This month, we welcome Lorne Abony, chairman and CEO, Mood Media Corporation , Toronto
- How did you personally get into this field? Tell us a bit of your own background and what propelled you in this direction.
I founded a number of start-ups in growth industries over the years, including online pet supply business Petopia.com in 1998, and FUN Technologies in 2002, which grew to become the world’s largest provider of online casual games and fantasy sports with over 35 million registered customers.
Mood Media Corporation is similar to them in that in-store media has huge growth potential worldwide and, as the only supplier of fully-integrated in-store media services, Mood Media Corporation is set to grow with it.
I started my career as a corporate and securities lawyer in Toronto after graduating from the University of Windsor law school in 1994, but opted for an entrepreneurial career as I find making money for myself more compelling than guarding the securities of others!
- You offer a mix of music, visual and even scent in 800 retail chains in more than 30 countries. What is the difference between your two divisions: In-Store Media and Retail Point-of-Purchase? Do they each have separate management, sales staff, etc. And is one division growing more than the other?
Our in-store media division is about working with retailers to build a powerful communication media channel for their customers, this can be either an in-store TV network or a branded radio station. The Retail POP division is about physical media for sale within a retail space.
Both businesses are complimentary in terms of media assets but offer a different business proposition. Even though both divisions have separate management and sales staff, they are completely complimentary.
- Phone calls to Mood Media sometimes get answered under a different company name. Are you involved in several different companies? Where does Fluid Music fit into the mix?
The headquarters of Mood Media Corporation is based in Toronto and shares an office with our Retail POP division, Somerset division, currently being renamed to Mood Entertainment. When Fluid Music purchased Mood Media Group in June, 2010, the parent company which was known as Fluid Music renamed to Mood Media Corporation.
- You do a huge amount of traveling throughout North America, Europe, Asia and Australia. Where do you see the most growth potential for your product mix and why?
All of these regions present huge growth potential for Mood Media Corporation, which is why they comprise our key markets. However, Asia – and the Chinese market in particular – is one of the most promising among these. While in-store media is mature and well understood in most territories around the world, it is still considered a new segment in China. This is changing quickly as Chinese retailers are starting to understand the substantial sales uplift a managed media service generates.
- If you weren’t in this field of business, what can you see yourself having done as a career? Is it something you can or do pursue as a hobby?
Competitive tennis is one of my favourite pastimes. I was a member of the Team Canada men’s tennis team, which competed in the 2009 Maccabiah Games in Israel and I also competed in the USTA Men’s NTRP 5.0 Florida Section, where I was ranked fourth in the state in 2010. Of course, I would love to take up full-time competitive playing but, for the time being, I try to win most of my aces on the stock market!
- I see that you acquired Pelika Business Music and Muzak recently. Is most of your growth via acquisition or organic?
We will grow via acquisition and organically. Pelika was bought due to its clear market leadership in the Nordic region on digital business music solutions. These combined companies have helped to create a clear leader in the in-store media market with the potential to become a globally recognized brand.
- You have TeamCo, your own proprietary software, to manage content, but I see that you partner with many different companies for hardware. Why?
We consider ourselves as media providers and will always work with the best display technology solution that fits our clients’ requirements. We have an international network of project managers, installers and audio-visual specialists who will work with the likes of NEC, Prysm and Christie where the project requires it. In these cases, we act as an integration specialist. Working with external partners to provide hardware allows us to focus on our unique consultative process, which results in innovative software and integrated in-store content. It also allows us access to a much wider pool of hardware solutions.
- How do you deal with content, considering that you are operating in many different countries and with such a product mix? Do you have your own in-house content development team?
We are confident we have one of the largest libraries of audio visual assets within our industry. Our consultative content development team is at the core of Mood Media’s services. We work with clients to tailor content specifically to the tastes of their customers, which can change throughout the day or geographically, depending on where each store or business is based.
Increasingly, we create a global media channel with localized content and we can offer this as our media planners and consultants all build local libraries as well as input to our global media database. We have a stringent content screening process so that we are confident we create the most effective media channel for our clients in every market they operate.
You offer scent, something that has been something of a controversial topic in the media regarding the use of scent in retail settings. Do many customers use it? Where, predominantly? Is it usually used alone or in association with screens and/or music. Does it really increase sales?
Scent is a small part of our overall in-store media business and is mainly focused on the retail sector. The benefits of scent solutions are manifold: a range of studies have shown that they can influence customer buying decisions, compel them to stay in-store for longer, raise a company’s brand profile and increase employee productivity.
Our in-store scents are fully compliant with IFRA and the technology we recommend ensures our diffusion is completely safe. We find fashion and hospitality brands show the most interest in scent and want to look at it in conjunction with audio and visual media solutions.
- Describe the content on your screens. How much is advertising? What kind of advertisers do you have?
The content on our screens is completed in consultation with our clients and is dependent on their aims. This is why our in-store visuals are so effective and innovative: we aim to engage, inform and entertain customers with relevant content, not make them switch off by bombarding with streams of messaging that is irrelevant to that shopping environment – it’s always got to make sense and work in conjunction with the brands communication channels.
- What is Mood Media’s growth strategy over the next five years?
We plan to consolidate our position in our key markets in Europe, the US and Australia, while expanding into and gaining traction in the huge growth markets of Asia, which represent some of the world’s fastest moving economies.
For example, two of our recent announcements truly create the scale we want to achieve in Western-markets and set the stage for expansion in the East. On March 15, 2011, Mood Media announced it was determined on expanding into China and was in talks with partners to build operations in-market. On March 25, Mood Media announced its intention to acquire Muzak, the largest and most recognized in-store media brand in the United States.
- You sell music and PC games. Is this though in-store kiosks or via mobile or? Do you have deals with music or game producers?
Our PC gaming and compilation music offerings are sold through innovative, interactive in-store kiosks, which allow customers to experience the product they are interested in buying prior to purchase. We work with leading games producers such as Mumbo Jumbo and Big Fish Games; we also produce and distribute the work of critically acclaimed artists such as Multi-Grammy nominee Jim Brickman, Loreena McKennitt and Jewel.
- You are a public company. What was Mood Media’s revenue and profit last year? How were you affected by the recession?
We had a strong performance in 2010. Revenue was $145 million and Ebitda $29 million. All our results are available on our web site. We always ensure our media solutions drive growth and achieve our client’s goals, so we find that during a downturn our solutions are often given more priority and further investment is made in promoting key messages at the point of purchase.
- Give us your thoughts on the use of things like interactivity, 3D, QR codes, augmented reality in relation to your offerings, now or future.
Integration of all these technologies is key and ensuring they compliment the retailer’s core objectives. For Mood Media, we ensure whatever the technology, the content is right for the display technology and is actually doing something of benefit.