The Metropolitan Transportation Authority (MTA) this week announced that it has awarded OUTFRONT Media the right to advertise in subways, buses and commuter railroads, including concessions for traditional and digital advertising throughout the entire MTA network – news of course that we broke EXCLUSIVELY last weekend! [1]
The award of this new 10 year contract (with a five year renewal option) follows an extensive request for proposal process. OUTFRONT will be responsible for the installation, operation, and maintenance of a new network of digital screens that will provide enhanced customer information at stations and on trains, as well as new opportunities for revenue generating advertising. The capital cost of such network, estimated to exceed $800 million over the 15-year term, will be borne by OUTFRONT and recovered from advertising revenues.
Joseph Lhota, Chairman of the MTA told us “This contract represents an entirely new approach for the MTA, offering dramatically improved customer communications, and an upside potential for more advertising revenues,” commented “OUTFRONT Media’s commitment to installing digital screens in stations and on rolling stock will provide us with new ways of generating advertising revenue, while at the same time giving us a new platform to quickly and effectively get relevant information to our customers.”
Jeremy Male, Chairman and Chief Executive Officer of OUTFRONT Media said “Through our continued partnership with the MTA, OUTFRONT Media will transform the commuter experience by deploying our visionary media network across the New York Market,” said J“We are excited to be embarking on this next phase in this great relationship.”
The award calls for OUTFRONT to create an extensive network of 14,000 digital screens that provide both advertising and customer communications to be placed in stations and on platforms, replacing paper advertisements, and over 35,000 additional screens to be installed on a combination of Metro-North, Long Island Rail Road and New York City Transit train cars. The screens will be purchased by OUTFRONT. Traditional static advertising will be significantly reduced as the new digital advertising screens are deployed.
This new digital network will serve as an additional platform for revenue-generating advertising, while at the same time giving the MTA additional ways to communicate real time next train/bus, track information, service status, and planned service changes to customers through individually-addressable screens. OUTFRONT is obligated to install over 17,000 screens by the end of 2019 and over 80% of the screens by 2022, and has committed to accelerate the overall installation schedule where feasible.
The digital advertising screens will provide new flexibility to advertisers seeking to reach MTA customers, enabling them to mount customize advertising campaigns, including hyper-local advertising, as well as to leverage the dynamic time-of-day and the multiple message nature of digital. In terms of customer messaging on service issues, the new digital screens will enable the MTA to send the right customer message to the right locations in real time, including train arrival information and service changes.
- Over 9,500 screens will be installed in New York City Transit (NYCT) subway stations. Over 2,000 of those screens will be dedicated “Customer Information Center” screens installed in public areas of stations, as well as on platforms. Digital Urban Panel advertising screens will be featured on top of nearly 800 station entrances, while 5,960 other advertising screens will replace many of the traditional advertising panels in stations. NYCT will have the right to use 20% of the space or time on all of the advertising screens for customer information, such as train arrivals, service changes and emergency announcements. The digital screen installations will be coordinated with on-going modernization efforts such as the Enhanced Stations Initiative (ESI), which recently saw its first station go live at 53rd St, and support directives from the Chairman’s Subway Action Plan. OUTFRONT will also install 31,000 screens across 5,134 subway cars.
- Long Island Rail Road (LIRR) stations will receive over 2,700 new screens, including replacement of over 450 existing customer information screens at Penn Station, Atlantic Terminal and Jamaica and over 1,300 customer information screens at outlying stations. An additional 950 new station screens will display a mix of advertising and customer communication content. The digital screen installations will be coordinated with LIRR’s Enhanced Station roll-out. Over 3,300 screens will be installed on 836 train cars, with 20% of the screen space dedicated for customer information.
- At New York stations, including Grand Central Terminal, over 1,200 digital screens will be installed in support of Metro-North’s Customer Service Initiative providing real time information to customers. OUTFRONT will also install at least an additional 350 advertising screens and over 2,900 screens on 733 train cars, with 20% of the screen time or space dedicated for customer information. Billboards
OUTFRONT was also awarded a separate contract to manage the advertising on the billboards that are located on MTA property, pursuant to a separate competitive process and for a term of seven years. There are currently 530 such billboards, of which 215 are Agency-owned and the remainder are owned by third parties.