In an age of increasing specialization, one solution provider, Lou Giacalone Jr., has found a niche in the emerging market of using technology to send digital media to kiosks in public places and highly trafficked areas.
Giacalone is co-founder of AdSpace Networks, a 3-year-old Las Vegas solution provider that uses high-speed networking technology and wireless LANs to beam digital media onto plasma screens located in movie theaters.
The company recently landed a contract with Loews Cineplex to send splashy advertising images to gas plasma screens in more than 40 theaters in eight cities.
The company's solution is unique: a proprietary software called CoolSign displays and distributes multimedia images over a networking system of servers that goes from the company's main office in Las Vegas to the theater. With a few clicks of the mouse at a workstation in Las Vegas, the digital media, along with changing advertising messages, can be deployed and rearranged on screens in kiosk-type settings in theaters in major cities including New York, Los Angeles, Chicago, Philadelphia, Boston and Dallas. Satellite terminals, T-1/T-3 lines, cable modems or DSL can all be used to establish connectivity between the servers. The last mile of the system is a wireless LAN set up at the theater.
Access points that act as a hub are mounted in the theater,typically in a concession stand. Data from a server, usually placed in the theater's wiring closet, is communicated via the access point to a display controller or another server with a wireless NIC card that sits directly under the plasma screen.
The centerpiece of the system is CoolSign, software written mainly in C++ code that pushes digital media to each server. "That's the secret sauce,' Giacalone says. "This is really about a robust network and the ability to have a simple control mechanism that has a GUI interface that allows real people to control this."
Giacalone and Mitch Grasso, now chief creative officer at AdSpace, spent roughly a year developing the software. The two met at Silicon Gaming, a start-up in Silicon Valley that produced multimedia slot machines. They left in 1998 to found AdSpace and the CoolSign technology.
CoolSign can combine different media types in a single display image, including MPEG, TIFF, JPEG and Photoshop. Each display can be programmed in advance with a message. It can be programmed to appear according to a schedule or randomly shuffled. It can also be integrated with a customer's database so it will delete advertisements for items that are sold out or outdated events. An activity log tells the staff at the workstation which images are running at which times and at which locations.
The software also accounts for the times when a network or a wireless LAN slows down. It's designed with a "store and forward' technology so that images are pushed out and stored on servers at every point in the network. And when a digital image is initially deployed, the software matches it to a unique algorithm that can detect and pull back the image if it has been altered.
Software is configured onto every server in the network. Windows-based servers are placed at the start of the network,the network controller. It communicates with a site-controller server in the wiring closet at the movie theater. That server communicates through an access point to the wireless LAN. The display controller, another server, is part of the wireless LAN, located under the plasma screen. The wireless LANs are part of Cisco's Aironet family, Giacalone says.
Giacalone says the company chose Cisco's wireless LAN product because it was more robust than competitors'. Wireless LANs are used in most of the theaters because cabling a wired network would be expensive and time-consuming, he says.
AdSpace has installed more than 300 systems with the CoolSign technology. The company has sold the turnkey system to casinos, sports restaurants and shopping malls. Loews' contract requires staff at AdSpace to run the system remotely. AdSpace will deploy the images, maintain the system and sell,and even write,advertising.
Giacalone, who studied computer engineering at the University of California at Berkeley, and Grasso started AdSpace with $150,000 they raised from family and friends. The company, headed by CEO Karen Katz, also a former Silicon Gaming employee, plans to double its staff of 30 this year, and generate at least $10 million in revenue in 2002.
AdSpace got a boost recently when it received $14 million from a group of investors led by Doll Capital Management. The money will be used to expand CoolSign technology to retail stores and other public places, including airports and office lobbies.
Giacalone and his team foresee a growing number of clients next year. They want to start a channel with computer networking resellers who can install CoolSign and the networking system.
"It has enormous potential,' Giacalone says of digital media networking. "It literally is going to be everywhere. It's the way to communicate with people. It's rich media in public places that's controlled. You don't need people to run around and change posters and update it. It can all be done at the touch of a button.'
Competition And Future
Several other companies are also launching Internet-connected display terminals in public places. Their path to profitability, analysts say, has been rocky.
"Digital media in public places?' asks Adi Kishore, an analyst in media and entertainment strategy with The Yankee Group. "I'm sure we'll see more interest in it, but it's important to find a really compelling business model for it. I think you also need to find some kind of content or services that's not necessarily just advertising or video and that delivers what someone thinks is a compelling service.'
Competitors to AdSpace include Captivate Networks, which operates video screens with news and advertising in elevators of buildings owned by TrizecHahn Office Properties. Another company, Civia, recently signed a deal to put kiosks in the lobbies of office buildings owned by the same property group. The kiosks let users query the system for certain information.
But Giacalone remains confident.
"It's just a matter of time,' he says. "It's not a multibillion-market today, but in five years' time it will be.'
That is inevitable, Giacalone says, because the cost of networking technology will come down, making the systems cheaper to build. And, putting digital media in public places is a more efficient way for advertisers to reach a range of demographics.