesting cases because as the density of LEDs has come out and, folks like Nova Star now have 8k sending units, we can now plug in ak and instead of having multiple boxes of content rolling in, they can just have one big 8k pallet that they can split out to anywhere they want on the screen. That's a big market.
Then the last segment that we see AK being used in is having content that spans over video walls. So if you think about a four-screen, 4k LED wall, right? 8k is perfect for that, and with the hiring unit, it's got four HDMI outputs. So you can just plug four TVs and adjust the bezel compensation, and now you've dramatically simplified having a video wall. So those are the areas we see people using our XC product which does 8k.
I can't open an email list or go to any kind of technology site without seeing a couple of stories or a couple of pitches about AI.
How do you see AI fitting within what you guys do?
Jeff Hastings: o first, AI is super interesting, and especially with ChatGPT coming out, I think there are a lot of areas that you're going to see AI, at least in our world. So I see it as one, on the internal side, so helping our developers become more efficient. When you're writing software, there's a lot of what I would call mundane writing software that is done, whereas now, that can be automated. Actually, there's GitHub CoPilot that generates a lot of software inside Visual Studio for doing simple things.
Then using ChatGPT to do some of the basic frameworks that work really well. So those are tools that I can see, and maybe on the support side, being able to use AI to get a much better quality first-level support request. So I see those things as on the operational side of the business.
And then, when I look at the digital signage side, what are things that are going to be changing the world on the outside of digital signage? I think the biggest one that I see is content generation. I don't know if you've played with any of the tools on content generation. Let's be real. Many people need just kind of simple videos and imagery, and with these new content tools, you can tell it what you want. I was playing with one the other day and said, “Hey, I want an image with a hamburger in a retro look”, and it generates an image for me. If you think about what that would've cost to have a graphic designer, do that., I think the package I've paid for, it's 10 bucks a month. That one image would've probably cost a few hundred dollars for a graphic artist to do. So I think the content side is coming up there, and then the last part, which we're working on a little bit, it's still early, is for our integrators to be able to describe the experience they want and create a presentation out of it.
So that is one that I think is, it's the same way that you think about, giving our programmers and our software engineers a big head start, I think this is going to be the next step. So an integrator, instead of having to say, how do I use which tool to create this? They basically put this into an AI and say, here's what I want it to do, and it gives me the experience back. And at the simplest level, it's already working, which is, for doing some simple presentations, not that it's an enormous amount of work, it's just the learning curve. We've got it working where you can just tell it for a simple presentation, it'll put it together for you. So I think, and we're just at the early stages of AI, so I think it's going to have, over time, a profound impact on basically making digital signage easier and lower cost to do a lot of things.
Yeah, I've been saying to people that, yeah, the generative AI stuff is cool, and the ability to generate images from prompts, as you were describing, is really interesting. But I think where this is really going to get used is behind the scenes for things like you were saying with coding, generating marketing materials, doing smarter monitoring, all that stuff that an end-user customer may never see, but is going to, as you say, make doing this business easier.
Jeff Hastings: When you just look at it, all of these things lower the barrier to entry to having a deployment, which is just good for our industry, and I think the AI tools are just at the early stage of creating these experiences and content that just lowers the cost of doing it. So all of them are exciting for us.
So you're going to be at Infocom, which by the time this runs will be imminent. It already is, but what are you going to be showing? I know you've got new players, new Series 5 players.
Jeff Hastings: Yeah, we'll have the whole lineup of Series 5 players. They've been dribbling out since the end of the year. So yeah, we'll show the new XT5 for the first time in our booth, which will complete our whole Series 5 lineup. So all of them will be on display.
We'll have more of the, as we talked about, BrightSign built-in displays in different form factors. Some interesting ones will be there. If anyone's out there, stop by our booth, the new XT product will be out there, and it will be exciting, and more of these built-in displays will be there. That kind of plays in that segment of the market.
What's your booth number?
Jeff Hastings: I don't know our booth number.
I knew you wouldn't, but I had to ask.
Jeff Hastings: Those things are not on the top of my list. We're in the digital signage section, and you'll see the power of purple being out there.
Just look for the crowd?
Jeff Hastings: Exactly.
All right. Thanks, Jeff.
Jeff Hastings: Dave, thanks so much, and good chatting with you.
Wednesday May 24, 2023
Steve Bernard, Ocean Outdoor
Wednesday May 24, 2023
Wednesday May 24, 2023
The 16:9 PODCAST IS SPONSORED BY SCREENFEED – DIGITAL SIGNAGE CONTENT
A lot of digital out of home media is marketed mainly on the basis of reach - essentially the scale of the aggregated network and the audience reach that's realized. It's more about math than science.
But the UK out of home media company Ocean Outdoor is very much interested in the science of advertising, and over the last decade, Ocean has commissioned a series of studies that measure brain activity and how people respond to the visuals of advertising and other mediums like social media.
While a lot of audience measurement is about counting people and characterizing behaviours, Ocean has commissioned five studies that take participants into a lab, put something like an electrode cap on their heads, and measure how they respond to campaign visuals.
The newest study, called Digital Out Of Home: The Vital Ingredient, looks at how digital out of home optimizes the use of social media. The research found that using socially amplified digital out of home, changes how brands are perceived, and the value of their role in the media landscape.
I got a rundown on the background and the findings of this research from Steve Bernard, the Head of Insight for Ocean.
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TRANSCRIPT
Steve, thank you for joining me. For those people who don't live in the UK and maybe aren't in the media business, can you explain what Ocean Outdoor does, its footprint, and that sort of thing?
Steve Bernard: Of course. So Ocean started its life about 15 years ago, and we exist in the UK out-of-home media industry. So what that means is that we are selling premium digital screens to a range of advertisers across the UK. As I said, the business started back in 2008 with just a handful of sites, but in the period between then and now, we've grown our portfolio sites significantly. We now have well over 600 locations in total, and that's largely digital out-of-home screens. So some of those are static digital screens that show static imagery on them. Some of them are moving images so we have the ability to display moving images to the public, and whilst many of those screens exist on what we call roadside locations, so typically to the side of roadways and also on pedestrian pavements, that kind of thing, sidewalks, we also have several screens within internal environments so shopping malls are one of our big sort of environments that we exist in and what marks Ocean out as different from its competitors is that it's very much focusing on selling to advertisers that premium network of digital out-of-home screens.
And indeed, the environments in which those Oceams screens are located, for example, those shopping malls I referred to a moment ago, are often the most premium environments that exist in the UK. So, for example, we have a contract with Westfield, which is one of the largest shopping mall brands globally, and they have a significant footprint in London. So we have the advertising space on the external side of Westfield's locations: two locations in London, one in Stratford and one in White City, and we also have screens in the Edwards and James Mall, which is a premium shopping mall in Edinburgh in St. James's quarter, and we also have a footprint at Canary Wharf Mall. So Canary Wharf, for those who don't know, is quite a key business environment within London which typically has financial businesses. So by having our advertising screens in a location like that, we know we're reaching a very high-end premium audience.
And very quickly we have just started putting screens in Battersea power station which is again, another new premium shopping environment in the heart of London. So what works us out differently is our premium in inventory, and it's very much about digital out-of-home screens.
We're talking primarily because your company has put out neuroscience research, and I'm guessing at least that one of the re reasons you're investing in that level of research is because you do have premium properties, and you're selling your advertising at a premium so there's probably a higher demand for proof of impact and proof of audience on all those things. Is that accurate?
Steve Bernard: Yes, very much so. We always need to identify different methods to measure the effectiveness of premium digital out-of-home. One of the things about the out-of-home universe, if I may call it that, is that it's fairly varied in terms of the formats, in terms of the size, in terms of whether they're digitized or whether they're static posters.
There's a variation in environments as well, and so we know that not all out-of-home sites are the same in terms of the kind of impact that they deliver, and because we specialize in the premium end of the out-of-home universe, yeah, we need a methodology, which not just marks us out as different from our competitors who use more conventional, if I can call it that, research methods, but also something that is going to truly measure the impact of that premium out-of-home space.
So with neuroscience research, what are you doing? I realize that you're not doing it and that you're commissioning a third-party company, Neuro-Insight to do that work, but what's involved?
Steve Bernard: So ultimately, what we're trying to elicit is how people are thinking and feeling about a stimulus that's presented in front of them and to move that into the out-of-home context, what we're fundamentally trying to show is that by running premium digital out-of-home prior to other media channels for any given brand or any given campaign, that primary effect, that first impact is going to have a profound outcome in terms of how the audience discerns those other media channels. And we call that the priming effect, and during the course of the neuroscience studies that Ocean has run over the last decade or so, it's always been about trying to elicit that priming effect of premium digital out-of-home on other oot-of-home formats, for example, which was the neuroscience one or on other media channels completely like television or mobile campaigns.
That's ultimately what we're trying to show is that by leading with premium digital foam, a brand is able to ensure that how people take away the message on the other channels that they've run is fundamentally different compared to if they weren't running that premium digital out-of-home beforehand.
So what happens? You're not taking people who are participating in the research out on the street or anything like that. This is in a lab or something, and you're putting a brain or a skull cap on of some kind?
Steve Bernard: Correct. These studies are largely done in laboratory settings and controlled settings. And yes, as you've described there, the participants are made to wear these kinds of headsets, which are able to measure the various cognitive functions that are coming to the fore, as I say, when that participant is exposed to a particular stimulus or stimuli, be that digital out-of-home advertising or a brand in digital out-of-home advertising or seeing a brand in another context entirely so a TV advert or other out-of-home campaigns or indeed social media campaigns, which will I'm sure I'll come on to in a moment.
So what did you learn? Did it validate assumptions, or has the research surprised you guys?
Steve Bernard: I think we've always had this view that the effect of premium digital out-of-home and not just, can I say pre premium digital out-of-home, but also iconic out-of-home. One of the sites we also have in the UK is Piccadilly Lights. So that's at London's Piccadilly Circus. It's like a mini version of. Times Square in New York, if you can imagine Times Square in New York, Piccadilly Circus is a sort of a version of that, and we've always had this sort of expectation and this view that those kinds of sites are clearly eliciting different emotional outcomes for brands advertising on those platforms versus other more conventional formats.
As I said earlier, it's a very varied sort of universe. But clearly, the way in which someone consumes a message displayed on Piccadilly Lights, for example, or any of these other premium digital out-of-home sites that I'm referring to is gonna be different from how they consume that message on a bus shelter poster, for example, or a more conventional roadside billboard. So we've always, as I said, had that expectation of difference.
So the research is validating. But I think in respect of the lace neuroscience study that we've just launched in the UK and in some of our other European territories, which Ocean is based, we're able to show actually quite an interesting relationship between digital out-of-home and social media and a relationship, which I think for advertisers has yet to be fully realized, and hopefully, with this study, we are drawing attention to the closer relationship that these two platforms have. Digital out-of-home on one hand, and social media on the other, and as a result, getting advertisers and their agencies to think more about how they plan these two media channels together.
Can you give me an example of how they, how the two mediums intertwine, and how digital out-of-home primes social media channels or social media interests?
Steve Bernard: Absolutely. So to set the context a bit on this, typically within the advertising industry, you can put different media channels. So traditional media channels like television or radio, newspapers, magazines, and out-of-home and newer media channels such as mobile advertising or social media, you can have those on a sort of access, and you can look at that access based on how strong those channels are delivering what's called performance. So highly measurable, highly targeted on one side, and the sort of more intangible effects, so branding effects, brand equity awareness, fame, consideration on the other end of that spectrum.
So you have performance on one side and branding on the other, and you would typically see social media at one end of that spectrum on the performance side, and digital out-of-home and out-of-home are widely on the branding side of that spectrum because the view has always been that they do very different jobs. One is highly measurable or highly targeted, and the other is about reaching huge numbers of people in a public space. So one to many versus one to one.
What we have noticed over the last two years, it's probably been going on for longer, but over the last couple of years, is more and more examples of famous people, if I could put it that way, celebrities, influencers on social media, et cetera, promoting out-of-home content on their social media channels. So you'll typically see examples of famous actors or pop stars or musicians generally Tweeting or Instagramming a picture of themselves on an out-of-home canvas. That could be a banner site, or it could be a digital out-of-home screen. but very much promoting themselves on that platform, and we would contend that they wouldn't necessarily do the same thing if they saw themselves on a magazine page, or even in a television advert because a television advert is overtly a marketing function. Whereas the interesting thing, the unique thing about the digital out-of-home and home more widely is that its public furniture, I guess you could say, it's a public message in a very public space, and so I think that's why there's this relationship between known public figures and communications in the public space and that's the out-of-home space.
So that was happening over the last couple of years, we really wanted to explore that more deeply. On the other end of that is that more and more advertisers themselves are promoting their content, their out-of-home content, I should say their brand from a digital screen, on their social channels and we've seen examples from Amazon and Meta and a range of other advertisers who are who are increasingly looking at these kind of really exciting executions that they can deliver on the digital out-of-home space, and rather than sharing on their social feed, on their Twitter or Instagram a conventional advertising message, they will utilize that out-of-home content within the social media space. So you'll get Amazon Prime Video, when they're advertising a certain program, they will have performed an execution on an iconic site or a premium digital out-of-home site, and then they will tweet or Instagram the out-of-home campaign on their social channel, and that's really interesting because that represents a significant step change for our industry.
It's not necessarily just about reaching all of these people who walk past our sites on the ground every week, every month, et cetera. But the opportunity for that advertising to be seen much more widely by people who have not encountered the advertising on the ground, and that leads to all kinds of interesting questions about what is the true reach of an out-of-home campaign and like I say, that's very unique to our industry, given its greater level of creativity that's at our disposal now, given the greater proliferation of high impact digital out-of-home sites, and given the proliferation of a greater level of technology, which enables us to bring these campaigns to life in new and exciting ways.
There's a lot going on there, and so wrapping all of that together, because of this idea, this concept of sharing the out-of-phone campaign on the social media channel, fundamentally, there is a strong relationship between the two. Again, this is something that we've wanted to explore for some time, and we felt that neuroscience, given that it elicits precisely how people think and feel about something that they're exposed to, versus another sort of research technique, like a survey or a focus group, we felt that neuroscience is the perfect way in which to measure the impact of this type of concept that I'm describing.
There's also this interesting phenomenon that's bubbled up in the past couple of years where you have brands commissioning motion graphic designers to create a digital out-of-home ad, usually some sort of anamorphic illusion of some kind on a building where there isn't actually a billboard, but they design it in such a way that it makes you think that there is a billboard there and those seem to get one hell of a lot of social media shares, even though they're not actually physically booking a digital out-of-home campaign.
Steve Bernard: Yeah, that's absolutely true, and again, it's this idea that as an industry in the out-of-home space, we have a unique opportunity to capture the imagination of the audiences that encounter the various creative executions that we deliver.
And it's no surprise when you look at how welcomed and trusted different media channels are, out-of-home quite often appears at the top of those kinds of lists when they're ranking different media channels, which as TV and radio and online, et cetera. Out-of-home does really well in terms of being more welcomed and more trusted versus other media channels.
And I think that's because we have, as I say, just a really strong opportunity to capture the imagination of people as they're going about their daily business in an unobtrusive way. It's also the idea that out-of-home generally is one of the most venerable media channels in existence. There were people putting up painted billboards and painted communication on buildings a long long time ago, and that venerability is everlasting. People will always want to see things in the public space, and seeing them in the public space gives an inherent notion of trust. In a way, we would argue that isn't necessarily the case with one-to-one communications and certainly not online communication, desktop ads, et cetera. We know that brands who are appearing in the public space are trusted because they're in the public space because it is seen as a public medium.
So yeah, we have a lot of opportunities to capture the imagination in welcome unobtrusive ways, and as I say, there's now an opportunity to take all of the benefits of using out-of-home in the physical space, moving those benefits into the online space.
Were the rationale and the budgetary argument for doing this kind of research different a decade ago than it would be now?
I assume that a decade ago, digital out-of-home media companies had to work a lot harder to sell the medium itself, there was still a degree of skepticism, and a lot of it was just being sold on gross audience impressions and not a hell of a lot else, versus today where there is all this level of sophistication.
Steve Bernard: I think that's an evolving story. Fundamentally, the medium is still traded very heavily on reach, how many people any given campaign reaches, the frequency of encounters, and ultimately the number of impacts or impressions that a campaign is delivered, and that's chiefly how it's valued really.
I think one of the great things about this study and any series of studies that Ocean has done with neuro insight over the last decade is that with each of these studies, we are communicating to the wider industry the value of neuroscience., which has a very unique value. Now the company we work with on these, Neuro-Insight, they're a global neuroscience business. Still, they started their life in Australia, and it's very interesting that in Australia because this is not the case in the UK, in Australia, they incorporate what they call a neuro impact factor into their audience currency. So how they value outflow medium in Australia factors in these types of techniques, so it's not just a case of looking at reach and frequency and impact over there, there is implicitly this role of neuroscience coming to the fore, and the data that you see for different out-of-home formats and environments over there, and this is something that here in the UK, we're yet to do with our own out-of-home audience currency, which is called root.
But the long-term ambition would be for this type of methodology, this kind of study to at some point be incorporated into the out currency because, as I say, the out-of-home currency is very robust in that there, there's an awful lot of heft that goes into its methodology and an awful lot of inputs, data inputs there. A variety of sources. As I said earlier, there is clearly a different role played by sites such as the Piccadilly Lights or premium digital formats generally versus more conventional out-of-home formats, which are traded really on reach. There's a fundamental difference in these different parts of the industry.
An advertiser would be able to buy a thousand bus shelter posters, for example, or 2000 billboards on the side of the roads, up and down in the UK, and the value of that is in the reach, in reaching literally millions of people in any given period of time. Where this kind of study differs and focuses on is the unique sort of relationship that a relatively small number but high-impact sites have with an audience, and these kind of sites, these unique sites enjoy strong reach. Still, really their difference with more conventional standard out-of-home performance is that there are relatively few of them. Therefore the impact, if I can use quotations of how it's making an audience think and feel is very unique compared to more conventional out-of-home formats, which are traded purely on reach.
They're not differentiated from each other at all. So a bus shelter is a bus shelter. The same in London as it is in Manchester or Birmingham or et cetera. This is very much about showing the value of these more unique sites, more premium unique sites.
Do you have to invest the time with media planners and with brands to explain this methodology and. what's coming out of it, or do they inherently understand it?
Steve Bernard: No. It's very much the former. We spend a lot of time explaining how we put these studies together. They're complex studies. There are lots of different elements within neuroscience here in the UK. It's growing. It's a developing research study. One we've pioneered at Ocean Outdoor within the out-of-home context, but we do have to spend a lot of time explaining the methodology, there is always a great deal of interest when we go out to present these agencies or out-of-home buying specialists, et cetera, or when we go to clients directly here in the UK because it's quite a unique method because it doesn't have, at this point, a more widespread adoption, I guess you'd say.
So that means its uniqueness means there is an awful lot of interest to hear what we have to say. But it is always an interesting experience, kind of communicating the different elements of the methodology of neuroscience. I mean with the social media study, the vital ingredient, as we've called it, is us looking at the priming role of digital out-of-home on social media channels. There are an awful lot of moving parts to this. All that always relies on that always requires a lot of expectation. Fundamentally what we're measuring, the outputs are cognitive functions, as I've mentioned earlier. These cognitive functions are a mixture of engagement and approach towards a brand, memory, emotion, attention, et cetera and it's these kinds of outputs that we show uplifts for when we're presenting results. But again, it requires constant explanation because these are not elements you could describe them as, which are talked about a lot in research. A lot of the time, when we're communicating, out-of-home research, it's very much in looking at the effect of a campaign on brand awareness, or brand consideration, that kind of thing, and those kinds of terms are much more widely understood on the part of the advertising industry. But these kinds of outputs, like I say, cognitive functions, attention approach, engagement, et cetera, require a lot more explanation.
Is it a differentiator? In other words, would you have a circumstance where a media company, not Ocean, but a competitor Decaux or whoever is seeing planners, and would they actually say, okay, where's your neuro research, or what does your neuro research say? And they would say, well, we don't have any.
Steve Bernard: So neuroscience study within the out-of-home context in the UK is still relatively rare. It's something, of course, as I've said, that Ocean has pioneered because it's particularly about measuring sites, which fundamentally it's harder for the out-of-home currency to measure. So the value of neuroscience to us at Ocean is that we need unique methods to measure the effectiveness of what we would call unique properties.
Our competitors would be less likely to involve themselves in this type of study purely because our competitors here in the UK have a much wider portfolio in terms of volume, right? So in some cases, thousands and thousands, tens of thousands of different out-of-home formats because they're selling scale, reach.
Fundamentally, they're selling size, and they're selling the idea that reaching so many people in any given period of time has an inherent value, which, of course, it does. But as I say, neuroscience is a complex methodology. Still, one which is particularly useful when measuring unique properties and Ocean Outdoor of any outdoor media owner here in the UK has the unique properties, high impact, and famous premium locations, which makes this the perfect sort of methodology to use to measure their effectiveness.
You've done five of these studies over the pace of 10 years, is there a cadence to it? Are you doing one every two years, or are you done now?
Steve Bernard: That was a really interesting question. Each of the neuroscience studies has focused on the priming effects of digital out-of-home on another type of advertising format, from Neuroscience One, which looked at the priming role of premium digital out-of-home on wider outer home campaigns, and Neuroscience Two looked at the television, and we've over the years looked at things like mobile and the effects of priming digital at home on mobile.
I think it's hard to say, but there's been one every, as you say, every two or three years when the time is right. We felt that with this study which began its life last year, we felt that because social media channels were playing much a much more significant role within the advertising industry generally, and not just in the UK obviously but globally, we felt that there was a particular value in looking at the relationship between our own medium and these platforms. Where do we take this next? That's a really interesting question.
This study has already garnered a lot of interest here in the UK amongst agencies and clients. It's also something we have communicated to our other Ocean Outdoor locations. We have offices in Sweden and the Netherlands and across Scandinavia, and there's a lot of interest there. My colleagues and I have been presenting this study at events in Europe. So because of the level of interest that this is generating again, not just here but internationally, I think there will be a lot of ideas that come from this, focusing on areas that we want to explore further. Things that we weren't able to pick up necessarily in the study that we launched last year, but looking at more specific elements within them. So it's hard to say exactly where we'll take this next, but I think there will be a lot of ideas being discussed with us as we take this more widely
For people who have been listening to this and thinking this sounds interesting, I'd love to see the data or see the findings or whatever. Is that accessible, or is that something that you only share with your customers?
Steve Bernard: So it's something that we will always share with our customers first.
It allows us to have quite in-depth discussions with them about their media planning generally. So that's the first aim. We always ensure that the findings are displayed on the Ocean Outdoor website. So if you go on the Ocean Outdoor website now, you will see the findings from the previous four studies and they're readily accessible, and this study, of course, in due course, will be communicated on the website. It's something that we're sharing a lot on our social media channels, as you might imagine on LinkedIn, Twitter, et cetera.
We're always happy to talk to people face to face or on an online forum about the study in more detail. In terms of the data itself, we've found some really interesting things in this study, as I said, these are two platforms, digital out-of-home, and social media, which, in the perception of advertising planners, exist on different sides of the advertising spectrum. But we've proved with this study that there is a significant priming effect of digital from digital at home on what advertisers are already doing on social media. For example, we've seen significant effects on dwell time. So that's the time people spend with an advertiser's brand post. That increased by 32% when the campaigns were primed by digital out-of-home.
Where we've seen a really really interesting finding is what happens when the digital out-of-home content itself becomes a social media post. So rather than an advertiser doing a conventional brand post, they can display the out-of-home campaign on their social channels. We saw, again, a 54% increase in dwell time. So again, that's time spent with that social communication cause of the primary effects of that socially amplified content we've seen increases in emotional intensity, and we've seen increases in a specific cognitive function called approach, which is ultimately or essentially people becoming more positive towards a brand when they see the campaign begin on digital out-of-home, then on social media.
So what we're really saying is that digital out-of-home is making campaigns online more approachable, making the brands more approachable. They're pressing the emotional buttons, which emotion is key in turning attention into long-term memory. We're enabling more time to be spent on social media communication. That's a key role of the priming effect and, most fundamentally, at this point. Finally, it is the fact that if you see the campaign, so let's say you've got an advertiser who uses out-of-home and puts that on their social channel, there is a tangible benefit from doing that for that brand versus if that brand was to just do a conventional brand post on Instagram or TikTok without the participant having seen the campaign in the physical location.
A lot of what I've described here is about the priming effect. But if you take away that priming effect if you just look at an audience who hasn't encountered the digital focus screen and you just compare how they felt about seeing it, seeing that phone campaign, on their social feed in sit versus if they just saw that brand, that same brand doing a standup brand post. There is a tangible benefit for that brand in terms of approach, a 21% increase in approach and a 3% increase in memory. That's really exciting because that suggests a much wider audience out there for campaigns that go viral, and that's the raw power we have as a medium, we can make social content more appealing to that audience.
We can do that for a brand. We're not just giving a brand the great benefits of the physical location, but we are also making a social media campaign for that brand more positive. I'm a part of the audience. It's really exciting, and lots of different layers to this study. So like I say, the results will be fully available for people on our website, but we would also welcome the opportunity to discuss it further at any given time.
All right. Thank you very much for spending all this time with me. That was terrific.
Steve Bernard: Thank you very much.
Wednesday May 17, 2023
Mark Coxon, AVI-SPL’s Experience Technology Group
Wednesday May 17, 2023
Wednesday May 17, 2023
The 16:9 PODCAST IS SPONSORED BY SCREENFEED – DIGITAL SIGNAGE CONTENT
AVI-SPL is one of the largest pro AV integrators on the planet, but for the longest time, if I was asked if I knew anyone at that company specifically on the digital signage file, I'd say "Nope."
As far as I knew, and the same for a lot of people involved in digital signage, AVI-SPL was much more focused on traditional pro AV work like unified communications and control rooms. While AVI-SPL delivered some digital signage projects, it wasn't a real focus. But that started to change a few years ago when the Tampa-based company spun up a new business unit called the Experience Technology Group, or XTG. Now it has some 30 people working on projects driven by the impact of visuals, and directly involving other architects, designers and creative shops.
Now, that's 30 people in a company that has 3,700 other staff, but the group works with some 300 customer-facing sales people, and gets pulled in to opportunities and projects when clients start expressing interests or needs that are about more than just function, like whiteboards and conferencing systems.
I had a great, very thoughtful talk with Mark Coxon, an industry veteran who joined the company about a year ago and is one of XTG's business development directors. We get into both the science and emotional sides of experiential projects, and how these kinds of projects work when they're guided by ideas and desired outcomes, and not just the Wow Factor of big screens.
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TRANSCRIPT
Mark, what is your role at AVI-SPL?
Mark Coxon: I am a business development director in our XTG division, which is our Experience Technology Group, so what I do is work with our regional account managers as well as our partner ecosystem to identify opportunities to build amazing experiences.
So your regional people would come across an opportunity, let's say, it's a corporate workplace that says, “We want to put a big ass LED display in our lobby. We don't know what to do or what to put on or anything else. What do we do?” And your regional person might have a kind of deer-in-the-headlights sort of reaction and call you or somebody on your team and say, okay, I need help here.
Mark Coxon: Yeah. So a lot of our opportunities do arise within the regions themselves, right? Because AVI-SPL is a huge corporation. We have, I think, 300+ sellers out in the marketplace, across the world, talking to clients, managing accounts where they might do a lot more of the typical AV that you see out in the space: conference rooms and auditoriums, et cetera, and they'll come across customers saying, “Oh, I think we want to add a wow factor to this lobby” or “We're thinking about building an experience center to show off some of the new innovation that we came out with this year.” And so they'll engage our group, which is an overlay to the whole company, and bring us in, and we can really start to give, I guess, some form to that process and make sure they get what they want at the end of it.
So you have a BizDev role, but it sounds like there's a fair amount of sales, engineering, and front-end consulting involved in it.
Mark Coxon: Yeah, it’s funny. AVI-SPL isn't really known in the market for experiential work, but we've done a lot of it. We've done a lot of it in pockets over the years for these customers, but it was never really organized under a division, and so that's why XTG exists. We've organized this portfolio of work in this division and assigned it to a team of people. We have about 30 people on our team now that overlay the country, and that team consists of people like me, business development directors, and we come from different backgrounds, some come from fabrication, some come from the consulting world, some like me come from all over the place within the industry from an integration perspective, and then we also have technologists on the team whose job is really exactly what you said to be those people who are thinking about the art of the possible.
“All right, this customer's asked for this outcome. They have these people coming to their building. They want them to feel this. They want this actionable insight out of the space.” And they're the ones who actually come up with the ideas on what kind of technology could we use to execute this and if we were to pull this off, what would it take for us to do that? And then they start to come up with rough sketches of what the technology would be to execute on that outcome.
Yeah, it's interesting. Through the years, I've been asked who do you know over at AVI-SPL and I'll say nobody from the context of digital signage, and the company's been known as a very large company, and it’s very active. But doing more, if this is the right term, traditional AV work in the corporate workplace, that sort of thing, and as you said, pockets of activity in digital signage, but nothing organized.
So was it recognized within the company that we need to aggregate this and put ourselves forward as being directly in this as opposed to people discovering that, oh, you do that too?
Mark Coxon: Correct. XTG's definitely a targeted branding effort at consolidating this work and this expertise we have in things like executive briefing centers, museums, welcome centers, visitors centers, hall of fame experiences, et cetera, that we've done over the years for enterprise, higher-ed, and really creating some emphasis around that type of work that we do, for sure.
Is there some cross-pollination happening when you do that? What I mean is, if you do some sort of immersive, experiential environment for a corporate workplace. Do they then two years later say, oh, by the way, we need new video conferencing capabilities or new meeting room signs, that sort of thing. Do you do that?
Also, vice versa where you're already in there doing collaboration work, and they say, we want to do something in our lobby with Wow Factory. Can you do that?
Mark Coxon: Yeah, obviously, we see both of those happen. Places where we're brought in maybe to do some specialty work, and of course, the other work at that point seems like more low-hanging fruit because it's work that we excel at already and have a huge portfolio of as far as auditoriums, meeting spaces, et cetera, and then, yeah, like you said, vice versa. We're coming in, and we're doing a lot of work, and you walk through this amazing lobby where people are going to come in their first experience before they come there to meet.
So let's say somebody's bringing a customer into their building, and they're going to pitch a multimillion dollar sale with this customer that they have. How are they defining what that experience is gonna be within the building and just asking that question sometimes, who's doing this space? This looks like a customer-facing, marketing-driven space, and a lot of times they don't know that we do that work, and yeah, we stumble upon it that way as well.
Do you guys go into prospective customers or existing customers pitching the idea of experiential spaces, or are you really operating off of their interest and initiative when they're saying we're interested in this?
I suspect it would be hard to pitch somebody saying, “You should have a big-ass LED video wall in your lobby.”
Mark Coxon: Yeah. I call that technology in search of an application, and that's definitely not what we do. There's a great quote by Cedric Price, who was a mid-century architect, that says, “Technology is the answer, but what's the question?” And that's really what my job is within the team, and the business development team's job is (we have a few business development managers), but our job is really what are you trying to accomplish in this space? What business outcomes are you trying to achieve when you're looking at building this space?
We're in this weird mode, right? Where a lot of companies are re-evaluating what it means to have an office in general, what it means to have physical space, whether that be retail, we just saw Bed, Bath & Beyond looking at closing up and citing online competition as one of the reasons, so what does it mean to have place-based retail today? And if we are going to build a space, what should it be? And really starting at that level. So I try to start with that level with people all the time, even in the enterprise.
The question isn't what do we do with the lease that we have or this space that we have? That's part, but that's the bridge. The real question is, if I had nothing, what would I build? And that's really the end goal of what you should be moving towards, and so many times we really start breaking down the problem of: what are the impacts that you hope to make by having a physical office or a physical retail location? And then how do we move backward from that into how does that now affect what we design into space, including the technology that will go into there?
It's really reversing that. If we go in and just start telling people how cool it is to have an LED wall in their lobby, we're selling from the wrong perspective. But if somebody says, you know what, when people come in here, they come in here, and they sit, and they go into their phone. So they're waiting for a meeting. They come and sit in our lobby. They start looking at their phone, and suddenly they're stuck in their email. They're thinking about the seven things they have to do when they get back to the office, and they're already moving past our meeting. We want to create something that actually creates some anticipation, some foreshadowing that tilts them into the anticipation of the meeting they're about to have and not pull them out of our space and back into their workday. How do we accomplish that?
And those types of conversations are much, much more fun to have and that could result at the end in having a 400-inch video while in the lobby, or it could result in maybe taking physical objects that the company's made if they're an aerospace company taking some of the innovations they have like rocket nozzles and things, and putting them on a shelf and letting people pick them up and play with them. And as they do, content launches, ambiently, around the room as they interface with these objects or whatever that happens to be. But really starting with who is here, why are they here? What are they interested in, and how do we engage them more? So that when they leave, they remember being here, and they actually take the actions we want them to take. So it's a much different approach than screens first, right?
Yeah. As you might expect, I get bombarded with emails and pitches and everything else every day talking about different projects and capabilities of companies, and I see the words experience and immersive overused and abused quite a bit, and I'm curious how you define immersive and how experience is defined because I get a sense that there's this idea that experiential and immersive means that, you have to have a video wall that's got gesture recognition and you're going to wave your arms in front of it, and all these things are going to happen, or they're synchronized lighting, or God knows what.
But from my point of view, there are times when an experience is just something that tells you if you're confused about which way to go, things like that, something that just makes the space better.
Mark Coxon: A hundred percent. So it's funny that you mentioned that because although I'm on an experience team, I'm a big fan of the calm movement. How are we decreasing the technology we use for mundane tasks or throughout the day to create these analog, tactile, calm moments. I agree that the best definition of experience I've heard, and one I tried to adhere to was by Brian Solis. He used to be at Salesforce, I think he's now at Service Now, but he's written a lot of books on the experience economy.
And he said, an experience is an emotional reaction to a moment in time, and as you said, that doesn't have to be an overwhelming jaw-dropping experience. It could be a relief like you said, that now I know where to go, or it could be a silent pause that allows you to reflect. I think there are a lot of ways that you can create an experience for a company.
For me, immersive just means that it's drawing the person in. It doesn't have to be all-encompassing. Are there ways to do that? Yeah. I've given, and I'm going to give a course this year at Infocom on creating the new connection center. I've given some talks before on utilizing biology to give a deeper connection to your message. So things like engaging peripheral vision work because more of your brain turns on when your fight or flight response is activated when your peripheral vision is being activated. And so are there ways that we can use, potentially waves of light to focus people inward on a screen or on a position in a room. Are there ways to draw people through space to a place where we want them to dwell? How do we create experiences where we don't, I guess, create congestion, right? Like putting a screen in the middle of a hallway, it could be a good idea as long as you're not encouraging people to stand there for 15 minutes, as long as the dwell time there is 15-20 seconds, et cetera.
So I think experience is also just how people interact with the space themselves, and immersion is a combination of all of those things. So engaging more senses always creates more memory, but that doesn't have to be an active participation either. I think the things that are often overlooked in experience are opportunities to create, if it's a movement of air, if it's gentle waves, if it's mechanical movement in a ceiling, if it's an ambient soundscape that fills the space instead of white noise, all of these things can lend to experience, but they're nothing that somebody stops and focuses on. They're things that happen in the background that enhance what's going on, without the person experiencing it really focusing on it, if that makes sense.
Yeah, I'm listening to that, and I'm wondering how the people on the other side of the table are responding to that. I suspect some of them are leaning forward and very interested, and other ones are going, that sounds expensive!
Mark Coxon: You do get that. You can definitely get that, and I think that's why the co-design process is so important and not coming in with an idea of what you want to sell. Like earlier, you talked about me coming in and telling somebody why this experience is going to be important for them. Again, that's me pushing something upstream that I've got an idea about.
I always say my best tool in a meeting is a blank piece of paper. Because if I sit down and really listen to what people do in this space, what they're trying to accomplish, all of those things, I'll pick up little notes. I had a customer the other day who, the architect, had put together a mood board of what this space wanted to feel and look like. They built a lot of these common spaces that they're talking about in architecture, We and Us spaces is what they're calling them where they're building these cafes with a lot of biophilia and wood and stone, and all of these things, and they're like we want to do sound masking in here, and you're like, okay, that's great. So obviously, you want to keep the sound from moving back and forth, but what you've really created here is almost an urban park or a community park type feel in this space so instead of just flooding this with white noise or paint noise, why not create a nature scape or something like that'll also keep the noise transfer down but really reinforce this idea that you're outside in this natural environment as opposed to the hush of a quiet office or the hush of a pink noise or white noise air chiller or something that a lot of times you put in a office space where maybe you're trying to focus on deep work and not on connection, right?
So it's just really listening to those things. When you start to identify those, when people start to, I guess self align with certain ideas as you're walking through what the different pieces are, they're more invested in that. Then when you come into that space where the cost comes, they really then weigh that against the impact as opposed to comparing it to what four speakers playing white noise would cost in the space.
Is it like that book about a village in terms of these kinds of projects where it's super important to have the architect involved, the engineers involved, all the different players who collaborate on a finished project as opposed to just the AV team coming in and executing this part of it?
Mark Coxon: A thousand percent. So many times, when we are brought in, what we end up doing and what I do with clients when they ask for an experience like this is one of the first things we want to do is almost a gap in overlaps kind of analysis with them. There is an ecosystem of partners that is necessary to create an experience. You're going to have somebody that's creating custom content. You may have two or three companies creating custom content. You may have to have a company specializing in video and live-action, live actors, et cetera, maybe somebody specializing in creating interactive user interfaces for touchscreens and all of those things. So you have these content creators. You do typically have somebody as an architect in this space that's obviously defining what the space looks like. Many times you have an experiential design firm doing the story, right? What's the strategy, what's the story? How are we walking people through this space? That's working with the marketing team in the company. Then you have custom fabricators building all this set work that the audiovisual goes into to create the look and feel that everybody has drawn down on the paper.
So it does take a village, and many times that's part of what we do, is we educate what it is that players are involved in a successful experience. Who are the stakeholders that you have involved with now? Do we need to get more stakeholders involved? Many times it might come through IT because they see it as a technology buying exercise and you really find out that marketing and the C-suite and human resources need to be involved because this is a system that's meant to reconnect the employees of the company to the mission of what they're doing every single day in space. And now all of a sudden that becomes a much higher strategy-level conversation on how it's executed, and so it does take a village and it takes a great ecosystem of partners. I know that word's overused too. I've used it twice.
But it takes this great array of partners, which is one of our core strengths is that we have a partnership manager that works specifically on making sure that we have a broad array of partners that we can introduce into these projects with our customers to make sure that none of these gaps are left untouched and that the experience we deliver at the end is not just a piece of technology installed on a wall because the technology itself, you don't get the value out of it when it's installed in the building, you extract the value out of the system. The ROI comes from the use of the system over time to drive the outcomes that you were looking for and thinking of this as a construction project where I delivered the 400-inch LED screen, so we're done, and the customer got what they paid for, they haven't actually extracted any value out of that piece of equipment yet. It's a depreciating asset until they play something on it that gets them the result that they want.
So we really try to focus on that instead of just our one part, and our, as I said earlier, we have our team. Our team, from a business development perspective, we walk through those things. Our technologists design the technology, but we also, when we take on a project, we have a program manager. And they're involved from the beginning, they listen to the intent, and just like in the programming phase of architecture, when you talk about what is the intent of the space and what are the ways that we're going to actually make some design decisions to facilitate that, the program manager really carries that spirit of the job and make sure that those partner handoffs, et cetera, are all going well and that everybody's involved in delivering the final result and so we built a process by which we deliver that, and we believe in it, so yeah, it does take a village for sure.
What is the breadth of services?
I'm thinking of one company much smaller than AVI-SPL, but they can do the full experience including metal fabrication and creative design, all that. So they can pretty much go from inception to delivery out of the same shop as opposed to using partners, but for a large company with a whole bunch of partners in play, how much do you want to own and how much do you want to cross-pollinate and work together on things?
Mark Coxon: We've doubled down on partnership when it comes to that. Our core strength is delivering technology. That's why our business was built, and that's what we do best, so we focus on the design and implementation of those technology systems, and for the other pieces, we partner. So you know, w don't build a lot of content. We do have a division called Video Link that does some content for video production for meetings, et cetera.
But are we going to create computer animations for how our power plant works? No. We're going to bring in a partner that knows how to do that every day to do that. Are we going to define for the company what their story should be based on their seven customer personas? No, we're going to work with their marketing department, and if they need some help really coming up with a storyline, we're going to bring in one of our branding and creative strategy partners to help with that because that's what their core skill set is.
So we try to focus on what our operational excellence is, and that is delivering technology systems. But from the standpoint of the way that we approach the sales group, we're not engaging in a process that's designed to sell a particular technology. So it's the difference between focusing on what we're really good at and letting the cart dry the horse. I love the Maslow quote, “When all you have is a hammer, everything looks like a nail.” We try not to approach this, well, we need to sell 600 extra square meters of LED this quarter so this customer will get a video wall. That's not the way that we approach this.
We don't approach this from a technology-centric lens, but we know where we play well and what we deliver value in the market with, and that's the technology portion.
I wrote recently about a company that was, maybe not pivoting, but evolving into doing AV as a service, with the argument being that a lot of end-user customers would rather just have the whole project done as an operating line item as opposed to all the upfront costs of capital, and they don't want to worry about recurring support and all that. They'd just rather pay a number and let somebody else do it. Is that something that comes up and that you offer?
Mark Coxon: Yeah, it comes up all the time. I think customers are always looking for ways to understand how much of this you want to own from a content update perspective, from how you manage refreshes, from even how you buy a system, as you said. Is it an operational cost, or is it a capital expenditure? Is it a construction project, or is it an ongoing cost month over month?
One place that we see this very specifically right now is we're doing some virtual production and XR opportunities for clients, especially in the corporate space where they're wanting to elevate their all-hands meetings or their product launches or any of those types of things. They're often already buying those services in an operational cost format where. They're going out and renting a studio, or they're hiring a production company to come in and do these meetings for them. So they don't want to take on a capital expenditure. They want that to continue to be an operational cost. So yeah, through things like creating a plan for leasing equipment by having a breadth of services onsite, like we have onsite managed services where we can embed an AVI-SPL employee in one of our businesses to run a center per se, or to run a virtual production studio for the customer so that they just come in, the stakeholders come in, they talk about the product they want to talk about, and somebody's running all the front house, back house doing the streaming out to the other participants, et cetera.
Yeah, we offer all of that, and that's one of the great things about working with somebody like us is because we do have such a large footprint, we do have such a presence, we have 4,000 employees across the world, and we have onsite managed services available. We have the ability to buy things on the customer's behalf and lease them, et cetera. That's one of the great advantages of someone with a big footprint like us is we have the ability to do those things.
What are the reference projects that you bring up? So you're sitting in a meeting, and they say, “What have you guys done? Impress me!”
What do you come back with?
Mark Coxon: Yeah. There are always a few that we show. The Museum of the Future in Dubai is an amazing project that we did, and people were like, you guys did that project? I'm like, yeah, we did that project and delivered it through our Dubai office, which is an amazing office. That team is, hands down, an awesome team. But we show projects like that because that's a space where people pretty much ride an elevator, like a space capsule, up into a space station and then come back to Earth in a future state, and the museum architecturally is beautiful, it's an oval with a hole in the middle of it. You even wonder how it suspends itself, as well as just all the different things that are in there. There's a touch interface where a half globe, a half spear actually swells up out of a flat table, and you can use it to articulate the earth. Who's ever seen an interface like that before?
So obviously, there were some great creative partners involved in the content and in that fabrication. But that's obviously a showcase project that we talk about a lot, and then we have visitor centers and executive briefing centers. A lot of our executive briefing centers are very impressive, Honeywell and Charlotte is a beautiful center with everything from transparent LED to kiosks to volumetric displays with physical artifacts to a full four-wall cave immersion room with a touch interface in the middle to navigate through 3D environments.
And so we show a lot of those pieces. We try to show projects that have, I guess, a variety of execution styles because not everything needs to be a touchscreen. It's to show someone that you could have 3D printed objects on a table, and as you pick up those objects, the video changes, and as you articulate that object, you can actually affect different parts of the video to launch. Those kinds of things are really cool and just show people that it doesn't just have to be a touch screen on a wall. We're not looking to put a big black rectangle on the finish you spent six months working on with the architect. We're going to make sure that's integrated into the space in the proper way.
Yeah, I'm a big fan of subtlety and just little things like present sensors that cost a few bucks to incorporate into a design. But you walk within a certain range, and it changes what's on a screen, and “Oh, how'd that happen?” It's great, but it's not fancy, you're not issuing a press release about it.
Mark Coxon: Yeah. We've been working on some projects where they're talking about using real-time location services as people walk through the building. So they get badged in, or they get a card, and that card has a profile that maybe they've entered in, and as they walk through the space, the experience is personalized slightly to them, based on their profile or using things like data generated art. Humans are great at pattern recognition, and so if you're putting audio/visual in a space that people work in every day, or people go into the office every day with these screens are in the background, you don't want them to be counting down 15 seconds to read and then 32 seconds until the screen goes blue with white text and then: 5, 4, 3, 2, 1, cue the video of the kid running through the park.
That almost becomes like water torture at some point, right? It's just the constant dripping of this repetitive content that goes on in the background. So how do we use things like occupancy sensors, and time of day weather outside, all of which create effects on these screens that are more ambient in times that they're not being actively used for customer communication or employee communication?
A lot of those things are really cool. So what you said, that subtlety, and really thinking of just the different moments. These are canvases that we can use for multiple things. Sometimes they need to be quiet and soothing for people to do their work. Other times they need to be loud and inspiring to get somebody's attention and be able to design something that does that and know who to partner with on the backend from a hardware perspective for something like a content management system that can be on a schedule or can use sensor-based inputs to trigger different modes is really important.
Are you sensing or seeing any kind of a shift in the marketplace in terms of rising interest in a particular thing?
I know you mentioned experience centers, but those have been around for a while, that's an area where I get a sense because of the pandemic and everything, they're elevating in importance because you don't have as many people in the offices.
Mark Coxon: Yeah, I think experience centers are becoming more and more prominent. Companies are seeing if they can bring their customers in and create a memorable, relevant experience around their value story, that pays dividends for them.
I think we're seeing more and more interest, as I said, in virtual and extended reality, virtual production, and extended reality stages for elevating corporate communications. Suppose every single one of your communications goes out in 16 squares on a VTC call. How do you punctuate those meetings so that the important ones are elevated and look different, feel different, and actually engage people differently? We're seeing more and more of that.
I will say, honestly, the big push is this: The challenge of physical space in a world that becomes more and more online, we have to get away from the idea of just utility because utility is going to be provided more conveniently, virtually. I can easily join a meeting from my kitchen table. I can easily buy a pair of pants on Amazon. So if we're just looking for the utility of work or the utility of shopping or whatever that place is built to do, if we're focusing on utility, we're always going to lose to the online experience because it's more convenient and the utility is the same. So we really have to focus on the personal experience.
Gensler did an experience index on public space a few years back, pre-pandemic, but people are in multiple modes when they go shopping, right? People are in the task-based mode of finding something to buy, but they're also in a mode of exploration. They're in a mode of connection. They're in a mode of aspiration. Who do I want to be? What do I want to be? I want to be inspired. They're looking for cultural connection. There are all these other motivations at play, and it's the same when people come to interact in an office, when they join their team, when they go to a movie theater versus watching something on Netflix. There's a reason the movie theaters haven't died. It feels different to watch a movie in a movie theater, not just because of the scale of the screen or the audio, but because it feels different being in a room, having a shared experience with other people, hearing their reaction to something, hearing when they go silent, when they laugh and when they cheer.
Those are things that we can really build an experience around, and I always say technology has advanced to a space where technology is usually not the limiting factor, so technology's no longer a huge challenge, space isn't a huge challenge, to design a space or to be able to build a space that facilitates these things. So really, now we are in the challenge of getting somebody back to the office, getting somebody in a mall, it is a human-centric problem. That's a human-centric exercise, and if we don't start with experience design that addresses the human motivation of why they would go somewhere, and we just address the utility of how big a store need to be and how big a screen need to be for somebody to read the text? We're never going to solve a human-based problem on why space is relevant, and so I think companies and customers are starting to see this more and more if we can start talking about: what is the human experience, and then how do we use space and technology to facilitate that? It's just a different way to solve the problem.
We have to flip the model in its head. We can't start with a square building, add technology, and then hope people come and use it in the way that we designed it. That's not experience design.
All right, Mark, thank you very much—very interesting chat.
Mark Coxon: Hey, thank you, Dave. I appreciate it.
Tuesday Apr 25, 2023
Brett Crossley, FanConnect
Tuesday Apr 25, 2023
Tuesday Apr 25, 2023
The 16:9 PODCAST IS SPONSORED BY SCREENFEED – DIGITAL SIGNAGE CONTENT
There are a lot of screens at sports and entertainment venues, and when it's possible to buy a 4K TV the size of a bus for a few hundred bucks, team owners and venue operators are having to work harder than ever to compel people to get off their sofas and come to games.
Whether it is college football or pro basketball, there's a big emphasis on maximizing the game-day experience for ticket-buyers, while also optimizing the investment sponsors have made in being at the venue and part of everything going on.
A Charlotte, North Carolina company called FanConnect is very specifically in the business of providing and supporting a platform and services that drive the game-day show, and the information on most or all of the flat screens around a stadium or arena.
FanConnect does in-venue TV programming that enhances live game broadcast feeds with things like real-time stats and sponsor messaging, and it also does IPTV for the suites and loge areas, as well as digital signage around the concourses and at concessions.
That last component is something most or all venues want and need, but the digital signage capabilities also track back to the roots of the company. I had a chat with Brett Crossley, FanConnect's VP of Product.
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TRANSCRIPT
Brett, thank you for joining me. Can you tell me what FanConnect does?
Brett Crossley: So what we do is we work with the corporate partnership teams in sports venues, so in college and professional sports and we work with the partnership marketing, the sponsorship team if you think about it that way to put something on the TV screens. I'm talking about our primary product, so our biggest product is FanConnect TV. We make other things, but that's probably the biggest thing we have. It's also our biggest footprint, and what that does is it makes a private TV network for use in the venue that plays on all of the TVs that are in the venue that would've been showing just the live game feed. This feed was being produced for probably the video board in most cases. We turn that into something that fans are gonna want to look at because it's good looking and that fully integrates what the sponsors and what the corporate partners need into that experience.
So that's the main product that we supply, and then I'd say that all the related products are similar, right? They're all designed to operate inside of a large sports venue, inside of a stadium or an arena, and they work with TVs or video technology of some kind inside of that venue.
Do you get any pushback at all from venues saying why wouldn't I just use the broadcast feed that's already coming in that I've already been using on the TVs?
Brett Crossley: No, I don't think we don't face that pushback, and the main reason is if you think about our primary customer is a corporate partnership team. On the college side, that would be somebody that's a Rights holder, like a Leader field, a Playfly, a JMI, typically that's who that is. On the professional side, it's a group that's titled something like Corporate Partnerships for the Chicago White Sox, and prior to us getting there, they either didn't have any way to include their corporate partners in the TVs or what they had just wasn't working for what they wanted to do.
And so yeah, I don't think we faced any pushback there from people saying why not just use the existing feed? I think the other part of it is too tough, in our opinion, when we are done, it looks a lot better and it provides a better fan experience than before we got there. And I know we're on a podcast so you can't see this, but if people go to our website or if they look us up on LinkedIn. we're FanConnect.TV so that's our domain name. But if they look at what we do, it's designed to mirror a lot of what you would see with a professionally produced broadcast. So imagine somebody's in a truck and they're using tools from Ross and Grass Valley, et cetera, and they're building something to make it look broadcast quality, we're doing something similar. We just do it in software and without having people do it in real-time.
I assume one of the drivers here for the corporate sponsor people is they're looking for as many ways as possible to give their corporate sponsors some love and avoid any minefields of a TV broadcast, if, let's say, I don't know, Chrysler is the sponsor at a stadium or a sponsor at the venue, they don't want a Ford ad on TV or a Toyota.
Brett Crossley: Yeah, absolutely. I think that what they're trying to do is they want to create something that works for a partner, and I will say, because we probably lead the world in this and I know that sounds like blowing our own horn here, but as far as companies that are really invested in understanding how corporate partnerships work and the needs of the teams that work with them, I think we probably do more of that than anybody.
I'm not talking about just the pure technology people doing an L bar, creating something that kinda adds to the video. But the other part of what we do is education about the best use of that technology to actually do what it's supposed to do, and so oftentimes prior to us getting there, if they did have something like, think just like an L bar, going back to Cisco Stadium Vision days. If they had something, there wasn't a lot of thought put into it, and in most cases, the experience wasn't great. It really looked like what it was, which is you just shrunk the amount of video space available to show the game and you put an ad wrap around it, and you're showing kinda nothing but a wall of ads, and if you see what our product looks like, if you saw it in the NFL, you're gonna see passing statistics and rushing statistics, and we're gonna interleave in photos from the team's official Twitter feed when those are appropriate, and just pulling in a lot of stats and engaging content and then embedding that with the sponsor assets in a way that looks really natural and not like we just put a wall of ads up there.
I've certainly heard through the years of very large technology companies like Cisco buying their way into these sorts of venues, and in order to do that, you have to use their technology. Are we past that where the venues realize, yeah, that was great, we got that for free, or very little money, but it didn't actually work for us?
Brett Crossley: Yeah, it's a good question. I'd say that is still something that is evolving. So if you look at the landscape today, certainly you've got teams that have invested in one IPTV system or another, right? So Cisco was one of the first of those. There are plenty of other technologies that do that, and that's something that we make as full IPTV as well. But if you look at the people that do it, I think that in most cases they certainly would show in their marketing something that looks like an L bar and they're all going to say words on their website like make more money from sponsors. But in terms of actually doing that, it's an exercise left to the reader, and so you see teams that have had some of those newer technologies and have had them for years, and we know because we talk to everybody that we work with and people that we don't, you'll see people that have had it for multiple years that have not gotten that to where it does something close to what we do, not even just a basic version of it.
So the content's hard. I think you probably know that as well as anybody, right? In the digital signage industry, content's also hard. But it's especially hard on the side where we play because you have a lot of things that you have to do well to make it look like what we're trying to make it look like. We want the scoreboard embedded in the same way it would be on the broadcast TV feed. We want the live clock that's coming, it's the same thing that's tied to the scoreboard controller that's in the stadium. We want to be able to show out-of-town scores. We want to highlight when something significant has happened in those out-of-town scores that lead to changes. We want to show sort of detailed stats, like in major league baseball, hit and pitch data, and so tying all of those things together and making it work well is not something that's easy, and so I would say that currently the positioning by. Most of the vendors that make something like IPTV is yeah, you can just use our stuff and go build something to your liking. In reality, we certainly work in a number of places where the vendor that is there would much rather that experience be them than be something created by us.
I'm curious about how deep you have to stitch your way into the operations of the venue and of the sports franchise, whether it's football, baseball, hockey, or whatever the case, you have to work with the scoreboard systems, like the statistical analysis systems, the people are doing things like reading how fast that fastball came in and all that sort of stuff. Is that a lot easier to do now than it was even five years ago?
Brett Crossley: I would say that parts of it are easier, but there are new technologies that come out and then essentially new APIs that you're having to deal with on the regular. It was much harder for us when we first started. So we started doing this way back in like, 2010, and I can share this now because it's just been so long, and it doesn't matter, but we really bluffed our way into it, and at the beginning, it was like, yeah we want to make something work here, can you work with our scoreboard controller? Yeah, sure. What is that? What brand?
And it was difficult, right? I think that when you think about the vendors that are in sports venues, a lot of them do not want to play well with others, right? Think about the people that made the scoreboard controller, and the people that made the stats, and I feel like there's another barrier to entry there, which is that the professional sports side, all have pretty tightly codified APIs that distribute all of their data. But if you haven't already got a team that's your customer, you won't get access to that data, and so it's not if you came up with a product idea, you can just build it, and they will come. You have to have something in the door to be invited to use the data. I think for us, it certainly got easier over time because as we saw one of every type of scoreboard controller, we would just chalk that up and write it down. We're like, oh, okay, they've got Dactronics, they have an OES, or whatever the thing was, and then we would figure out how to work with it. You can imagine some APIs represent abstraction for that so that t no matter which one of the controllers we're working with or which stats API, we can kind of create something more unified and easier to manage.
Sports entertainment venues are turning into experiential venues in many ways. Are you now having to also work with almost like show control systems?
Brett Crossley: So that's interesting. We do, in some cases, work with control systems, but interestingly enough, more of that is done during a live sports game for example, if you think about working with the production crew, they might have a Ross tool that is designed to trigger things on the video board, on the ribbon boards, et cetera and we can make it to work on the TVs that we operate on are one more thing that can be tied into those control systems and so imagine, somebody's just hit the third home run of the game, and so they want to put a special message up, they can send that message, and it'll activate all of the things at once. It's kind of a TV takeover, video board, and ribbon board. So that's where we see that.
On the sort of mixed-use venue side, I think that the requirements in general on the TVs are a little, and when I talk about the TVs, the bulk of the TVs, I'm not breaking it down to the very specific ones that are doing a job that looks much more like digital signage, right? Like concessions, menu boards, and sort of those things. But if you think about it, the bulk of the TVs that would've had the game on in that venue during a concert is probably still showing the concert feed. They might be doing a simple wrap, and the wrap is just giving some day-of-event information instead. So it's a little bit simpler just because nobody has a big vested interest in doing something special for a one-off like a concert.
You mentioned digital signage. You also have that as part of your kind of product suite, right?
Brett Crossley: Yeah, sure. We originally were a digital signage company, so if you went way back when we started doing what we did originally in college sports and then eventually in professional sports as well, FanConnect was a wholly owned subsidiary of 10 Foot Wave, which was a digital signage company and was split off in 2018 as part of the acquisition of 10 Foot Wave by Spectrio and so our roots were in that space, to begin with anyway. It's natural that as we split off and just focus on sports venues we wanted to be able to handle all of the small screens, you can think about them that way that are inside of a stadium, and so that includes the TVs that are showing the game, TVs that do the equivalent digital signage which is just informational, et cetera, as well as the concession, menu board, those types of things, and then the other kind of interesting one is like what we do at Ohio State, which is we make a tablet that's used in the lodge area. And so it's purpose-built, it does, IPTV, so it does videos so you can watch them out of town game or whatever that you're interested in. But it also has a bunch of functionality used by the kind of premium seat holders at Ohio State. So if they need to call an attendant, if they're trying to figure out the pricing of the mixed drinks or whatever, they can look that up what to do and all of that, look at rosters and team data, et cetera, on that purpose-built tablet.
So there's one at every seat?
Brett Crossley: There's one at every table, is the way that it works. So if you think about a lodge area, it’s a hybrid, right? So it's assigned seats in grouped sections as opposed to just you're in these five seats, so you've got a shared table for every three people or something like that.
So there'd be a lot of client entertainment happening?
Brett Crossley: Yeah, there's a lot of entertainment, and then those people paid a lot of money for those seats wherever they are. I mean sports venues are expensive, and so just trying to create a premium offering for those people is something that a lot of teams are working on.
Is there a lot of pressure to do more and more from one company in a sports and entertainment venue?
I talk a lot about the importance of a company being known as the guys who do this kind of work, and I wonder if you were just going into sports and entertainment venues, purely doing the concession digital signage, are you pressured also to be doing IPTV in the suites and elsewhere on the concourses and all that sort of thing? Or are the venues pretty much okay with you doing this piece of it, we'll have these other five companies do these other things?
Brett Crossley: I think that really like every industry that matures, the buyers in this case, the technology side of the stadium, they would rather have a smaller number of vendors to deal with than a larger number, and so as a practical concern, I think you're right, which is the way we think about it, we need to be able to do all of the things you would want to be able to do on anything that looks like a TV inside of a venue. That's part of what we have to be able to offer because, again, you are correct that people would rather have a single vendor, a single interface, et cetera, to deal with.
One place where I think that does break down a little differently is the content side because that’s just so complex on its own, and so we certainly have people that are leveraging us for the experience on the screens and all of that, who already have another vendor in as the IPTV solution who may have somebody different for menu boards, et cetera. And the one thing that they truly can't get anywhere else would be something similar to what we do with the content that's created on TV.
So you might have an IPTV service of some kind, and they're quite good at video networking, but they don't know much about the presentation side of it?
Brett Crossley: To be fair, I'm not going to say that they can't make something that's pretty, I think that you'll see, and I think it's been true of digital signage forever, which people will show you really pretty screens and, use that, whatever's on that screen as a substitute for, here's what you're going to have to do to get that to work. And the example I always give is, you look up at a concession stand or a digital menu board, and you can't really tell what you're looking at, is it just a static image? Is it an image over just an animation background? Or is it truly being rendered dynamically tied back to a point of sale? It's hard to tell.
So I think that at least on the content side, it becomes something where you would rather have something that works than be given a toolkit, especially when it comes time to actually build anything that's as close to as complex as what we do. You could build it, but you'd be spending a long time. It took us a long time to build what we have, right? And so if you just sat somebody down and you gave them a pile of tools, building that is going to take a lot of effort, and you're gonna have to hire people to do it and it's not like you get to build it once, you have to continue maintaining it and working on it, changing it out and adding to it over time. I think it's just difficult.
What's the business arrangement that you would have with a typical venue? Where do you start and stop?
Brett Crossley: Yeah, so our contractual arrangement most of the time is with, like I said, the corporate partnership side, right? If you think about whoever is in charge of making money from corporate partners or sponsors, that's usually who our contractual arrangement is with, and then a side part of that and really it happens in every deal that we're in and every stadium that we're in prior to the deal being signed, they bring in technology and those guys grill us and ask us, how are you gonna work with our system, and how do you do this? And we pull up diagrams because we've seen a lot of that before. And we're like, yeah, this is what we would do to work with you guys.
Once that's all done, we are working closely with the technical team to just make sure that everything is still operational. But then our business arrangements are with the corporate partnership side and we are paid kind of the way you think about it, just like anybody else, right? We get paid for things we build and put on the screen, and we don't have weird arrangements, I don’t know if you remember those guys like Arena Media Network, et cetera. There were multiple companies that would try to do that. We'll give it to you for free and we will keep some percentage of the inventory. In some cases, it was more like, we'll give it to you for free, we'll pay you to take it, and we'll keep part of the inventory.
We don't do anything weird like that. We're more of a direct business relationship with whoever is the equivalent of the rights holder and then they are the ones that are bringing the corporate partners.
Yeah. The whole build it, and they will come to things where we're putting screens in the washrooms and everywhere else, hoping that they could sell media time around it, there's been a legacy of failure there.
Brett Crossley: Yeah, and you still see it, and not to pick on people, right? But the classic one for me was the urinal TV, where you mount these TVs, individual screens up, I like to think that what we do is the opposite of that. What we want to do is to make something that we're a corporate partner, and when they see it on the screen, they are like, wow, that looks great.
We're active on LinkedIn, and my favorite thing is when somebody that works for the sponsor takes a picture of the TV screen, and they are on it, and it's the game-winner. You've just won the big game, and then their stuff's up, and they take that picture, and they throw that out on their LinkedIn. They like what they see there and the company they're keeping. As I said, if you just look at our product, it really does look good. In addition to kinda all the things that make fans want to be on it and the technology side, and I'm not saying that we wouldn't build something to work in urinals if a team wanted us to build that, but we certainly wouldn't go out of our way to do it without somebody really asking for it.
Yeah. If somebody's in trouble, they become the field maintenance guy for that. Do you do the deployment, hardware sourcing, or anything, or are you strictly on the software and automation?
Brett Crossley: We work on the hardware side as much as we need to, or as little as we have to.
We're not in the business of making players. We're not like a Brightsign. We try to remain pretty hardware neutral. We have preferences, of course, I think anybody who's been in this industry does. But if you think about the FanConnect TV product itself, it's a hybrid cloud solution, right? So there is a server installed on the premises. A lot of the heavy lifting is done in the cloud. The server is responsible for compositing, pulling everything together, and building out what is going to really be a show and that's how that's going to work.
The rest of the hardware for FanConnect TV would be the video distribution system, so we work with whatever is there. In many cases, we were replacing, let's say, you had your stadium, you had Channel 10.2 digital, or if you're using IPTV, it's an IP stream, and you've got kind of a symbol for it. We're often just replacing that. That's the first thing that we are doing at most places. Now there are places where we're doing more sophisticated things, where you can imagine, if you're in the suites at American Airline Center, every channel, no matter which channels you are tuned into, would still be wrapped in kind of an L bar wrap so that's an example of something that's different and does require a device behind every TV. But in most cases, pretty straightforward, we're tied into the existing distribution system, pushing that out, and as I said, we try to remain relatively hardware neutral. Our server is, of course, just one U rack-mounted server that's hardened and does what it's supposed to do. But we can work with various kinds of player technologies regarding digital signage, our IPTV solutions, the things we do in suites, et cetera.
Yeah, I would imagine you're seeing a lot of smart displays in suites now.
Brett Crossley: It's starting to happen. It's expensive to replace everything in a stadium, and you’d think replacing TVs would be something that would be something done more actively than it is. Still, right now, I think what are people wait until there's either a big renovation or they're just going to build another stadium, and so they're waiting on one of those two things to go in and do the big upgrade on the TVs. But yeah, smart TVs, things with a system-on-a-chip capability are certainly starting to move out there, and I’m starting to run into them. And venues would like you to use them if you can, right? They would rather just have a smaller number of things to break and manage. If you can avoid putting a box behind every TV, then that would be better.
Does it make any business difference to you guys in terms of whether you're working with Major League Baseball, which is gonna have 80+ home games a year, versus football that might have six or seven home games?
I just wonder about some of these massive venues that really don't get used very often. Are they more reticent to invest in technology?
Brett Crossley: I don't think that's the case. I think that what you'll find is, if you take an NFL stadium or a big college stadium, right? That would get you closer to your six or seven games. The fact that there are so few games means that the games that you have are extremely important and really in their minds, they want to make sure that nothing is going to go wrong. Whoever's in charge of the technology side, just wants to make sure that it's going to work. That's their number one concern.
The corporate partnership people, again they care the way that I put it, and this is true of really anything in sponsorship, not just us, but if you're a baseball team, if something goes wrong and you don't do the activation for that corporate partner that you were supposed to do, you have a lot of other games to make that up to them and comp them. If something goes wrong at a football game and you mess up what you've committed to a corporate partner, then you're in a different position because that game represented a significant percentage of what you were trying to do for them for the season.
I don't think we've ever faced any pushback because of the number of games. It's more on the technology side. They just want to make sure that it's rock solid, and we've been doing this long enough, we can point to that, and we can go, we've done so many games, we can't get an accurate count of them. We've tried, but it's thousands upon thousands of live games that we've produced at this point and so I think it's really a trust issue probably more than anything else.
Is it a challenge for something like an arena that may have an NHL team, an NBA team, a WNBA team, and they all have different sponsors, and they may change from night to night?
Brett Crossley: So we do support those. If you think about a complex example of that, it would be Capital One Arena in DC, where we were working with the Washington Wizards, The capitals and also Georgetown is in that same venue, and so you've got, NBA, NHL, NCAA, and then concerts, things like that, and the way that we operate the way we operate FanConnect TV is a little different from the rest of the digital signage. So today, we operate that as a managed service for them, and so they tell us what they are trying to do, what they want to do, and then we just help fulfill it and actually make it all work on the screens.
The needs for the different sponsors are really a byproduct of who is running corporate partnership at the venue and for the teams as far as if they need something different. So we do something similar at Acrisure Stadium, right? We work with the Pit Panthers and Pittsburgh Steelers, and there are two totally different corporate partnership teams. In some cases, it is the same team, whatever way they want us to work, we will work with that.
Tell me about the company. You're privately held?
Brett Crossley: We are privately held. We're not VC-backed. We have investors, and then many of us that are there are also investors, and we were as close to profitable as we want to be, right? And so if we're not profitable at any particular time, it's because we are intentionally spending more money. It's not because we have not yet achieved some measure of success.
Has all the weirdness of the last three years affected your industry or your business at all? I mean obviously, when nobody was going to games, that was a bit of a challenge, but it’s back.
Brett Crossley: Absolutely. Looking back on it, it was very difficult. I think when Covid hit, a bunch of people we worked with just shrugged to put their hands up and it was not good. One thing that was nice about that was we'd been working on kind of a full ground-up replacement of our core technology, and we went ahead and did that, and now we've seen that through to where we finalized that, right? So it's the third generation of this technology.
And we had the luxury of being able just to take our time, building it from scratch, knowing everything that we'd learned over this time, and so in some ways, I'd say that maybe was a little bit of a blessing, although it didn't seem like it at the time, watching the P&L statements for that time. But yeah, I'd say it was crazy for everybody.
Yeah, I've heard that story a few times. It's interesting when they say we didn't plan on this, but suddenly we have time to tear up the platform and start over, or do v3.
Brett Crossley: That work had already been started, right? And technology moves forward, right? And then we'd been looking at a number of things that we wanted to be able to do better in a kind of fully integrated way, and so the timing was good. We'd already started working on that effort. It's a lot of work, right? Replatforming is a significant amount of work.
What it allowed us to do, though, was to take our time and get everything right. There was no rush to try to get something in because the season was getting ready to start. So I'd say we've found some benefit. The one side note, though is things are bigger than they were pre-Covid in terms of what we do in live sports, in terms of attendance, in terms of the interest that we're getting, in terms of the way people view what they want to do inside of a stadium. I'd say that things are better now than they were pre-Covid.
I live in Canada, and I don't live anywhere near Toronto, but the Blue Jays just had their opener, and they did a huge refresh of a lot of the technology in that building, and one of the drivers said they have to up the game day experience. That's what people expect if they're going to be spending $14 on a beer and $80 on a ticket, that sort of thing.
Brett Crossley: Yeah, that's right, and it's not wrong when people say that sports venues are not competing with other sports venues. They're competing with the big-screen TV that's in your house, right? So putting something in front of the fans that is very impressive is really important, and we fit in well with that. During the off-season, when I say off-season, I'm really thinking of kinda the fall sports off-season, because we are running some games throughout the entire year, but when we had a chance, we went back and did a redesign of sort of the core of FanConnect TV, and we worked with graphic designers that have done work with Fox Sports, FX1, et cetera, to come up with something that was really polished and professional and look broadcast quality, because, that's what people wanna see, right? Especially when we come in, and we're like, we've got something that's better for your TVs, and they're like, okay, prove that, and that's what we ended up with.
I think one thing that's neat about our design is unlike an ESPN or somebody like that who has to essentially be neutral, right? Our broadcast is definitely themed for the home team, right? If you saw this at the University of Georgia, it is nice, and it's red and black, and it is bulldog television, and if you saw the same thing at the Chicago White Sox, it definitely looks like the White Sox, right? It's not trying to be neutral.
All right, Brett, thank you very much for spending the time with me.
Brett Crossley: Yeah, absolutely. I really appreciate it.
Tuesday Mar 28, 2023
Brad Koerner, Koerner Design
Tuesday Mar 28, 2023
Tuesday Mar 28, 2023
The 16:9 PODCAST IS SPONSORED BY SCREENFEED – DIGITAL SIGNAGE CONTENT
Brad Koerner is a Harvard-trained architect who has spent decades looking at how technology affects and defines built environments. He has a specific interest in technologies like lighting and digital displays.
An American based now in beautiful Amsterdam, Koerner works with both end-users and technology companies. By his own admission, he's obsessed by the question of how digital and interactive technologies are starting to disrupt centuries-old thinking about architectural design.
We met recently at Integrated Systems Europe, where he did a well-received talk on his ideas and observations. He later sent me the presentation deck, and it was pretty clear I needed to get him on this podcast.
In our chat, we get into a whole bunch of things - but focus quite a bit on the terms immersive and experiential ... what they mean and how they get applied.
Subscribe to this podcast: iTunes * Google Play * RSS
TRANSCRIPT
Brad, thank you for joining me from Amsterdam. Can you give me a background on what you do and what Koerner Design is all about?
Brad Koerner: Yeah, thanks, Dave, for having me. It's really an honor. So Koerner Design is my own design firm, and I focus on the future of the built environment, iSPAN, architectural lighting, digital signage, and circular economy product design.
What would be a typical engagement? If there is such a thing as typical.
Brad Koerner: A typical engagement for me is working with lighting design companies to create sustainable products. I've been engaged with a few digital signage and marketing firms looking at trends in digital media. I'm also working with DC Power folks, thinking about sort of infrastructure-level improvements that help lighting and digital signage.
So a company would come to you saying, we are thinking about doing this, but we don't have our heads wrapped around how it would all come together?
Brad Koerner: Yeah I speak a lot. I talk about the future of the built environment through a variety of different channels, and a lot of people find inspiration in the pieces that I do. For example, I just spoke at Integrated Systems Europe on immersive digital environments, and an earlier presentation I gave was called “Every surface is a screen, now what?”
The year before that I presented at Integrated Systems Europe, also on DC Power Systems. These videos go out there and they get people really inspired. They start to see these industries in new ways. They look at their problems with a fresh mind, and they really want to engage them in an innovation process, right? A proper design-driven innovation process. So I help them do a future envisioning session: what are the trends, what are the options, what do they have? Then we turn that into a sort of proper wishlist of product concepts or new business concepts, and then we drive it into the roadmap where it's scoped and prioritized, and they focus on that.
I also then take it all the way out and help 'em with product marketing and marketing communications for those new launches.
So they would come to you because you're not selling them anything other than your insight and expertise as opposed to trying to angle them toward how they're gonna use a fine-pitch LED wall?
Brad Koerner: Correct. I'm agnostic when it comes to all the technologies and equipment.
You talk in your presentations a lot about immersive digital experiences and I'm very curious about how you define immersive because I just wrote the other day about a company that described a billboard along a roadway as immersive, and I thought, boy, that's really stretching to call that immersive, but maybe I'm wrong.
Brad Koerner: I think it's helpful for your audience to understand by background. I'm an architect. I have two degrees in architecture, and when I was young, I always wanted to be a Disney Imagineer as a kid, and that's what drove me into architecture, and then as a side interest, I took up theater lighting and stage set design.
So I really think of immersive digital experiences from that sort of the architectural point of view where you are in physical places, you are surrounded by six surfaces and in today's world, all of those can become digital, they can become luminous, they can become a portal to the internet or to the digital world in some form or another. I've said this because I cross over between architectural lighting and digital signage a lot in my work.
Every pixel is a light source and every light source is a pixel in these modern building projects. And a lot of people still don't quite understand that concept yet. An immersive digital experience is becoming how you design an architectural space, and I think particularly a lot of architects and interior designers are really trailing behind the technology. They look at signage as a thing that's applied after the fact almost like a typical signage project, non-digital signage. They don't yet understand how to take everything they've been taught about architecture placemaking, creating thresholds, creating progression, creating a sense of space or wonder, efficiency or economy for working environments, or branded retail experience. They don't know how to take what they're so good at and apply digital to it and mix digital into that and use digital to create something really engaging placemaking. That's what I mean by immersive digital experiences.
You say they don't know how, but is it the case that they do want to?
Brad Koerner: Some for sure, some absolutely not. I saw Michael Schneider from Gensler speak at the Integrated Systems Europe show a few years ago, and Gensler has a whole group now that's called the Digital Experience Design Group, and this is exactly what they're focused on.
Gensler hired the Head of Imagineering at Disney.
Brad Koerner: Bob Weiss, right? So they get it. For every Gensler, that's out there, There are a lot of architects that think of digital experience design as well, “Don't put a TV on my wall that's gonna show a Coke ad”, right? And they don't get it right. They still think of architecture as concrete and steel and glass and like Le Corbusier's famous quote, “It's the magnificent play of forms bathed in light”, and I've inverted that many times and I've spoken and I said you know what happens when the forms themselves emit light and they become digital, how are you gonna design that? How do you design the element of time?
And with the element of time, you get this sort of very active storytelling capacity within architectural placemaking. So it's no longer enough for you to design a wall and it just sits there forever. You have to think about how that wall will change over time, right? These sorts of cycles of time, whether it's days, weeks, seasons, hours, minutes, or whatever that is, that wall can change dynamically. So why will you change it? How will you use that for placemaking and creating engaging experiences? I don't think most traditionally educated architects and interior designers can really get their heads around that yet. Even lighting designers have this sort of classic preset scene notion when it comes to controls. They're struggling with getting their heads around digital media and that live data stream, live media, and sort of interactivity.
But you seem to be suggesting that this is a matter of time as opposed to maybe it'll happen because I keep writing and talking about how that time is coming fairly quickly when architects and people who design physical spaces are thinking about LED and projection and other technologies as design materials, as design considerations.
Brad Koerner: Yeah. I think it's inevitable. The best science fiction has shown this for decades now. It's shown this amazing potential world we can live in, both the positive and the dystopian use of it like Children of Men. I just spoke in Integrated Systems Europe and I started my presentation by saying, “The future is now!” You look at Blade Runner, you look at Minority Report, you look at Star Trek, and all of those things that everybody still thinks of as like out there decades away in the future, now in fact, is decades behind us, right? And people haven't admitted to where we are, right?
The future is already here. It's just unevenly distributed and digital signage is definitely a world where that is super true, right? You go to the trade shows and a few years ago Sony had an 8k native-resolution digital wall that was eight meters wide and four meters tall, and it was hyperrealistic. That technology exists, but then you go to clients out there and you know they can't afford at any budget, anything, or they simply won't choose to do that, and I think it's inevitable. These architects that are afraid of it, I think what happens is somebody will put a digital sign in their space whether they like it or not for other reasons, and the worst-case scenario is it does become an ad, right? And that's not what they want in their space. So they better get their head around it and integrate it actively into their design concepts and really look at the poetics of it. How can they use simple things like beautiful motion graphics and beautiful textures?
Just like an interior designer would make a material sample board, a swatch board, they need to think of the digital media like that. What is the sort of swatches of digital media that they're presenting to their clients when they're designing these grand lobbies or offices or retailers or whatever?
I wonder though, with Gensler, they are an extremely well-established company with huge clients and everything else, and they work with Fortune 100s, fortune 500s, giant airports, and everything else. But there's a whole bunch of designers that are working with like a regional insurance company or something like that, and they're just saying, we get what you're saying, but our customers aren't gonna spend that money. They want a defined ROI. They don't want something that's just artistic and ethereal and vague in terms of what this does.
Brad Koerner: I think you're talking about a couple of things, right? So first off, there's just cheap, right? You'll always have customers that can never be cheap enough, right? But you have to segment the market, right? There are always customers at the high end of the range that wants the newest, the coolest, the hottest things at the beginning of the cycle. I joke that it's the sort of corporate lobby art budget crowd that always seems to have the money to do those sorts of fanciful things.
But the technology keeps plummeting in price, right? A lot of this technology was indeed available even 20 years ago, but it was at such a price point no one could afford it unless you're like U2 going on a concert tour with a LED screen with the width of a football field. They could afford it but no one else.
Or Comcast and their lobby because they were a cable company before streaming!
Brad Koerner: Yeah, the Comcast lobby, right? What is that already 15 years ago, right? It's like I said, the future is here. It's just unevenly distributed. So the price points just keep coming down until they become more and more common.
Could you have imagined even a decade ago that every little restaurant and coffee shop, and donut shop would have digital menu boards? It's amazing how fast that swept through the market, and right now we have these sorts of virtual production spaces, right? I think it was, what, just three years ago, the Mandalorian showed sort of the first instance of that, and there was that movie First Man Before, I think was the first that used an LED screen in camera on film. Now it's everywhere, right? Every studio around the world is installing these virtual production facilities within a year.
The accelerating rate of technological innovation is a term that’s thrown around, and I don't think people understand what accelerating rate means. AI image generation six months ago exploded onto the scene, and now everyone is using it every designer is thinking about how it's gonna disrupt them, and every content producer is thinking about how they can suddenly reduce the cost of their content generation using this sort of AI image generation, or increase their margin.
That was just six months ago, so I think with the technology becoming so cheap, it's low cost to visualize the concepts. It's such a low cost to design, commission, and program them. The hardware is continually plummeting in costs, so you to open up new opportunities, right? The menu boards in little mom-and-pop restaurants. There will always be the high end of the market going down into the middle end of the market, and they will use these, right? And they will have very smart design teams that come up with real ROI stories for why these things work, and it becomes fanciful and sci-fi today or yesterday, tomorrow just becomes normal and accepted. People don't even think about it anymore. The bottom end of the market will always be cheap. There'll always be people who can never save enough money or be stingy enough. That's in every market, right? Lighting, construction, you name it. It's always like that.
You're suggesting in your presentation that the digital and physical worlds are fusing in that with physical spaces being portals to a virtual world. I'm curious about what you mean by that, and maybe you can give me a couple of examples of how that's actually playing out.
Brad Koerner: Let me go back to when I was in school. I have a Master's in Architecture from Harvard, and when I was there, I did a thesis titled ‘Active Object Surfaces and Zones’ I looked at using physical interactive controls for retail displays and lighting, and this was in 1999. So I was a bit ahead of the scene on that one.
But in the early 200s, I believed that physical spaces would become the best interface to the internet which is, I know, a wild concept for many now. But you have to remember back then we were still using 20-inch Sony Trinitron screens were like the hot technology, and people were still using three-and-a-half-inch floppy discs and dial-up modems but the internet showed so much promise and there were a lot of designers doing really amazing websites and that was very spatial, right? And even just the notion of hypertext itself is very spatial.
So I kept imagining that physical spaces and using your body as the control and creating progression and threshold and a lot of the sort of architectural principles that you see in the internet experience could be combined. But then, in 2007, Steve Jobs launched the iPhone, and little black mirrors hijacked our internet experience, right?
Now though, I think people are over that, and we're saturated with personal devices and little black mirrors everywhere, the retailers are finally waking up to say, Hey, we need that digital in our physical experience, and so are the hospitality providers and healthcare providers. And they're starting to think, wait for a second, now we can tie all this digital data o tour spaces, right? And we can take all these great media that we have on our little black mirrors, and we can put it into our physical spaces. We can create these great experiences, and we can complete this cycle of gathering data from the real world, using it to drive great media content creation, live and interactivity and use it to drive behavior back in the real world, right? And it completes that virtuous cycle, and that's what I mean when I say architecture becomes a portal to the virtual world. A portal you can go back and forth between, right? The digital might come from into the space, and the spatial actions might drive digital data, right?
Can you give me some examples of where you've seen this applied and you think it really works because I've walked into some spaces that retail spaces and other spaces that are called immersive and experiential and thought to myself, being an old fart, cranky and everything that that's nice, but I don't see the point of this and I sometimes struggle with how they're gonna see a return out of this?
Brad Koerner: Yeah, I haven't seen many. Long story short: I think you just have this great divide where you have, for example, a lot of startups doing smart buildings, right? And they're deploying all these sensors, and they're gathering up all this data, but then they don't return that data back to the spaces. The data does very little to act on the physical space. Then you have all this great media content that's out there and you'll throw up media content on these screens, and it's not tied to anything that's happening in the space, right?
So it has no recognition of if somebody's even looking at it or not, much more if that person is gazing at it or wanting to engage it. There's been a lot of crazy stuff. There's indoor GPS positioning using lighting systems and apps. That was a flop. People have tried to tie app experiences into the real world. Not a lot of that has any real success story. You see a lot of these sorts of art-driven installations where I call it the be in Me and My Shadow problem. You can put a stereo vision camera system in space and track people exactly, but then, all they do is show the person's presence on some huge digital wall, and it's like me in my shadow, and there's no other point to it, so you have to think about why you need interaction in a space, right? I say for lighting and digital media, you can deliver the right light or the right content at the right place at the right time. You can use it to create really memorable human experiences, or you can use it to drive action, right? And those are areas that are not well explored yet, right? You don't have a lot of good designers out there connecting all of those systems together to create genuinely good experiences.
I actually worked with a startup called Digi Valet that makes a hotel room control system for luxury hotel rooms. So they make an app that sits on an iPad, but the other half of their system is this black box that interfaces with every physical control system in a modern hotel room like the thermostat, the blinds, the lighting, the media, everything that's Bluetooth, the Bluetooth controlled faucet on the bathtub, the Bluetooth coffee maker, the Bluetooth perfume/scent sprayer, and all that stuff.
And it was great because they asked me to help them. This had a lot of customers, these hotel chains wanted to develop a brand of digital media and lighting experiences as part of this iPad app, right? And it was a fascinating way to think about it. So you're in this hotel room, and you click, I want to watch a movie. It immediately says on your iPad, okay, can we set the cinema lighting? Yes. Can we lower the blinds? Yes. Would you like us to order you champagne and popcorn? Yes.
It totally changes the way you think of the room, right? You don't have lighting control pads and blinds, and you don't have to find the remote control for the TV. It's all about having this really smart butler that just knows what to do when you want to watch a movie.
So if you're a frequent flier or whatever, you travel between different Marriotts, and you use your loyalty card, and it just sets it up in your room. So you don't even do anything; that's your configuration.
Brad Koerner: That's the next level, right? That's future beyond that when you can add in the CRM systems on top of that so it remembers your preferences. Then the next level beyond that is there's almost this genie-like ability where they begin to understand your desires so well that they can start to add magic to your experience that you are not even expecting or the hotel can't do it at scale, right? I just think that's fascinating, like how could you take those principles of experience design and apply them into high-end retail or high-end healthcare, or even just a commercial office environment, right? It's a beautiful UX/UI experience in a space. We desperately need to see more intelligence and creativity around using digital in physical spaces.
Yeah, I wanted to ask about the discipline that needs to be enforced at the start of these things. When I've done consulting in my dark past, I would try to ensure the first question out of my mouth that I would throw at the customer or a client was: why are you doing this? What do you want to see out of it? And so on.
Is that the sort of thing that needs to be addressed super early so that it's not just, “We've seen these big video walls and other lobbies, we want one too.”
Brad Koerner: Usually, the first question I ask is, what's your budget? But that doesn't work too well.
Can you afford me?
Brad Koerner: It's both of those, right? It's what's your budget and why? I think that, first off, many of these companies have a lot more budgets if they want. They just don't want to at first, they don't understand what is possible, they don't understand what it would cost, and they don't understand the ROI on that investment. So it's a real uphill battle, and that tail is as old as time, that's an architect preaching an upgraded finish on the oak panels, or that's a lighting designer preaching adding dimming into the system. It's always like that in these construction projects, and you are right, about the why, you can have all this technology in the world, right? Anything you can dream, you can do, right? So technology is not the limiting factor. It's imagination, right? Imagination is the limiting factor and thinking is almost like a movie director or the early stages of any media content where you have to think in storyboards, right? You have to think in moments of time. You have to think about their journey, what's the user journey, and what's the user experience, right?
If you've seen any of these big design firms, they map user journeys, right? Throughout the omnichannel retail experience, they create these huge flow charts that take up a whole wall. You have to think about that in physical places now. So if you're walking into the shopping mall, do you put signage at the door's threshold? Classically, in retail design, you don't put anything really important at the threshold of the door because you need a sort of decompression zone where people charge into a space. Then they slow down, and then they look around, right?
There's just a lot of classic common sense design stuff that is not being employed in digital signage, particularly in any interactivity, right? You need these new combinations of skill sets that just don't exist yet. You almost need to take a game designer with a world-class architect and make them work together and see what happens, right? You need to take a Hollywood storyboard artist and combine them with a technologist and make them work together and see what happens., and that's what's missing right now from all of this, and I think you have companies like Moment Factory and Gensler and some out there are on that bleeding edge that they are trying to do that. Here in Amsterdam, there's Purple Storytelling, and there are lots of little groups that see the future that they struggle with, right?
I think they struggle to see, and get the clients to understand the potential. I think things like Unreal Engine and live rendering and that sort of starting with a game engine, which is so powerful with live rendering, is going to make visualizing these scenarios so much faster, so much more profound, instead of starting with a classic architectural sketch, and then you went to an architectural photorealistic rendering, but it didn't move. Now architects are using things like Unreal Engine to make these animations, particularly in the luxury real estate marketing firm. Have you ever seen what some of these high-end luxury real estate developments are doing for their marketing? It's unreal. It's Hollywood-grade special effects from just 10 years ago, and they're using it just to sell condos.
You start to take the power of that, and you add it into very specific segments. So, retailers, have their very specific sort of customer flows, customer journeys, and ROI expectations, and hospitality operators have their very specific desires, healthcare facilities, have very different customer journeys. With Unreal Engine, you can now tie together these professions. It's the first time in my career that I've seen this flow complete, that you can use architectural models in BIM in Unreal Engine, and you can show these scenarios. You can animate them, you can set up the interactivity, right? Cuz it's a game engine at heart, and then you can use that for commissioning these systems. I think that will be the next step in all of this.
But are people like architects and those who design physical spaces, are they conditioned and trained and understanding about the ROI needs of their clients? Is that something they've always had to address, or is this new because of this more mysterious ROI that you would see out of an immersive space?
Brad Koerner: It's a great question. I don't think they are. I have two degrees in architecture. I was never trained to think of a business scenario. Again, it's combining different skill sets, right? It's almost like you need to combine an architect with an MBA and think about why, what's the point? It's a real challenge, right? Obviously, if you're a high-end real estate developer and you're doing luxury condos, you know that if you add marble to the lobby, you're going to get a certain ROI. You might not have it calculated, but you understand your customers, and you understand it's going to help with sales. You understand that it's worth it, right? You can't just put chipboard and cheap carpet in, you have gotta do the upgraded finishes, but you also know where not to spend the money, and you know where it’s not going to get return value to you.
And there's an intuitive aspect to that you can never just set up in a spreadsheet, and $5,223.32 will be your ROI in 32 days. You'll never get that precise, and that's why you need a creative mind and a business mind, and they need to come together to figure these things out, but it will happen, right? If you create a great experience for a hospitality provider, right? They'll know it. They'll know it from the customer feedback, reviews, and qualitative comments on that, right? And eventually, that drives revenue for them. But those sort of attribution problems for ROI is vexing in every industry.
Marketing goes through this all the time, but it will happen more and more in physical placemaking with these systems, and I think it's a skill. Again, people have to get good at this. It doesn't exist now, and it's tricky because it combines several skill sets that have never worked together in the past and you have to fuse them to sort these things.
Yeah, I listened to a panel at Digital Signage Experience, and I believe it was somebody from Moment Factory who was saying that in terms of a return, they're now starting to hear from the HR departments of companies who are saying that having an experiential aspect to their lobby and their overall space is incredibly important in terms of recruitment and retainment of employees these days that particularly in technology jobs where you may have several choices as to who you're going to work for, what that space looks like and how you feel in it matters.
Brad Koerner: Yeah. It's like in the commercial office section, right? I forget the exact numbers, but it's $3 a square foot, $30 a square foot, and $300 a square foot, right? Three bucks are your cost of energy, and 300 is your cost of salary, right? So should you focus on saving a few pennies of energy, or should you focus on saving hundreds of dollars of efficiency for your employees and salaries? That's just the concept that has to be employed everywhere. There's this sort of scale of effect that is critical to ROI. Understanding that is often siloed, right? You get a salesperson running in with some smart building system. They're talking about saving energy because we'll turn all the lights off more. And they don't understand that will create a lousy experience for the workers, right? And it will really damage the effectiveness of the workers and retention and all that, right? Same thing with digital signage, anything, right? If you put a big LED wall into a commercial office, will you just put a waterfall on it? Is that going to help make your employees happy? Maybe, maybe it's as dumb as that. But could you do something more sophisticated with it? Could you recognize employee accomplishments live? Could you show employee performance live depending on what your business or industry is, do you give people a pat on the back instantaneously? There are so many scenarios that could be developed around these technologies when, again, when the surfaces you're surrounded by become digital. You need to think about what they do, how they react to you, and how people react to those surfaces.? What is that cycle of action-reaction?
It sounds like you're saying there's more to this stuff than eye candy.
Brad Koerner: Eye candy's great. I'm not going to argue against eye candy. There's a lot in this world that is just for eye candy's sake, and that makes a big difference, right? This is a classic design. This is architecture, this is interior design, this is a brand design, and retail design. Some of it is just eye candy, and people know how to justify that, right? That’s a tale as old as time, right? It's making a statement. It's making a brand, culture, making, and experience. Why does Starbucks charge $8 for a coffee when they spend 50 cents on it?
Because they've invested heavily in how their stores look, they feel and smell and sound, and there's just a lot of eye candy there, right? They consciously built all that so that they could charge that price premium. So yeah, it will just be eye candy for some of the digital stuff. I joke about the waterfalls, but can you beat the waterfall? In terms of your media content, it's mesmerizing, right? It's biomimetic, it makes you feel comfortable. I think humans have these deep-seated connections to natural effects. Maybe you just put a glorious force scene on your huge LED wall, and somehow the best thing you can show, right? I don't know. It could be as dumb as that. You have to test it.
I think the other thing people have to get savvy on is that you don't just build it and walk away. You have to build and operate it, and these teams that are developing these concepts will have to work with the operators, whoever it is to tweak it, right? To look at, we're going to make a whole bunch of assumptions, right? There are cycles of time, there's media content, there's interactivity, there are all these new things that people have to figure out. They can simulate it upfront. Nowadays, they can go into the virtual world during the construction project and get it mostly right or pretty close. But then, who will fine-tune that in the field over time or refresh it over time? Most people don't even think of the media budget. How many people forget about, oh wait, you mean we need a media budget for all these screens we've built? They can't even do that, and it's a long way before you're going to have clients actively spending the money to tweak this stuff and make sure it's optimal over time.
All right. Great conversation. I think we could have gone on for three hours, but gotta cut it off at some point. If people want to find out more about your company or perhaps bring you out to speak to their company or a conference, where do they find you online?
Brad Koerner: They can find me on LinkedIn just Brad Koerner or KoernerDesign.com.
All right. Thank you very much for spending some time with me.
Brad Koerner: Great. Thanks, Dave.
Wednesday Mar 08, 2023
Brandon Harp, Electrosonic
Wednesday Mar 08, 2023
Wednesday Mar 08, 2023
The 16:9 PODCAST IS SPONSORED BY SCREENFEED – DIGITAL SIGNAGE CONTENT
When I see an ambitious new visual display project lit up at a new or reno'd airport, office tower or attraction, I just about assume that if it's in the US, the company that put it in is probably Electrosonic.
The company is, technically, an AV systems integrator, and there are lots of them out there, of all sizes. But where corporate meeting spaces, control rooms and reception areas are the day-to-day work for most of those companies, the bread and butter work for Electrosonic is in locations where experience is the primary consideration and mindset.
The company - which has offices in the US, Europe and Asia - has a ton of experience and expertise in delivering AV and IT jobs that involve more than getting infrastructure in place. They work a lot with creative design and technology shops who are fantastic at the big ideas and compelling visuals, but want and need to hand off the install to a seasoned team.
I had a great chat about Electrosonic with Brandon Harp, a senior business development manager working out of the company's New York offices.
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TRANSCRIPT
Brandon, thank you for joining me. Can you give me the rundown on Electrosonic and what it does that's different from a lot of the AV integrators who are out there?
Brandon Harp: Sure. Thanks, David. I appreciate you having me on the podcast. I've been a longtime admirer of your content and so forth, so I've been following you for many years, so I really appreciate the opportunity.
So Electrosonic is a technology professional services firm. We design, build and support innovative technology solutions that create unforgettable experiences where people live, work, and play for many years. You probably know of us from the museum and the theme park world but we've expanded over the years and have really started to focus solely on immersive and experiential environments, and so for us, we're a bit of a specialized firm. We do consider ourselves still a boutique-style AV systems integrator, but the kinds of projects that we work on are global level and span a multitude of different industries, including corporate and retail and attractions and a multitude of others.
You said you expanded into this from museums and those kinds of attractions. Was that a conscious decision or is that just where the business was going?
Brandon Harp: Right after Covid, we made a decision to go back to our roots, which were always these complex sort of custom environments that we had been working in for many years, which our clients best knew us for. We've done away with just the kind of typical hang-and-bang conference room projects. We still do a portion of those if there is an element to a more project that fits better into our scope. But we've really done a good job, I think, as a company of being able to identify where our strengths are and where we can really add value for our customers. And that is really in that experiential and immersive sort of environment working with video walls, various different interactives, projection mapping, and things of that nature.
Is it a situation where you don't really want to do the meat, potatoes, boardroom, collaboration displays, all that sort of stuff because there's no money in it or minimal money in it, or is it just not terribly interesting?
Brandon Harp: I think it's a combination of all those things, Dave, I think with the standard corporate conference rooms, it's really become a race to the bottom, and we just as a company have recognized where our strengths are on delivering these projects and really our delivery model best lends itself to more of these custom really high-end engineering projects where we need a certain level of technical ability that not all integrators have, and so those are the kinds of projects that we're setting our sights on, and that's the ones that we continue to get hired for because of our ability to not only project manage, but engineer and design.
Something you might not know about us is that we actually have a full design consulting firm within our larger company, and we look at things through, I would say, a much more creative lens. So it's less about just engineering a system, and it's more about looking at it through a creative lens and saying, all right, what's the user experience? What is the story that you're trying to tell? How does that all get fused with the architecture? And then really thinking about at the end of the day, what is the human connection and what are they gonna feel as the system gets implemented and they go on to use it.
Yeah, you've found this niche and pretty lucrative niche in that a lot of the AV/IT systems guys can be very good at the technical side of putting something in. But they've probably not spent a lot of time with video walls or projection mapping or inversive environments, and you just start talking about that and they're looking at you like, could you say that again?
Brandon Harp: Yeah, absolutely. I think, again, it goes back to our roots, working on dark rides and so forth in theme parks. If you can imagine some of the complexities of being able to projection map in an environment like that, we've been able to essentially replicate that and bring that same methodology, that same sort of design consulting and engineering into corporate spaces, briefing centers, visitor centers, lobby attractions, things like that where you've got this sort of experiential element that we're best known for, and then we help you think through it creatively and our creative technologists and knowledge experts can really help the clients think more about, okay, what is that user experience? What do you want them to feel? As opposed to just looking at boxes and squares on walls and trying to price technology.
So our approach has been a bit different, but it seems to be very effective with our clientele, and they like the fact that we're not afraid to take the technology away from them in order to really think through that content experience, to think through what is it not only short term but also the longer term for their environment.
It's interesting because so many places are now being defined as attractions. So 20 years ago, an attraction was a theme park or a museum but now, as you alluded, a corporate lobby is an attraction.
Brandon Harp: That's right. We've seen a big uptick in that right around the time of Covid, so 2020 and onward. What we're also seeing is that there are quite a few real estate developers now who are trying to take on these attractions. I think one that you're probably familiar with, that everyone has either been to or is aware of now, is SUMMIT One Vanderbilt, where SL Green was the real estate developer behind an attraction like that, which is an observation deck that spans multiple floors and is multi-sensory.
So working with real estate developers like that who have a good understanding of real estate and square footage, how do we apply that to an attraction-based environment and help them be able to have the very best system to create that guest experience, and that's what we've been doing and that's why we've continued to get hired for these large scale projects that seem to have those sorts of elements.
For that one in New York, what was driving SL Green?
Brandon Harp: What was really driving SL Green was the vision that their CEO, Mark Holliday had to have this observation deck that sits high above the clouds in New York, and as part of a major building that went up just next door to Grand Central Station, which is One Vanderbilt and so 90 stories up in the air, you've got this multi-sensory experience where people can not only come and see and enjoy the views of New York but also be immersed in these various different rooms and environments that really lend itself to something for everyone.
You don't necessarily have to be a tourist to enjoy it. You can also be a local or someone just passing through. But it really lends itself to something for everyone, and now we're starting to see more and more of these major supertalls that are going up, that are changing the New York skyline, having an element of an immersive experience in it, whether it's an observation deck or a lobby experience, an elevator experience, things of that nature.
And where did they see the money out of that? If it's an observatory high up, I assume they're charging for that.
Brandon Harp: They are. It's a paid attraction. So that uptick in paid attractions inside of corporate, what were typically fully corporate buildings is now something that we're seeing more and more of.
Yes, you may have, all the other floors in the building are corporate tenants, just like One Vanderbilt. But it also has this attraction there that spans four floors. So you're starting to see this mix of not only corporate, but attraction-based entertainment, and think about it, in New York City, it's not a theme park like a Disney World or a Universal, where you've got lots and lots of acres to play with. We're talking about going vertically here for these attractions that go up in New York City. So we're starting to see a real uptick in that and really being able to apply all of that methodology that we've developed over the years in how to deliver those projects successfully for the theme park business to these corporate institutions.
I'm assuming it's a bit of a delicate dance for these property developers if they do that sort of thing because if you turn your building into a tourist attraction, you're at the risk of a lot of crowds and people wandering around, and the regular tenants are fighting their way to get to the elevators and things.
Brandon Harp: Yeah, I think to combat that, what they've done is for example, One Vanderbilt, they have all the tenants have their own lobby, so they're actually utilizing their own elevators and so forth. So their day is not interrupted at all by anything in terms of crowds or anyone trying to get into One Vanderbilt. For the observation deck in SUMMIT, it's got its own separate entrance and it's actually very well thought through. I think what impressed me most about SL Green was their ability to adapt to the ever-changing kind of design and environment, and they really did a good job of listening to all of the consultants that they brought in.
Again, they're real estate developers, and so to take on a major attraction inside one of the largest buildings in Manhattan is something that was a bit foreign to them. But they really brought in great consultants to help them think through every aspect of this, which is why it runs so effectively and efficiently now.
You mentioned that you have a design consultancy. What is all that about?
Brandon Harp: So our design consultancy practice is based out of Las Vegas. We do have design consultants now that are remote as well. So we have a few here on the East coast and in Denver and a couple of other strategic places around the US and overseas in Europe.
But for us, it's very much about AV consulting. What you may not know about us is that we also do security surveillance, access control, as well as information communication technology, which is your structured cabling as well as acoustics. So oftentimes we find ourselves in these conversations very early on with architects and owners and people who are designing these experiences, and so they want us to be a part of their team to help steer the technology decisions, and so we're finding that we're being hired more and more early on in these projects because we look at things through that creative lens. We consider ourselves creative technologists, very true to our trade and very client-focused throughout, and being involved very early to help steer and guide the solution through master planning is very important to the outcome of these projects, and so now what we're seeing is an uptick in design-build as well, because we're working very closely with the owner and the owner reps at an early stage to really flush out the design and the intent, and then if we're able to come in and do the AV build, which we're finding is happening more and more, there seems to be a real desire to have one hand to shake at the end of the day when it comes for all design-build and all the way through to support, which is what we offer.
Do you find that the end users, whether they're property developers or just building owners or major tenants or whatever, that they are smarter or more sophisticated about what they wanna do than maybe they were 5-10 years ago?
Brandon Harp: That's a great question. I think it's still a mixed bag. Honestly, I think there's oftentimes when clients come to us with blue sky ideas, or maybe they have some sort of concept renderings that they had hired a firm to put together for them and then they ask us, "How do we execute this?” and “What do we need to be able to be successful?” And I think that's where our design consulting practice comes in. We help them really think about not only the technology but more importantly, what's the outcome, how the user feels and what are they gonna experience here that's gonna make them want to continue to come back and continue to talk about this.
So getting in early like that has really been very effective for us, and then the build portion of it as well, which we've always been very known for. Having a good understanding of the project from day one has really made it very effective for us.
How important is scale? We've seen all kinds of press releases about a LED video wall that's 60 feet wide or 100 feet wide, whatever the dimensions are. But I'm wondering if you're starting to see a more sophisticated approach where you are not just thinking about the scale, but how it fits, how is this gonna work within the environment? All those sorts of things.
Brandon Harp: Yeah, I think some of the clientele has thought that through or they've gathered information from other projects. Some do have maybe a bit of a more sophisticated approach, or they have someone who's a technology advisor who's been helping them think through things. I think where we come in is really to be able to help them take that to fruition, right? And take it to the next step. So I do think it's still a bit of a mixed bag.
In terms of the scale itself, it depends on the project. I think we do a number of projects that are gonna have multiple locations over and over again, and we create this blueprint for those, but we also do a lot of these one-off projects, as you can imagine, especially when it comes to museums and theme parks and briefing centers and things of that nature where it's one of a kind experience and we really have to be able to deliver on what the client's looking for.
Yeah, and that's a bit of a challenge I would imagine. One-off projects are awesome when they come along, but it becomes a bit of a roller coaster ride as opposed to the predictable recurring services you might be providing.
Brandon Harp: It is very much and we find with these one-off projects that because of the size and the scale of them, typically they take anywhere from a year onwards to be able to complete. So you can imagine that requires a great deal of patience and skill and making sure that we have updated schedules just strong project management, and strong design engineering early on to make sure that we have the very best system in place. But, also the supply chain is another thing, right? And so not to go too far of a rabbit hole on that. But if your projects are typically a year to a year and a half in length, often what we're finding now is that the client wants to know right out of the gates, are there any stumbling blocks in terms of supply chain challenges? And then we have to order this material, and equipment very early on in the process in order to combat that or we have to find something else that we can use in order to deliver the system on time and within budget. So it's a bit of, as you said, a rollercoaster is a great way to describe it.
You said a year and a half. With some airports and let's say hospital campuses, that's probably more like a 4-5 year planning cycle, right?
Brandon Harp: Certainly, yeah. I think the year to a year and a half seems to be average, but yes, to your point, we often find ourselves involved in airport projects and so forth where the delivery date is 2026 or 2028 even now. And again, I think it has to do with being able to get in early with the right people, make sure that we're providing them with what they need to be successful, and then staying in touch and in tune with what's going on through the life cycle of the project and the management of it. Project management in AV has always been a hot point, right?
And so for us, it's very much about the project managers being able to see through a project of that length properly and show it the adequate attention that it needs to be successful.
I'm also guessing that because you're sometimes looking that far out for an airport or something like that, you really need to stay on top of emerging technology and think about, okay, I'm not thinking about what I'm going to put in right now with what's available right now, I'm thinking about what's going to be out there three years from now, which might be micro LED or something else that isn't really commercially available right now.
Brandon Harp: That's very true and that's a great point. It's certainly something that we take into consideration on all of these projects.
I think you have to look at the manufacturers and the longevity of their companies. Are they gonna be around for many years to come? And what does the product roadmap look like? And I think that's why we have our key partners that we work with who are very good at understanding what's coming, what's future, making sure that they stay top of mind with all of our designers and our engineers to ensure that at the end of the day when the system is installed, that it is the most recent and up to date technology, and it's not something that's going to be phased out or end of life that just simply isn't feasible when it comes to spares or replacements, anything like that.
So Thinking that through, especially on these longer projects is really important and that's what makes us effective.
I've been intrigued when I've seen big design agencies like Gensler or content-driven technology shops like Moment Factory where they've worked with you guys a lot because I get the sense they know what they're good at, they know how far they can take a big idea, but at some point, they have to hand it off to somebody who's good at the execution.
Brandon Harp: That's exactly right. We have developed, I think, the kind of the secret sauce for being able to work with companies like Gensler and Moment Factory, because you're right, at the end of the day, they're the big thinkers, right? They're the creatives who ultimately generate the user experience that is on those LED video walls, or on the digital signage or the interactive, or the inside of the projection mapping, and so forth.
For us, we have to play that supporting role and not every project is exactly the same, but we do understand what their strengths and capabilities are And then we play a very supporting role in that, and we've now made it so that it's a well-oiled machine and as partners, we're very agile and limber enough to be able to say, we need to pivot a little bit, or we need to look at this a little bit differently than the last one. And again, not Two projects are all the same, and so I think it's our ability to work with them and adapt to ever-changing circumstances and projects and environments that allow us to be as effective together as we are.
Do you try hard to stay in your lane, so to speak, and not get into the creative stuff?
Brandon Harp: I think at the end of the day, you have to have a creative vein in you to work here, right? That's ultimately what we do. We're constantly pushing the envelope of what's possible, but we also have to put the trust in our partners, and I think we do a really good job of that.
We've never been a company that's done content or experience design, and the reason for that is that we have a multitude of partners who do and who do it very well, and so for us, it's more about playing that supporting role with making sure that the technology is something that they can work with when they're creating their content but it's also something that is gonna be easy for the end user to use if that's a requirement, and really just play that supporting role.
I think that, at the end of the day, what people see in what they view on these large displays, as you talked about, is really the product of the creative minds that go into the content and the storytelling, and we're there to play that supportive role.
I think that's more what I'm asking is: you guys conceivably could have a creative team that would produce the big visuals and so on, but because you work with some great partners, you do your thing and let them do their thing and don't get into a competition.
Brandon Harp: That's right. There's no competition there. Where I think we do is supplement them very well is our executive consulting. So we have Will Bolen, Chris Conti, and Chris Moore, who are executive consultants who work for us, those three individuals are super talented. They've got a great deal of experience, both working hand in hand with clients to help them think through what it is that they're looking to do with their space. But they're also very technical, right? So they come up with sketches and little drawings and things like that can really make them multi-faceted individuals within the company, and that's why they're so effective.
Oftentimes they get paired with the likes of Moment Factory or Gensler or an architect or an experienced design firm who's looking to help their client uncover what is possible with the technology and then from there, we work it through design consulting and into systems integration, and then all the way through to service.
Do you have end users who are coming to you and just basically saying, “I want that!” because they've seen something?
Brandon Harp: Yeah, believe it or not, they do, and I revert back to SUMMIT One Vanderbilt again because it's very unique. It's award-winning and it's just something that everybody, I think is aware of or familiar with now, especially in New York City and they constantly are saying, how do we create that, or even in the airport environments like we just did Terminal A at Newark, I've had multiple airports say to me, “We want that 232-foot long video wall right at departures or behind the check encounter” and our response to that, Dave, is often, do something different.
It's great to be able to pull inspiration from other projects, but no one wants to see the same project replicated. So how do you pull inspiration from something that's that unique, but then put your own spin on it? And especially in an airport environment, because it is high traffic, it's a public place, millions of people and users go through there. How do you do something that differentiates? And that's what we always try to coach our clients into thinking about, what is it that's gonna make you the next talk of the town? How do you get yourself to that point where people are taking selfies or people are talking about the technology and the experience that they had as they moved through the airport? So those are the kinds of things we keep in mind.
Yeah, there are really two tracks in airports. You've got the big immersive experiential, almost like public art installations, but then you've got a lot of LED and flat panel displays that are just about making the experience of getting your way through the airport to a gate and onto a plane easier.
Brandon Harp: I actually think there are three, Dave. I would add the digital out-of-home experience as well there, because there's the Clear Channels and the Intersections of the world all have these large contracts with these airports and real estate owners who have their screens as well And in a lot of these airport environments, like Newark for example, there are over 80 displays there that is specifically geared towards targeted advertising.
Then you've got your art piece, which you mentioned, which is more experiential and immersive, and then the third pillar is the typical airport communications, right? Because people have to know where their flight is and how to get from point A to point B, whether it's wayfinding or something of that nature. But there's really a multitude of digital endpoints that go into any airport or terminal experience.
Yeah, I have been blabbering away lately that if you really wanna see the state of the art of digital signage and how that technology is applied in different ways, go look at a renovated or new airport terminal.
Brandon Harp: It's true, and the government's flushing a lot of money into obviously the infrastructure and redevelopment of these airports.
That trend we feel is gonna continue and it's gonna continue to push the envelope for what is possible. I think at the end of the day, you're finding that these old, outdated airports really just need a refresh, something that's gonna make people wanna fly out of there. Something that's gonna set the tone for the trip that they're about to go on. But also just as silly as it sounds, put a smile on their face. If there's a way to make people feel at home or comfortable or keep them entertained so that they're buying more concessions within an airport environment, that's a huge win for that terminal and that airport.
I just wanna know where my gate is, how to get there, and how long is it gonna take me to get through the various lines.
Brandon Harp: And maybe where the bar is?
Never. (Laughter)
Is there a trend that you're starting to see emerge?
Brandon Harp: Yeah I think there is. I think, just at the start of 2023, we've seen a real uptick when it comes to experiential and immersive environments in higher education, but also in sports.
We're finding more and more of these higher education institutions wanna give students access to a big video wall that may have a multitude of interactive touchpoints and ways of being able to use the system itself and interact with it across a multitude of different tracks throughout the school.
So there's been a lot of that recently and then sports as well. These kinds of one-off experiences within stadiums and training facilities and things like that. There really has been an uptick in those through since the start of the year and we're expecting that trend to continue.
Is there a big project that you're allowed to talk about that we're gonna see in the next calendar year?
Brandon Harp: I can't really get into the specifics and the name of it, but the one that comes to mind for me is an immersive museum experience that's gonna be happening downtown in Manhattan, just outside of The Oculus, so a well-traveled area. It's a building that probably anybody who's from New York or has been to that part of the area is gonna be revamped and it's gonna be led by an immersive artist and a team of people who are really invested in not only the video but the audio portion of any given museum experience.
So you can expect upwards of 20+ video walls and large-scale rooms with huge projection-mapped walls, floors, and ceilings. Just a variety of different experiences as you travel through each room. So it's something that's on the horizon, and the scheduled opening date is right around Labor Day of this year. So we'll see if that holds true. But in any case, it is something that's upcoming and we can give you more information on it as it unfolds.
That’s led by a real estate developer?
Brandon Harp: It is another real estate developer, so much like we were talking about earlier in the conversation with SL Green, this is another company that's very prominent in New York. This is the first real venture for them into more of the attractions type of space. So they do need a lot of help, but we're there to provide it and the support that they need to be successful, and we really anticipate this being a game changer for them and especially for lower Manhattan.
All right, Brandon, thank you!
Brandon Harp: Yeah, thanks, Dave. I appreciate you having me on today.
Tuesday Feb 21, 2023
John Hoyle, Sook
Tuesday Feb 21, 2023
Tuesday Feb 21, 2023
The 16:9 PODCAST IS SPONSORED BY SCREENFEED – DIGITAL SIGNAGE CONTENT
If an entrepreneur or an established brand wants to open a temporary pop-up store on a busy retail street, there's a lot of planning, work and cost involved in making that actually happen.
So what if there was a retail space in a high profile location that could be rented for as short a time window as an hour ... that uses LCD video walls and software to establish the look and feel of the shop?
That's the operating premise behind Sook, an interesting UK start-up that has digital-first spaces for rent in attractive locations around the UK, including London's retail-lined Oxford Street.
I visited that Oxford Street location when I was in London recently, and had a good chat with Sook founder and CEO John Hoyle.
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TRANSCRIPT
John Hoyle: So it's really easy to quickly create a clean and bespoke environment and so that means you can literally do whatever you want in these places. It's a space that is as much about non-retail uses as it is about retail. It could be somewhere to have a screening of a movie, it could be somewhere to do yoga, pilates, or meditation or it's a shop in the more traditional form.
The whole rationale behind this is that if you facilitate hourly access to units like this, which would otherwise be empty, you can actually drive three to five times more revenue than a traditional lease because you are making use of the time before, you know, standard rent is over a 10-year period, deeply inefficient because someone sits in a space and expects there to be effectively making all of their money on in the peak hours whenever those are, which is like a Saturday. Using this you can drive your own footfall, drive different peaks across 120 hours of the week and generate more revenue, as well as make it much more efficient for occupiers to come and engage with the space.
It's completely modular. You can take this entire fit-out away and move it elsewhere. It's all free-standing so there's a selection of furniture. You can see the hanging rails and shelving units here which makes it super easy for someone to come and self-serve if they want to. So using QR codes, you can learn exactly what you need to do, full WiFi, utilities, audio, et cetera, anyone can come quickly turn this into a space to use for whatever they want. These modules obviously can be disassembled and moved to another space. So we don't take leases. We are just a device that operates as an asset management tool within specific spaces. If a landlord wants to move us, they can, there's a small cost associated with that, but it's much more economically and environmentally sustainable to have this fit-out that can be reused in multiple other locations.
This one is slightly compromised because we're over two stories and the rear loading is in the basement. It actually works better on one level with a big back of the house. It's a bit like a theater set. All of the physical preparation happens out back so that you can efficiently roll into the space for your activation.
I'll show you downstairs. Everything that’s here, we can take away. There’s storage out back, but this has been everything from a rave for Jaegrmeister who launched a party, to the launch of a High Streets Reports by a big industry insider to a salsa dancing class. So it's all about using the same space for multiple different activations and doing it in a way that allows digital content to drive how you make that place appropriate.
That's why it's interesting to me that they have started to add digital screens to retail kind of after the fact and now we're in the situation where you have people who look like this, that are setting up pop-up retail with digital as the enabling part of it. So you can change the feel of a store, change the message, and everything else with a few keystrokes.
John Hoyle: Absolutely. If you think about where the brands of the future come from, they are gonna predominantly start online because the barriers to entry are much lower. But they need that IRL engagement to have an authentic touchpoint with their customers. But they don't wanna scale as the private equity-backed retailers in the past have by taking 120 leases and then marketing them. They want to dip in and dip out and have an online-type solution that's agile to determine where works best for their product and to make use of the fact that they can drive their own footfall through social media.
So if you think about it, I suppose a good example in the UK might be a, let's say Superdry, a challenger brand that's had to play the game of real estate to get where it is, to become AN established brand. We believe that we can facilitate that happening for the brands of the future without them having to need a real estate department to negotiate leases, to deal with the portfolio of assets. In fact, there will be this agile solution that they can use as they see fit, and what's interesting about that is that suddenly you are changing the role of a shop as a static distribution channel for stuff, and you're making it much more of a point of engagement for customers to actually meet IRL, the people that sit behind their brand and the products, and that can happen everywhere. There's no need now for perhaps the flagship in Central London or the concept store in Coven Garden because the various entries are lowered by this solution, you could take your product to secondary locations around the UK, do it for a weekend drives an enormous reaction because the people in, let's say Northeast England are not used to seeing something like that and then get out without any of the legacy, liabilities or commitments that you would normally get through these.
It's a service in just about every respect, right?
If I'm a fashion designer, which is a very novel concept, if I wanted to open up a pop-up store for the weekend, I wouldn't have to worry about the AV. I wouldn't have to worry about any of that stuff, I just do a deal to have the space for six hours or whatever it is and you guys can take it from there, right?
John Hoyle: You can dice it in whatever way you want. So you could be completely absent and we would run the entire piece for you, including fulfillment, staffing, and even the design of your space, and you can obviously have complete control because using Canva, which is an Australian Photoshop unicorn, you can drag and drop whatever you want onto the walls and you can walk around in 3D before you come here. So you can be in the US and control space in Oxford Street without having to be here. So that opens up enormous opportunities where at a fraction of the cost we can serve you.
But it's more about just that flexibility for occupiers. It's also making physical spaces available for all sorts of uses that are not necessarily traditional retailers. Social media is becoming increasingly important as part of the customer shopping experience. So working with those sorts of brands to engage IRL, onboard customers online, and complement what they're trying to do online is really powerful.
But equally, if you think about amenities. In the UK, retail banking branches are closing down in record numbers because they just don't make any sense with the rise of online banking. There is a real community value to those places for some people. Could we run a banking offer in the lunchtime slot, which is when people wanna go to the banks and not be there the rest of the time? Can you bring digital art into play? Gaming, estate agency, car showrooms? A whole spectrum of retail uses that basically haven't existed in the physical high street for all sorts of reasons previously to be used in a much more agile way in our spaces.
Is there a typical time window, like the amount of time when you are seeing bookings?
John Hoyle: It completely varies. We've had a guy take the space for an hour, turn it into a shrine to his girlfriend and propose to her. Equally, we were a Corona testing center in one of our spaces for I think 14-15 months, which is a sign of the times. We have three-month bookings. We have three-day bookings, and that's the point, different people wanna do different things at different times and that really is the core of what we do. No one needs a shop seven days a week, hardly, practically, no one needs a shop for a decade. Think about the time that you need to do activations. Let us manage the headache of all of that, learn from it from analytics, and then get out and do something different.
The old mantra in real estate about location. I suspect that still applies, right?
John Hoyle: It does, but it's a mindset rather than a reality. My belief is that footfall is a flawed metric, and that's what really underpins that location piece. The way we've done retail traditionally is that you found a location that suits you. Adjacencies are important, but you are really basing it off the demographic in the area, and then footfall, and that's a deeply inefficient model when you think about it. To make a 10-year bet on a place based on a data set that you see at that period in time, sit there for a decade, and only make money on maybe a Saturday or a Sunday. The rest of the time you have a loss-leading asset. You can't be agile and change if something about that location changes, and you're not learning anything about customers elsewhere.
So what we are saying is why not be far more granular, why not figure out which hours of the week your product works in? So Greg's, which is an incredibly successful restaurant brand essentially, it's famous for its sausage rolls, and they sold more Greggs sausage rolls last year than there were Big Macs in the UK, to put some scale on it. So their biggest selling unit is at Birmingham New Street Station and its peak time is from 10:30 on a Friday evening. It's people who've been drinking in pubs, buying sausage rolls, and are out on their way home. The other time they do a lot of business for essentially the building trades very early in the morning. So they are completely different profiles to an apparel brand, for instance. What we're saying is why don't you blend all of those different uses into more concentrated, more efficient spaces?
Is it nimble enough that you could do multiple occupants in a day?
John Hoyle: Yes, absolutely.
Have you done that?
John Hoyle: Yes. When you think about it, most shops don't open till 10:00, and most close at about six. Then you've got four, maybe five hours in the morning, which lend themselves to wellness, for instance, and then in the evening when shops sit dormant, this could be an event space, and that's pretty lucrative. In fact, in its own right. I think we could hang our entire business model on what shops would see after hours in certain locations to use this amazing digital tool, to be a private room for a restaurant or could it be a Deliveroo restaurant for instance, or could it just be a party, but rather than renting a bar and having a minimum bar spend of a few thousand pounds, you can have something bespoke, where there is amazing digital content of the person whose birthday is, for instance. Children's parties, and meetups, there are limitless ways of effectively monetizing space when in normal retail times, it's just closed.
Yeah, I've certainly heard of restaurants that are daytime cafes that have realized, okay, we have a kitchen and everything else, but we shut down at 3:00 PM, why don't we have a breakfast place in the evening? It's a Mexican place or whatever, and they're using the same kitchen, but you're sweating the asset more.
John Hoyle: Absolutely. The same principle applies here, just we've gone to extra lengths to make it more versatile. The food and beverage pieces are probably our most challenging use case because of the infrastructure that's required. You can't just have bare walls and exact screens, so that's our limit.
Although you can cater in these places, you just can't really prepare food through cooking. But yeah, given that there are fast approaching a hundred thousand empty shops in the UK alone, and that problem persists throughout developed markets, why aren't we making use of these assets better and doing it in a way that can be financially sustainable?
If you do it, what's really interesting is that there is a market for people who want to use these spaces at the right price point, and in the UK, if you have an empty shop it becomes a business rate liability, which is like property tax in the US. So an empty unit isn't just an empty unit, it's actually a liability for landlords. So what we're saying is let's bring them back into the community, let's make them accessible. Let's engage with customers in a completely different way, to the risk-free basis that has been the important use of the real estate asset furniture for so long and engages with a whole new spectrum of occupiers that just didn't exist 10 years ago.
If you have a hundred thousand empty shops, is it a risk to you with that many available spaces, the rental property becomes commoditized, the price comes down, and it becomes a challenge for you to be competitive with that?
John Hoyle: Not really, because our model is an arbitrage on whatever the rental levels are. Right now empty shops are a huge opportunity for us, and when you think about it from our customer's point of view, actually rent shop occupation costs are only about 30% of the total costs of having a shop. When you think about the cost of staffing an empty shop. To my point where if your shop is only really profitable on a Saturday, It is really painful having to staff it for the other six days of the week and a landlord will demand that you do. If you're in a shopping center, you have to be open. That is part of the deal, and you think about the inefficiencies around stock, people buy, and there are billions of pounds of stock sitting on shelves around the UK. It's absurd. Why not lend an online demand model with an IRL activation?
Yeah, create a public showroom and get fulfillment on the back end.
John Hoyle: Exactly, so we believe that we are creating the opportunity for massive efficiency across the board. It is hard to get brands to think differently. There is a huge amount of inertia around some of the big established brands who just have always done things a certain way.
It's the, “I want that unit. I want it for 10 years with a five-year break, If we get X amount of football and we price our stuff at Y, that will convert into profit.” There are lots of guys that cannot think beyond that and that's one of the challenges of being changemakers like we are is getting the 10% of early adopters to think differently about and do stuff, right?
So where did this come from, this idea?
John Hoyle: I launched it out of an accelerator called Zinc, which is all about delivering social ventures for profit. My background is in real estate. I'm a landlord, formerly at Grosvenor in Central London. So I was deeply frustrated having been on the other side of the fence about the inefficiencies and the huge numbers of occupiers who are excluded from shops.
The reason there are a hundred thousand empty shops is partly price points, but partly accessibility. All the ancillary costs around lawyers, agents, and these guys are all set up to do deals that have to be at least a year, but generally five and ideally ten. That struck me as such an enormous opportunity for disruption. That we've seen in the office space. We've seen it in the huge residential space. Huge global unicorn businesses have disrupted those sectors, but no one has done that in retail yet, and it's slightly more complex. There are the customers of your customers to think about. There's stock, there's a brand, and that's why a fit-out is necessary to facilitate all of that.
So if I'm an apparel designer who has just come out of some fashion school and I wanted to open my own, the commitment to do so would be many hundreds of thousands of pounds to do that, and through this model, I can open up on Oxford Street where we are for a day and have a popup and it's gonna cost well, what would that cost for a day?
John Hoyle: It depends. So it's demand-based pricing, so it's cheaper on a Monday than it is on a Saturday. If you can drive your own footfall, then you might as well take a low-value retail allowance. But you can on a good day get this space for probably just under a thousand pounds on Oxford Street, which yeah, no commitment, no utilities, no legacy issues. You come, do your thing, and when you work it works, you've got clear evidence of that that it is really useful as part of your entrepreneurial journey in terms of building momentum, it's great for content, et cetera, and the halo effect that we all recognize of our engagement is massive for your future on mindsets.
Are you funding this yourself or have you got financial backers?
John Hoyle: We have done four funding rounds. We are fundraising at the moment as well. This is our seed round where it's running for the next three months.
We're likely to have strategic partnerships with big asset managers who are invested and some retail groups. To date, it's been largely angels in the UK. There's a really vibrant ecosystem of angel investment in the UK because the government gives some great tax breaks called EIS.
I'm curious if when you approach people if they give you when the tilted head looks or they get it quickly?
John Hoyle: I think as with anything that's new, there is a bit of adoption. So we find that for our first booking, we insist that there is someone in our sales or customer service team present to help people because there's an element of anxiety. It's a bit like if you organize a party for your other half or family member and you're a bit nervous about the caterers and are people gonna turn up, et cetera, then the party starts and you relax. We see that a lot from our first-timers, but we're at 40% repeat customers, and so for subsequent uses, when you know where it all lies, you know what to expect, it's much less stressful for people.
It's just like your first day at the office when you don't know whether the photocopier works or what your password is, all of that becomes far less scary. So I think the answer is that onboarding involves more friction than we hope will ultimately be the case, and we are very much pushing the envelope of change. There is a bit of a learning curve, and then you see the penny drop and the opportunity. People's heads essentially explode with opportunities to do things that they could do because everyone's got an idea of how they might use a space like this more.
I'm a digital signage guy, so that's what makes me awfully curious about it. How fundamental were the digital screens to make this work?
John Hoyle: Absolutely fundamental. So there is a business that is failing at the moment that I was a customer of. They are effectively a booking system for empty shops, and they're pioneers in many ways because they've pushed the idea of flexible occupation, but they really are no different from a normal real estate agent, and the problem with just being a booking system is that you don't provide any of the services that are absolutely essential to launching a shop.
They're renting an empty cavity. You gotta figure out the rest?
John Hoyle: Yeah, and if you do that, they'll only rent for a minimum of a week. You turn up. You spend the first day setting up, and the next couple of days, no one comes in because it's Tuesday or Wednesday. Maybe you have a launch event on Thursday. A few people pick it up a bit Friday or Saturday, and then it's over. You spent probably 15,000 pounds. You've had to buy all of this deeply unsustainable, both financially and environmentally stuff in order to facilitate the fit-out, and you've got nothing really to retain from a legacy perspective With ours, the digital screens are utterly fundamental because that's your fit-out. That's what gives you the environment. You can take that content, you can reuse it on your socials, and can reuse it in other Sook spaces. You can send your stock around. But we will provide essentially the entire platform to allow your Sook to take place without you, wherever else you want.
Could you do these locations without the screens?
John Hoyle: It would remove a USP of ours, and of course, there is sometimes demand, but what we are trying to do is a hundred percent occupancy, and a big part of that is out-of-home media. So when we're not actively booked, we can be a billboard for your screen, which is a super light touch. It can operate when shops are closed throughout the night and generate revenue.
It is a really powerful, utilitarian way of squeezing revenue out of latent assets, and obviously, an empty shop's just an empty shop, and you can't do any of that.
Do you have a handle on what you're using for the displays? The screens are obvious, but, are you using a particular piece of software or…?
John Hoyle: You have to ask the AV guys. We've been through several iterations and in classic startup style we've tried lots of tools, we keep the ones that work, we discard the ones that don't and we're constantly iterating and I would describe that device upstairs, like a massive iPhone. Obviously, it's way less sophisticated than the iPhone today. But the principle is the same. Physically, it iterates just your Apple device and then the software behind it upgrades, but without you needing to change the device. So that is the process that we're constantly evolving.
When did the first Sook open?
John Hoyle: I opened one in 2019 as the sort of first MVP in Cambridge, and then we won a few prizes straight off the bat because it had such success in Cambridge.
Why Cambridge?
John Hoyle: That's where I live. I wanted to prove that there was demand, which we did, and enough so that Legal in General, the insurance company, and pension fund, gave us our first proper site in a shopping center in Cambridge, which we opened in January, 2020, but of course, we all know what happened a month later. We were pretty quiet op operationally throughout all of 2020 and quite a lot of 2021 for obvious reasons. But we emerged from the pandemic with this site on Oxford street, one on South Molton Street, and one in Edinburgh. So it was clear that we had identified a need from landlords and we've expanded.
Is it important to be on high streets like this, like really well-known ones?
John Hoyle: Yes and no. So at this stage in our business, the startup, people don't know what it is to your point, people wanna understand it and they wanna be in great places, and we have to prove that investing is a success, and then we can generate revenue. So it is really helpful being on Oxford Street as opposed to somewhere unrecognizable.
But our goal is for it to function everywhere and for it to be a platform where Nike can reach a customer in a place that is utterly undesirable from a profile perspective, but where there are still obviously many customers and we believe actually the impact in those places could be bigger, and you asked me earlier about whether the erosion of the retail market could affect us. Well, one of the things that brands will pay us for is the opportunity cost of being able to do this, which is often in less desirable retail locations with a much higher ROI for us than on Oxford Street.
I'll give you a good example. MasterCard used our space in the Metro Center, which is in the northeast of England, it's probably one of the least affluent areas in the UK. We're in big shops, bigger shops and regional shopping centers there, and they're paying us London prices in Newcastle for the opportunity to have those spaces.
My dream is that there can be a Sook on every high street and it can address all of the community goals in the same way that maybe a town hall does, as well as being a state-of-the-art retail space for brands to dip in and out to engage with those customers and create a halo effect.
Because a fashion designer can be in Newcastle and, doesn't have to come here to launch?
John Hoyle: No, it's bigger than that. Why can't they be in New York or Dubai or Beijing? Stock light, you can use physical stock, but so much of it can be digital, purchases get made online, which through using QR codes, it's not necessarily about leaving with physical stuff, but if you are a global brand on a mission to scale, what a brilliant way of dipping your toe in the water.
And because there are so many empty sites, landlords love something that is gonna delight, that's going to be good for placemaking and community and that in some instances is more important than actually a business case for the space. It's a tool for asset managers to drive footfall into assets.
You see lots of distressed real estate where somebody's put in a gift shop or a calendar shop or whatever, and they don't have a lot of money and it just looks sad and it doesn't lift the street. It takes it down.
John Hoyle: Exactly. We wanna be the opposite of that. And I really believe that constant rotation of activity is the way to bring life back. Because you could have the coolest brand in the world in your unit, I always use the fashion apparel one, but maybe there's a better example of that, but if its peak hours are only on a Saturday, the rest of the week is to all intents and purposes in an empty shop. So it isn't adding anything to those high streets.
But running up the costs.
So how many Sooks do you have now?
John Hoyle: We've got 11. We want to double it next year, and part of that is reliant on fundraising.
We're also allowing some other systems to list on our site, and we have our first overseas site agreed upon in South Africa, Johannesburg. Got opportunities in the UAE, the US, Canada, and Europe. As you would not be surprised to hear, I'm just balancing the amazing demand we have for our product with a fundraising environment that's a bit tepid, thanks to all sorts of reasons, not least in the UK because of very recent economic turmoil, which is completely self-inflicted.
Where is the business out overall, given what you just said about the economy and Covid?
John Hoyle: We doubled our sales last year on year. I'm really happy about that.
But that would be in an anomaly year.
John Hoyle: No, I think we will potentially quadruple it this year, and even if we don't add any more sites, we should double it again. The demand from global brands is through the roof. TikTok, Quikr,. Sonos, Universal Music Group, Uber, MasterCard.
So they're finding you, even though you're a startup in most respect?
John Hoyle: They're finding us so that's incredibly encouraging.
My challenge is not having today, although I expect to rectify that in February, the capital really to run at so many of these opportunities. This is a brilliant time for a disruptor to emerge. The sector is on its knees, asset managers are desperate for a solution. We have a solution. It's proven. It can get better, it can get more exciting. The fit-out you saw upstairs can evolve dramatically, and in fact, there's a very exciting space that I'll point you towards up Oxford Street, which we hope to take over quite soon, that you should go and have a look at, which is really the next generation of what Sook could be even more immersive.
Could you have a larger, almost like the department store, level place with multiple shops, like there are lots of department stores that I've shops within shops now.
John Hoyle: Yes. So we've talked to two department stores about providing that service.
My personal view is that the department store model is inherently inefficient because you go to some amazing stores that I love in New York, like SHOWFIELDS which is the new age department store, and just like every other shop it has a peak and then a massive drop when no one's in there, and that just to me, as a utilitarian, who is very focused on the revenues that real estate assets can yield, just seems a bit mad.
So the answer is yes, we could work in a department store, but we'd be in that instance much more beneficial to the department store than to us in terms of driving feet at times when they don't necessarily have customers.
If people wanna find out more about your company, where do they find you?
John Hoyle: www.sook.space. Everything is on our website. We're at Sook Spaces on social media, across all channels. Follow me on LinkedIn. I'm John Hoyle, and yeah, tell the world about Sook because it is coming to a street near you.
All right. Thank you.
Wednesday Feb 15, 2023
Ben Maher, Outernet London
Wednesday Feb 15, 2023
Wednesday Feb 15, 2023
The 16:9 PODCAST IS SPONSORED BY SCREENFEED – DIGITAL SIGNAGE CONTENT
I spent a few days in London, UK ahead of Integrated Systems Europe - in part to break up the trip and flights, but much more so to meet with several companies and see some projects that I'd only been able to see in photos and videos.
The one I particularly wanted to see was Outernet London, a very ambitious, multi-faceted development in the city's center that has, as its visual centerpiece, a huge set of wall and ceiling LED screens that are fully open to the public and positioned in such a way that they can't be missed as people flow from a main exit of the busy Tottenham Court Road Underground station.
I assumed, wrongly, that this exists primarily to run Digital Out Of Home advertising and compete with big screens like those in nearby Leicester Square and Piccadilly Circus. But there is much more to Outernet, as I learned walking and talking with the developments Chief Commercial Officer, Ben Maher.
The audio may be a bit hit and miss, as we did this on the go and in the crowds that were there even on a chilly January afternoon.
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TRANSCRIPT
Ben Maher: We have this incredibly famous set of assets on this side of the district, which is Denmark Street. So as a business, we've been a landlord on Denmark Street for over 25 years looking after the music stores and we've made, as we said, a huge number of acquisitions, meaning that we own nearly all of the property there by Parcel two or three, and we run a baker for Baker Policy. So if we lose a music store, we replace it with music because we wanna maintain it, sorry, I don’t know how familiar you're with Denmark Street, but as an asset, we wanna maintain this as one of the nice, iconic music streets in the world.
The first music store opened in 1911, Charlie Chaplin wrote the song, Smile here in 1926. The Melody Maker was founded here in 1954. The Enemy was found here. The owner of the Enemy went around the street with a ledger of all of the music that was sold, and that became the first-ever music chart, which was compiled on this street.
Elton John had his first job as a runner here, and it was the home of the labels, the writers, it was the home of the lawyers, and the management, so people would hang out here in the hope of being discovered. But importantly, talent would wanna be discovered and they'd hang out in the cafe here, this was called the Gioconda Cafe and you'll see Tim Hannaly, the home of British music. But importantly it would be people like Marc Bolan, it would be Jimmy Hendrick, and David Bowie moved and converted an ambulance onto the street and lived here. So it really was an incredible, authentic crucible for music. We’ve maintained the music stores. We put in a 55-room luxury hotel residence, so you stay in the rooms where Frankie Fraser, the Richardson, the Gangland fame, their bar, which was called the Pannaly Bar. Number six Here, out the back is the News House that Malcolm McLaren rented for the Sex Pistols. So you can now stay in that, that's the Anarchy Suite. It's complete with their original graffiti.
Did big pressure wash it down?
Ben Maher: No. For better or worse, it's there and it's good. It has a great two listings on it now, but again, in a building like this, incredible history, and Hypnosis were based here. They were the world leading album cover designers. So they created album covers for the likes of Led Zeppelin and Pink Floyd, Dark Side of the Moon was created in that room.
When you stay in the rooms, they have names. Like Hypnotized for that room, and then Kiss the Sky is the name of the room where Hendrick used to jam. This is the store where Bob Marley bought his most famous guitar, which was destined for a dustbin for a car mechanic from Essex. This is where the Stones did some of their first-ever recordings and people recorded here all the way through to the likes of the Brit Brats, Adele, and other incredible artists.
So all of this is part of the district, and as I said, we've not tried to Disney-fy this area. We've tried to preserve it. The area dates back all the way to about the 7th century when the church was created to support the Hospital. But once you build infrastructure, communities develop, so this became one of the first slums in London. It was home to 3000 residencies, and over 500 distilleries and this is where Hogarth depicted the Gin riots. So when you see things like that's where that occurred, and this is where it's depicted.
You have elements like Dickens who live down the road in Bloomsbury, wrote Oliver Twist here, and Robert Stevenson. There's incredible history to the area. That is all really important when you're creating platforms and telling stories so that you understand the context within which you exist, not just the recent history. I'll come to some of the other music venues.
So now we’re going to enter the district. Importantly, we have 30,000 square feet of offices, we have 18 retail units, we have popups. We have 13 bars and restaurants and we obviously have screen-enabled spaces. So this first space is the arcade, The Now Arcade. As you can see, it's a full-screen enabled, three-mill pixel-pitched laden environment. All are equipped with acoustic audio. So we have venue-quality audio in all our spaces.
And the audio is on the bars down below?
Ben Maher: The district as a whole, through all the spaces, is made up of 230 million pixels. It has 192 kilometers of CAT6 table enabling this and I think it is really important, we have positioned this as a canvas. We've positioned this as a storytelling platform, and that's really important to start with content first so that you can establish the context and the interest of the audience to allow you to tell better brand stories and deliver brand messages. So that has always been the ethos of what we're doing.
We don't stand with one editorial voice or polarizing thought around what we say. We try to democratize access to the platform. So we try to provide as many different interest groups and users to create for the platform because, in all honesty, screens are relatively cheap against the cost of actually feeding them, and creating environments that remain interesting all the time is the biggest challenge we have. So again, one of the things we want to do by using multi-sensory environments is to hand back some of that control to the audiences, not only to create for the platform but also to control their experiences. So although we start with audio-visual, we're on a sort of a technical journey on a path to bleed out new technologies and ensure that people can then interact and control generative experiences for themselves.
All of the spaces have cameras in them, for example, which will allow for interactivity. So you can come into this space, you might receive a standing ovation or trigger a Mexican wave. The joy of technology as it stands at the moment, and you won't hear talk of Covid. But the reality is people now understand better the reasons to be utilizing QR codes. So these screens can become a launchpad or anything: to commerce, obviously AR experiences, or anything else that we wanna leave. It makes data exchange a much cleaner and more natural sort of methodology. So really important for us to be able to control all of those elements.
As we head down, this provides a queuing function for our venue as well, we have a 1500-person capacity music venue underground, which is the largest new music venue built in central London in the 1940s. This is load in, load out, for the venue. So again, we've configured the streets so that we can have a clean, easy ecological load in, and load out so vehicles can come and jack power straight from the main rather than running their engines and things like that, which is smart.
As we come into the district now, you'll see that we have what was a very traditional maze of News Street. So this was Denmark Place, and we've got here the ability to gate and control the environment so we can create all sorts of experiences and fields and allow people to have events or dress a district in any interesting manner. So five different egress and ingress points across the district. On this side, we've got 14 more hotel rooms because the residences are based in 16 different buildings. So a really different unique point for the hotel.
Here we have what will be the Denmark Street Recording Studio which will be a pro bono recording studio, again, adding to the ecosystem that we have, bringing people and rewarding talent, just as Denmark Street always did. This is the more historical and music side of the district. This is the more modern screen-enabled place. On the rooftop here. We have an 8000-square-foot modern Chinese restaurant called Tattoo. We have another restaurant on the fourth floor, which will open later this quarter that's called Cavo. They have a rooftop garden here which is joined by a glass bridge, which leads over to the fourth-floor restaurant.
So what you'll see here is we have 2600 LEDs across the runway here. So when we create a red carpet leading to the venue, we can light it up through LED color hues so that we can control those environments.
So you've got show control, so you can orchestrate the whole thing?
Ben Maher: Brand colors, mood, you name it. We've obviously lifted up causes such as Holocaust Memorial and also for the Ukraine crisis and things like that, that's really important. We understand our environment, we understand the mood. If you think of the context of certainly out-of-home and. storytelling, smart cities, and IoT play a big part in city planning now, and our environment should be able to adjust to those needs and requirements. We shouldn't just be screaming at audiences. We should be creating dialogue and also understanding the context within which we sit.
So for example, or within GDPR, if somebody comes in, I know if they're looking for WiFi, where their SIM card originates. I know what their default language is. I don't need to invade their privacy. But I can assume when the 50th Dutch person or the 200th Canadian crosses the threshold, I might play the national anthem and change the color of the district. So that creates incredible surprise and delight.
And that would be data triggered?
Ben Maher: Completely. We can utilize a custom stack, which controls all of the programs for the district, and that proprietary technology allows us to configure different environments, to configure the different spaces, either in unison or alternatively to have them operate autonomously. And I think it's really important, our point of difference is having that versatility of space. It doesn't just do one thing. We do four core things. We can hold events in our spaces, so that could be a private or public events. We have 32s spots in our spaces, which is, essentially a standard TVC, monetization.
We can do sponsorship. BMW has been a sponsor of our art program. We've presented our wellness program in association with Panadol and importantly, this new stage is gonna be about branded content, telling stories in a slightly longer form in an audiovisual sense in the public domain, and I think it was one of the most incredible moments I've had since being here, reaffirming that we've got an environment that has that versatility and what we wanna do is bring that longer storytelling moment to the form because brands are doing things with brand advocates, with talent.
They're doing things based on purpose or the craft that they create. So we've had driving stories. We've had the launch of the Beatle's actual master Revolver album, the videos that went with that, and again, that creates a different environment. It creates a different context. We've done interactive games, so again, as I said, what you don't wanna be in any environment is a terrible magician. If you do your best trick on the first day, or second day, it's diminishing returns. You're not doing anything innovative or different.
That's a mistake made over and over again?
Ben Maher: Yeah, and I think it's also quite been quite cathartic knowing that we don’t know everything about this space because no one's ever done this anywhere in the world. So to say that we don't fully understand how the public reacts to work, we have to embrace versatility. So knowing, for example, on the left here we have popup two. On the back corner of the building, we have another popup, which is about twice the size.
These spaces are fully screen-enabled and audio enabled as you see here. If they're not being used for an event, they'll be programmed with our content so that they're relevant. TMP, for example, Take More Photos is a grassroots creative collective. They release briefs on social media and people can submit their photographs and then it curates an exhibition based on the brief. So they do one on Welcome to London. So this one's Welcome to Love in London. They'll do one for International Women's Month, or they'll do one for Black History Month. They did one for the World Cup, for example.
Now these are organizations that don't have budgets typically. So this is pro bono stuff, right?
Ben Maher: Very much, but again, it exactly comes down to what I said before, which is we want to give access to the platform. We wanna hear different voices to be representative and inclusive of our communities.
Was that part of the pitch as well to Westminster Town Council or something like that? Look, we're building, but it's going to have all sorts of community involvement?
Ben Maher: Good question. So importantly, when we were talking before, when I showed you everything in front of us, that's Westminster, the road here literally the line down the middle is Camden. So Camden has a very different approach to Westminster. They're just different borrows and it's what you expect, different councils. So we were applying to Camden for our licenses. This area historically had a number of late licenses and bar licenses for the different premises that were here previously and have historically been a musical district. So again, it's quite an entertainment-based space.
Yeah, I was gonna say they'd be in the mindset anyways for this.
Ben Maher: Importantly, they have embraced what we're doing, but they have also gone on the journey of understanding what we're doing. Because it's very new. So that is always a challenge. The building and its main purpose of it though is an interesting public space. So if we had created a new private, totally private and shut environment, I don't think we would've been received in the same manner.
If you've got a second, you might want to stop for a second only because we're gonna watch the Summer Palace and it's about two and a half minutes long and you'll want to see this, but this is a good example of our house content. Something we commissioned to play in the public domain, which allows brands to sit alongside incredible experiences, and as you can see, people naturally get their phones out to record.
I'll tell you the story about how it began. So we ran a camp home for Italian Airways before Christmas, they were one of the first brands to use the space for a commercial message, and they made us nervous. We didn't know what was gonna come cause no one had we've got best practice guides. We've got creative specs, and they created an experience where planes fly over the head of amazing landmarks in Italy and people applauded. For somebody who's worked for 25 years in advertising, yeah, that's an incredible thing to be able to say, quite a lovely experience.
But this was part of the commission that we did or RFP that we did for people to create for the space, and it's an ethereal journey through space-time. But interesting it uses the ceiling as the main communication plan.
I'm a big fan of these kinds of environments where you look at it and there will be any number of people here who will assume that that's real.
Ben Maher: Oh yeah, and the joy is we’re using a 3mm pixel pitch so you can create that depth of illusion. The total resolution size here is about 6k, so it's not without its challenges, and we have found it unforgiving for things like raw photo footage because it's just so unforgiving on talent so then we can use templating and things like that to accommodate lower resolution assets, but still have them looking credible in the space.
The use of negative space. So not always trying to fill every pixel is also incredibly powerful, so we're trying to utilize that as well. For this, I used to present this in VR, so people are presenting on teams and zoom in VR during the lockdown, trying to explain what we're doing because it's one. It’s one thing explaining a new ad format, but it’s a different thing explaining a new environment altogether.
Yeah, I'm somebody who's been around this medium, if you wanna call it the technology for 20+ years now and not seen something like this before, particularly the way it's stitched together with everything else, quite honestly, not just, here's this big screen. Be excited!
Ben Maher: Yes, and I think we have to create, as I said, multipurpose and interesting use environments because cities deserve them. You've got, as I said, as many on the weekends as 350,000 people coming through this area and it is becoming an attraction. You, we have six to eight hours of free art programming in this building on a Sunday.
And people email and go, can I see this? When is this happening? And that I think is a good testament to doing things the right way. It's new. We are learning. When we first opened the now trending space, which is the smallest of the spaces, that silver Line proved an incredibly challenging threshold for some people. Because it was like an anthropological experiment. They didn't know whether they could step in. They didn't know what the transaction was. Because they'd never seen a free public entertainment space like that, and as you'd expect children and people who'd had a drink were the first ones to cross the threshold.
But then interestingly put seating in there and people act completely differently. So the psychology of the spaces is also important. Another thing that may be of interest is that this hero screen here on the south wall and the east wall here is permanent deployments, as you can see the slight lines between the wall here, these screens on the north and west are on rails and they can completely retract ah, and the building can open up. So it's one of the first buildings in the world with kinetic staging built in.
You do have doors too, so you can close the area off for private events?
Ben Maher: You can see better with the white there. You can see the slacks between how they work. So we'll be bringing new appointments to view to city centers where you'll come with a real-time of day to actually see something happen. You can see, in fact, these ones are usually completely closed and they've been open today for windows. The small area here can operate as a retail unit. It's been a trainer store for Puma. It was a classroom for Mercedes F1 MG with Toto Wolff. It was a studio for the photographer ranking. It was a red carpet zone for Sky. It's been a party for Apple, and NBCU. So again, having addressable spaces that can do a lot, this pixel pitch at 3mm is akin to what they use in the Unreal Engine SFX studios. So that's essentially the backdrop that they shoot. White, shiny floor shows content. The resolution there, as I say, is 3mm-5mm pitch on the outside here because up higher which is still the highest resolution out of in Europe currently certainly at that scale.
Yeah, I've heard a few 6mm in New York, but not 5mm.
Ben Maher: So we're really pleased with it. But at that resolution, it's interesting. We do need higher-quality content. Because of that pitch, it can be unforgiving. You'll see Netflix is doing an incredible job. They're a very frequent client of ours, but the animation on here will always look incredible cause it obviously scales infinitely almost. But they produce beautiful output and the resolution is incredible.
That space, is it also leasable for if BMW wanted to launch a new electric vehicle or something, you could block off this?
Ben Maher: Absolutely. So we held the launch of the new FIFA 23 there and did the FIFA Women's Summit. We've done live boxing with DAZN and Matchroom, so we've held boxing there. We've done events for UNICEF. We've done events for Mothers of Gucci, which is a Gala event. So yeah, we can do private things, but the best way we like the district is having the public in because the more spaces that you privatize, the less inviting the world is, and we want people to come in, experience things free, be entertained, and create moments that ultimately they wanna share and create a destination In the cities we're in.
What would you do if there was a big England football match and I remember Lester Square got kinda destroyed, would you just close this off?
Ben Maher: So we face the challenges that any public destination would face, and we have to manage the environment. So we do risk assessments on anything. We have a really good security team and we do all of the listening and monitoring of those feeds to know what's happening.
We get advice from our partners like TFL, which are local. We've got Camden, and then we liaise with the greater London authorities and also the Emergency response services. So we got a good understanding of what's happening. But yes, we'll make a call based on what's going on to decide how we manage the district because we wanna keep people safe.
How many people work on this, setting aside security and all that, working with the canvas, and everything else?
Ben Maher: So the Outernet team as a whole is around 80 people. So that'll divide up between everything from the scheduling to the sales teams to the data and center people, creative teams, et cetera.
When did it open?
Ben Maher: Officially, the arcade and the trending spaces opened around late August, and what they’re now building came online from midday each day in November. So it's not been open for long, we're still very much in our infancy but it's nice as I said, to see the behavior of the public and have been here just over four years, to see it come to fruition is very rewarding.
Did it go through a lot of revisions?
Ben Maher: Yes, in terms of what you were good at? I think there were about 11 years of planning before I was even anywhere near this, and then once the planning is in place, you have to then reinterpret it as an experience as a platform, both for how stories are told, how stories are configured, how content is rendered out, how content is served and then how it can be taken to market for brands, storytellers, creators, you name it. So yes, a lot of revisions, and we're still revising.
There's a number of businesses, operating hotels, everything else. Is this element of it or its own business unit with its own P&L?
Ben Maher: Outernet is a media business, and we control the screen-enabled spaces that you see above ground here.
I'm gonna assume that you're not plugged into programmatic or anything like that because it's a very distinct kinda canvas.
Ben Maher: That is correct. We're not plugged into programmatic. It's not to say that we would never do it, but the reality is the way that the content needs to be served today, it is very unique. As I said, it's a proprietary stack. It uses lots of familiar techs but it's more programmed like a channel like a traditional broadcast channel as opposed to a media. There's a little bit of rendering that's required, let's just say.
I assume you know who was the LED supplier?
Ben Maher: The screens are from AOTO. We went and did an analysis globally of the best screen providers and for what we needed AOTO had a great product, and this is certainly the biggest one of the first in, certainly the biggest deployment that they've done of this product.
We're running one triple GPS and are now building a load. We did go as far as doing a sort of quality assessment. We visited factories. We even went as far as looking at where raw materials were mined, because of the importance of having single-batch silicon on a canvas of this scale to ensure that you didn't get that different, particularly obviously on the reds within this car, within this canvas was really important. Another important thing about the LEDs, we degrade panels at the same pace that they are running, so that if we need to replace them, we're replacing them either from our own environments or right into the environment. So again, they're in the same life stage of the panels to ensure high quality.
You have a pretty big spares pool, I would imagine?
Ben Maher: We try our best, it's a revolving. If you look at this, this is a drone shoot done by one of the Wrigley Scott Associate directors that we met, and he shot it on an Icelandic beach and it is a music video. But if you look at how some of the B rolls so creating doesn't need all new assets, it can come from existing architecture.
The supplier of this kind of creativity told you, here's what we would like you to do with it, or do they give you a license to say, look we'd like to do an edit, this is how it's gonna look?
Ben Maher: It depends on the creator, and it depends on where they are with them. If they're shooting for us, then we'd say, this is the brand kit and this is what you need to produce and this is how you need to play it out. We're always updating our learnings. We get new challenges and new opportunities and we learn from those. But as we see these mega canvases across the world. These sorts of fantastic pieces become more relevant because they'll play out across networks. Across other major cities. I think one of the questions you posed was, is London a model for elsewhere?
It is, and we're in discussions in New York, LA, the Middle East, and Asia, at launching these networks and then sharing experiences, interestingly, might always be this exact look and feel. This was put together over 26 years across a horizontal plane. If you go to Manhattan, you're probably gonna have to use a vertical plane, and so it becomes a completely different onboarding process and journey. So it's gonna be interesting how we take our learnings and then we utilize those in other environments.
If you're gonna take this to other locations, does it have to be multifaceted in the same way, and that there's a retail component, there's a hospitality component, there's a restaurant component?
Ben Maher: Every case is different. So if you look at environments creating a campus or a district in other cities, particularly New York, or more challenging real estate payment tables or even the planning commissions. So we have to look at them in each case often partnering with other established institutions is wise.
We're lucky enough to have a huge foot here. In places like Manhattan, you have those big footfalls. In the other cities, you don't necessarily have this natural footfall. So you have to create a different style of destination or with another key destination to ensure the right sort of, so yeah each case on its own and understanding the needs and nuances of those cities and audiences as well.
Yeah, because there are a lot of immersive attractions popping up now. They're almost all projection, but they're very much ticketed locations and it's programmed and it starts at this time and you're there for 45 minutes and exit through the gift shop.
Ben Maher: We're very happy to have you exit through the gift shop here as well.
And don't get me wrong, there is some incredible projection technology out there. We've looked at it in our venues and in other places. We have other locations with theaters and other things and, we would certainly consider projection there, but for the kinda canvas and certainly some of the gaming engines and things and future-proofing, we wanted to do this pixel pitch to create a very unique and beautiful canvas that to be fair, I don't think we could have achieved in the same way with projection.
Yeah, it's very interesting. I've written about it and but it's so much more interesting to see it in person, but I think more than anything else, to kinda understand the macro idea as opposed to, oh look, a very big set of screens.
Ben Maher: What are these guys doing?
Why did they do that?
Ben Maher: Which again, isn't a difficult question always, and I think just seeing the way the public interacts with it has been enough of a validation that cities deserve these interesting cultural spaces and they deserve to be free and in the public domain.
We're early in our journey. We need more brands coming and telling their stories as well, but telling them in a way that will ingratiate themselves to the public and, out-of-home has done an incredible job at providing public utility forever, in major cities. If we can this model out, certainly for multisensory spaces delivering that as well, I think it sets a good precedent for other cities and other developers across world.
Are you affected at all by energy conservation requirements or requests?
Ben Maher: Yes, of course.
We are obviously subject to the rising costs of energy as anyone naturally would be, but we have developed the most energy-efficient product that was available on the market. So the sort of coolness and the control of the environment, importantly, isn't prohibitive to doing this. We're not creating a huge carbon footprint that we cannot manage. We have all the relevant ESG scorecards. We're working with the ISO qualifications for energy and for our social corporate responsibilities.
But it's also this sort of magnet or those people who are concerned about all the voice energy on these things, do they really need them versus other stuff that's drawing way more energy, but it's not anything you think about?
Ben Maher: I think the fact that we're providing a storytelling platform and we're not just screaming at people in the public domain. We're supporting arts and culture everywhere. We have a charitable foundation that donates time, and money for different projects. So we've done projects around sustainability with Unger. We're doing things around social mobility. We've done things for AIDS charities, so we work with lots of different interest groups to provide them with platforms. We even audit the popups so that when we're looking at the brands we're working with, we're not just working with the same generic brands that you get on every high street in the world, right?
We wanna ensure that these spaces are different and unique. So whether it's non-white owned businesses, whether it's LGBTQ+ owned business, female-owned, sustainable business, so again, being a conscious member of society, we don't just wanna be a bastian for people who want a big ass billboard.
So I think we've gone around things in a very different way. There is some incredible landmark out home structures in the UK and across Europe. But I do think we have good USPs and we do complement what is already in the market but with enough points of difference, yeah. We wanna attract people to this space and not cannibalize out-of-home budgets by sticking the same offering up. So if we can get more AV budget and that encourages people to do better and more in out-of-home, then that's a fantastic thing.
That's very impressive. Obviously, people like it.
Ben Maher: We're getting there. There's a piece called Heaven's Gate that is the new art exhibition and it is on Sunday and it was absolutely crackers in here, it was just crazy to see how people enjoyed it and it just says conceiving something and then seeing it come to fruition is such a unique and pleasurable thing to be able to do. So we're very proud of what we've done here.
Tuesday Jan 10, 2023
Jannatul Choudhury, PosterBooking
Tuesday Jan 10, 2023
Tuesday Jan 10, 2023
The 16:9 PODCAST IS SPONSORED BY SCREENFEED – DIGITAL SIGNAGE CONTENT
Jannatul Choudhury found his way into the digital signage software business out of frustration - writing his own cloud-based platform because the one he was under contract to use and maintain gave him endless headaches.
The Manchester, UK software developer wrote the code and is now growing out the functionality and installed footprint of what he and a business partner then launched as PosterBooking, a SaaS digital signage CMS aimed at the small to medium business market.
The goal was produce something that was easy to use, and met marketplace needs. One of those big needs was minimal cost - which steered Choudhury to offering a freemium model. Offering the base platform for free to end-users also allowed him to spin up PosterBooking more quickly, because that eliminated a big chunk of work needed to develop a payment gateway.
I had a good chat with Choudhury about his boot-strapped start-up, his love of coding, and how his business operates when the code product is free.
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TRANSCRIPT
Jannatul, thank you for joining me. Can you give me the background on what PosterBooking is all about? What would be your elevator pitch if I asked you that?
Jannatul Choudhury: Yeah, sure. Thank you for having me on your podcast. I love what you're doing for the digital signage industry. It’s phenomenal, without a doubt. I think I started following you about a year ago on LinkedIn. I was thinking to myself, I'd love to be on your podcast in the near future so thank you for making that happen.
A little background on what PosterBooking is: PosterBooking is a free cloud-based SaaS platform for digital signage. We make it really easy to display images, videos, webpages, and other content on any device like tablets, TVs, LED screens,s and so on from your computer or your smartphone. The platform can be white labeled and is available in seven different languages.
So how did we start PosterBooking? Me and my co-founder, Monsur, we've known each other for quite a long time now, we've had various startups along the way. We were managing some screens for the NHS in the south of England and we were using an existing digital signage platform and every now and then, we used to have some issues and we'd have to travel down there. It was like a six-hour round trip just to make some changes or if the screen was down, we didn't have any playback on what was actually happening. We'd have to go down there with our laptop, keyboard, and mouse just because it was like a Windows machine. And from that we thought, yeah, let's look at alternatives. See what's there, are there any cost-effective solutions? And it has to work on mobile. So we were looking through a handful of them and we couldn't find exactly what we were looking for, like we were looking for a solution that could either be free for a couple of screens so that we didn't have to exactly pay, we don't mind paying for add-ons, et cetera, if it benefits us, and is something that's solely usable on mobile.
Obviously at the time, I don't think that there were many platforms out there that provided that so we thought like, how hard could this be? I've got a tech background, so I thought why not give you a crack? And that's how PosterBooking started.
So you're a coder, right?
Jannatul Choudhury: Yeah. I graduated in 2016 with a software software engineering degree. So I've got quite a bit of a background in tech, especially SaaS as well.
And you're based in the Manchester area?
Jannatul Choudhury: Yeah, that's correct. Manchester, England.
When you were servicing this NHS install any of coming to grips with this not being the solution that you needed, I'm curious if you canvased the marketplace and looked at the options out there because there's a whole bunch of “easy to use, affordable” all those kinds of terms CMS software options out there.
Did you half pause when you're thinking, okay, I could write something, but there seems to be a lot of this out there already, or you thought you could do something different?
Jannatul Choudhury: That’s a great question.
So we did have a look at a number of digital signage companies as a consumer and during that research, before forming PosterBooking, we thought, yeah, there's certainly a gap in the market, and with obviously my background and our idea of what we actually wanted to do. I'll probably get into that shortly. The name PosterBooking comes from do you know how you can book posters? So the idea was to essentially build a platform that allows customers to advertise on different screens. So it basically gives the power to customers to open up their screens to other advertisers and generate revenue through that.
So we did quite a bit of research and we found nothing that's completely free and that helps with our end goal. So we just thought, yeah let's build this platform and see where it goes, and quite frankly, it took off really quickly. To begin with, during Covid, we launched during Covid, it was a bit slow, but that actually helped us with servicing a couple of users and building at the same time.
I'm curious about a post on LinkedIn that you put up, maybe where I first came across the company name, you talked about the five things that you've learned along the way in this journey of building up your company and I thought I'd run through those and ask you about them.
The first thing you said is, “building a startup isn't easy, know when to ask for help.” Where did that help come from and what kind of help did you have?
Jannatul Choudhury: So I've been in a lot of companies before starting PosterBooking. So I've been in SaaS, healthcare, e-commerce and legal tech as well. So I know a lot of people, say my managers and CEOs, et cetera. So anytime I had issues, I'd go to them even with coding issues or I recently spoke to one of the CEOs at my first place and he actually gave me some advice on how to go to market, et cetera. So that really helped.
And I've got quite a few advisors as well that have been in the industry and any questions I don't hesitate to ask. I've even spoken to CEOs in our current industry, like I've spoken to MarkScreenCloud so that was pretty good. I don't shy away. If I need something, obviously, it's definitely good to ask, right?
Your second point was, “Perfection doesn't exist, so release the product as soon as possible.” I guess you can do that sort of thing with SaaS, right?
Jannatul Choudhury: Yeah, definitely. To begin with, we probably launched within a couple of months and I was working at the time as well, so I had a full-time job and during the evenings, I would literally code all night or evening. We launched within a couple of months, so we had our first end-to-end solution which literally allowed customers to create their screens, upload their images, and we had our web player, so it was literally the web player and it was wrapped on the app, so like a web frame and that was literally it.
And that allowed us to get into the market straightaway. We didn't have any payment gateways which was probably a big chunk of development time as well that we saved simply because the software was free at the time.
So then you could just layer on functionality and things like payment gateways and so on as the need developed?
Jannatul Choudhury: Absolutely, that's correct.
You said, “Build a community and allow that community to make suggestions.” When you describe a community, what do you mean by that and what did they guide you?
Jannatul Choudhury: So with PosterBooking, we've got a community group on WhatsApp and that's got over 200 businesses worldwide and every so often we'll send them a message, it's like a community group where all the businesses in that group communicate with each other. If they have any issues they'll put it on the group and either we'll reply back to them, or if someone else gets there quicker, like another business, they'll reply. So it's very much like a close-knit family.
So say there was recently a couple of businesses that wanted a certain feature and we obviously looked at how that goes with PosterBooking, if it's beneficial, and then we actually released it. T]here's a number of features actually, say two factor auth or multi-user or even little tweaks to allow them to miss a few steps from the content management page, upload images directly onto their playlist from there. So these little things, the community is absolutely huge, right? We're pretty close to them and our online chat as well. We have an email system as well, but when someone messages us on the website, on chat, they'll come directly to us so we're pretty hands on in every aspect of it. I think that really helps a lot.
Is that community culture unique to what you're doing here, or is that pretty common in that if you're running a SaaS platform, it's the one of the things that you do?
Jannatul Choudhury: To be fair, I've not found that to be a common thing, but it does really help our business staff, especially when you're a startup. You have that communication with the businesses. They feel like they're part of the business, giving ideas and updates, like sending images through how they're doing, just a sense of community,
I guess it's important for you and whoever's doing your development. It just gets you a lot closer to them.
Jannatul Choudhury: Definitely and in terms of development, I'm the only one that's doing development on the CMS.
So whatever people will tell you, it's useful?
Jannatul Choudhury: Yes, definitely. And so sometimes it's really important, like some updates, or even if you make a release ,they'll point it out to the group if there's any bugs or anything and I'll get there and fix it straight away.
Your fourth point was, “Use a freemium model with premium upgrades.” I assume that the upgrades are how you actually make money because you can't make money out of free too easily. Do you need a lot of scale to work at your licensing costs and any costs?
Jannatul Choudhury: Yeah, I'd say most of our customers are SMBs so say 90% and most of them will have like under 10 screens as well. So it's not the focus for us right now. It's not all about making a lot of money because we have very low overheads since it's like just a couple of people. And I'm developing it, so we don't have any development costs to begin with. But with our pro services that we've recently brought out it's literally keeping the lights on as well, with our service and bandwidth usage, et cetera. It really helps with that. Moving forward we will probably release more pro services and see how it goes.
Do you have any sense of what percentage of your user base is opting into paid services?
Jannatul Choudhury: I couldn't really tell that off the bat, but we are somewhat cash flow positive, but obviously we put all that back into the business. I'd say about 10% are on pro services because we have a bunch of white labeled users, some people want reports, some people want to see if their screens are down so we have downtime alerts via email. We also have large uploads. So obviously being a free platform, we need to try and make some money somehow so we offer large uploads, 4K uploads, et cetera. And it does help and we've seen a massive usage on larger uploads and 4k.
So freemium is something that's been around for 20 years or so and not necessarily in digital signage, but just broadly in web-based software. Is that a challenge or does it help that the marketplace assumes that like with Gmail and products like that, that you can get a pretty good service for free and that therefore, particularly for smaller SMB customers, that's an expectation?
Jannatul Choudhury: So I've worked in SaaS before, right? And we had a premium model as well, and it did really help. And with us, we've seen tremendous growth. Just like some businesses, they won't even consider using digital signage and for us to have 10 free screens, it just allows them to put their foot in the door, right? And customers are really happy. There were a handful of customers that genuinely didn't believe our pricing for the free tier which was not shocking to be fair.
I think we've all downloaded apps and signed into services only to discover that the download is free, but to use it costs money.
Jannatul Choudhury: Yeah, they’ll have purchases.
Your final point was, “Most importantly, believe in yourself!”
What do you mean by that? Is it just simply that to put in the extra hours in the evening and everything to do this, you've gotta have a lot of belief in this?
Jannatul Choudhury: Yeah, for sure. Like with me, I love coding, right? And it's probably like my only hobby right now. And if you ask my wife, she'd probably say I'm glued to the laptop. But it's similar to how people play video games. I just love coding and it's just something that makes me happy. So it's a difficult journey, probably not for everyone, but it does bear fruit.
Have you identified particular vertical markets? I know you said SMB, but does it tend to be pubs, restaurants, clubs, churches, schools, or all those things?
Jannatul Choudhury: Yeah, we're pretty much open to everyone really. But our biggest vertical would be say QSR franchises, we've got a couple of hotel chains, zoos, bowling alleys, really just institutions and even non-profits are signing on really fast.
Your focus mainly on the Amazon Fire Stick lineup of products. What's been the experience with those units?
Jannatul Choudhury: Initially we had a device that we were selling for about a hundred dollars. But we thought in order for customers to really get the screens up and running without any issues, we need something that's affordable and easy to access. So the Amazon Fire Stick was probably the only one at that price point that they could. So we focused on creating an app for that. We're also Android as well so that really helped to get it off the ground.
So is the Firestick attractive, obviously because of price points, but also because it's familiar, there's a huge distribution network to get one, like you can get one the next day if you really needed that quickly. Was that a big sort of determining factor?
Jannatul Choudhury: Yeah, definitely. We have been looking into other solutions. Some Android boxes or even Raspberry PI, but they're not exactly easy to get a hold of. So, we really focused on Fire sticks.
Yeah, you get into those lesser known Android products coming from Shenzhen and so on, and the build can change from shipment to shipment.
Jannatul Choudhury: That's what we found with our own made device.
Should end users be nervous at all about deploying a consumer product for a commercial job with those Fire sticks?
if you talk to digital signage veterans, they talk about having high reliable industrial grade very durable devices to put out in the field for QSR and so on, versus consumer devices that are not meant to be running 24/7. People use them for six hours in the evening or whatever the case may be, and therefore they're not appropriate for a commercial job.
Jannatul Choudhury: Yeah. I understand what you mean. So I've not seen a major problem with that, mainly because our predominant market is the QSR.
So we've got a client with about 400 screens and it's a restaurant franchise, and they use Fire sticks and it's pretty much plugin and go really but obviously in the future we do realize that we do need more robust hardware. We're looking into integrating with BrightSign and Chrome OS in the future, which will really help with the enterprise clients.
I'm curious if the folks who are in the Amazon hardware team that develop Fire sticks, the whole product line, are they aware of commercial uses of their product? And do you ever keep in touch with them about software releases and things?
Jannatul Choudhury: Every time you make a release on the app, I think compared to Google, they've got a more rigorous testing. So they'll test literally everything on your CMS, on the app, how you communicate, they'll make accounts, so they do have a very good idea on what's going on. And if anything goes wrong, they just straight away fail the app. They won't really release it up for you.
Oh, okay. So you're on some sort of an App store and that's how distribution's done?
Jannatul Choudhury: Yes. So you don't need to sideload the app. You can just download it straight away from the Amazon store.
And they do all the vetting there and do their best to break it before they approve it?
Jannatul Choudhury: Yeah, for sure.
What do you see evolving in this space? Web services have changed a lot even in the last 3-4 years. Are there things emerging that are gonna make your life easier or open up new possibilities?
Jannatul Choudhury: We were looking into using sensors for more information on customers. So say we use sensors to identify how many users are in your store, something like that, and in the future we're looking at more enterprise level features, so say integrating with more apps, giving two factor authentication with their accounts, et cetera.
But that's all stuff that you as the only developer at the moment would have to do, right?
Jannatul Choudhury: Yeah. That's very much true. But 2023 is very exciting. We'll be looking at hiring people.
It’s the two of you right now, right?
Jannatul Choudhury: That's correct. So we've got me and my co-founder, and we've also got two freelancers that are working on the app side of things.
By the sounds of it, it's all bootstrapped right now, right?
Jannatul Choudhury: That's correct. We're pre-capital, privately-funded and have not had any investment as of yet.
Is that something you anticipate doing or is your a great preference to just do this on your own and see where it goes?
Jannatul Choudhury: No, for sure. If the right investment comes, then we'll definitely look into it.
All right. This was great. The one other curious question I have and it's completely out of left field, is are you a City or a United guy, or are you supporting another team?
Jannatul Choudhury: United, for sure.
I saw you went to the University of Salford, so I was curious if you supported Salford.
Jannatul Choudhury: No, Salford is in a lower league at the moment.
Yeah. That's the one with some of the former Manchester United players, right?
Jannatul Choudhury: That's correct.
All right. For those people who are listening and wondering why we're talking about football, my apologies, but I was curious.
I appreciate your time. That was quite interesting.
Jannatul Choudhury: Thank you, Dave. Thank you for taking the time and I look forward to speaking with you in the future at some point.