Thanks. I did not realize that IdeaCast’s Jason Brown was based in NYC. Thanks for the correction. Also thanks for pointing out that Jason Brown at one time also ran sales for Screenvision. This information about Jason Brown helps explain, even more, why National CineMedia (NCM) felt comfortable in making this connection with Danoo and seeing Jason Brown elevated to lead sales at both IdeaCast and Danoo.

In reviewing some of the transcripts of NCM’s recent quarterly analyst briefings, it was interesting to see the attention paid to the question of who will acquire Screenvision. According to these transcripts, NCM is hopeful that, after Screenvision is picked up by a new owner, NCM will be able to negotiate some sort of cross-selling agreement with that new owner of Screenvision. Again, this Danoo/IdeaCast connection to Jason Brown dovetails with this notion.

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I agree that, for NCM, the audience at Gas Station, TV, for example, might mesh better — in terms of short-term advertising sales — with cinema than Danoo’s audience. However, I get the impression that NCM is thinking more long term about this question.

Why do I say that? Well, in the interview July 6th with Kathy Bachman of Mediaweek cited in my article, NCM’s Kurt Hall says “Cinema is ahead in the Digital OOH space, but clearly two to four years down the road, we’ll be looking to add growth. We see this [NCM’s interest in merged Danoo/IdeaCast enterprise] as an incubation platform for NCM.”

So, as an ‘incubation platform’ and with a 2-4 year time frame, that gives this new relationship between NCM and Danoo time to mature. During that time, it would seem that Jason Brown could play a key role in helping these organizations work together and “build synergies,” to use the corporate cliche.

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As with many of these kinds of VC-led deals, it seems likely that Danoo’s current CEO, the Kleiner Perkins partner Aileen Lee, will probably return to Kleiner Perkins in the coming months. So, if that’s the case, then clearly the success of the Danoo/NCM partnership could be greatly enhanced if the Danoo board (which will now include a least one representatives of NCM) recruits a strong new CEO to replace Lee.

As you said, “Anyone investing real money and leadership right now is a good thing for all of us.” I agree.

I’m more of the wait and see viewpoint. When Thomson bought PRN, the thought was to leverage Screenvision to synergize the ad sales. The two platforms and audiences were so different that it was a lot tougher than planned – and pretty much fell apart. Jason Brown actually ran sales for Screenvision, and he will know the score.

Danoo targets what they call captive audiences. But not really so. Their screens are quite easy to avoid in most of their coffee shop venues. And many do as I noticed in one of their locations in SF last week. That has led to their poor advertising track record I think more than coverage. Gas Station, Elevator, CHeckstand all equate far more to in-theater than does Danoo.

But anyone investing real money and leadership right now is a good thing for all of us.

Thanks for your note. I really do feel that this Danoo-IdeaCast-National CineMedia deal is a major development for the industry in the USA and Canada. As for how it will play in other parts of the world, I would not speculate, and did not speculate in my piece which Adrian Cotterill was nice enough to publish.

Since my piece was posted yesterday (Sunday, 12 July), here is what some of the skeptics of this analysis are saying:

1) They say that Danoo’s content model is weak, and that it has not been successful at selling advertising, and

2) They say that National CineMedia (NCM) is not representative of the Digital OOH industry because of its focus so far on cinema advertising.

To answer these folks:

1)
* To be honest, I have not seen any of Danoo’s content. I live in Cincinnati, Ohio, and their network is not visible anywhere near here. What impresses me about Danoo’s content is the production model for it (i.e., utilizing lower-cost talent in Asia to produce some of that content, recruiting content from contributors in an organizing fashion, and having a real plan and workflow to localize the content.

* As for Danoo’s ability to sell advertising: I would expect that any new, VC-funded network (it started in 2005) that is based in San Francisco (not a big center for media sales) that has not reached scale yet would be challenged in selling advertising. That stands to reason.
However, the beauty of this deal is that the ad sales for both Danoo and IdeaCast will now be managed by the former ad-sales manager of IdeaCast (based in Chicago, which is a traditional center of ad-sales talent). Also, with NCM people now sitting on the Danoo board, it’s clear that NCM’s sales staff will soon be trained re: the Danoo offering and start to sell it. Of course, sales by the NCM sales staff will not skyrocket immediately. But, these folks are now selling advertising at the rate of $US 200 million–plus per year. So, they obviously do know something about building a new digital media network and selling advertising on it.

2)
NCM is a success story. They revolutionized cinema advertising in the USA using digital technology to do it. For folks outside the USA, I feel a need to point out that cinema advertising here was very undeveloped and weak, as compared to other countries, before NCM (actually, Regal CineMedia, the root of NCM) grabbed digital-cinema technology in 2002 and started taking cinema advertising to the next level.

Now NCM is saying that they want to develop a new advertising revenue stream, to be realized fully in 2-4 years, from the wider Digital OOH sector outside of cinema. That impresses me, because they are so good at what they do and because I’m sure that many different advertising-based Digital OOH network have tried to court them.

But, I have to point out, who won that courtship? Danoo — with all of its process innovation and commitment to interactivity and localization — won it.

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Now, you may ask, what comes next? I don’t know. But, I think that this merger sets the new Danoo/IdeaCast organization and NCM off on a good course. From here, they will decide when and if to make the mid-course corrections that they need to make in order to be successful.

My hunch is Danoo and NCM will provide, on balance, some useful leadership to the industry in the USA (again, outside the USA and Canada, I would not speculate). And, the way I see it, that’s good for all of us.

Bill Collins
http://www.decisionpointmedia.com

You have captured the internal and external dynamics at the heart of Danoo’s acquisition of Ideacast. This analysis is both thorough and engaging. Not only have you cited the significant reach and experience of National Cinemedia and how the company can support a network’s development, you have articulated the reasons why Danoo is positioned for long-term growth and success. I am in complete agreement of your view toward what this deal means for the whole of the digital out-of-home media industry.

In combining the principles and practices that support NCM’s success in the cinema advertising field with that of Danoo’s content and network growth strategy, the potential exists for the development of a digital signage industry paradigm from which all others will draw inspiration and knowledge.

Sincerely,
David Weinfeld

NCM successfully selling and leading the DIGITAL OOH advertising market for the last 6-7 years is just plain not true. This artical makes me question DOOH reason for reporting as this artical is “Yellow Journalism at best”.

J WOOLSEY