NBC Sees a Future for Out-of-Home Video

NEW YORK — In a topsy-turvy TV world challenged by the writers strike and new technologies, NBC Universal is betting that the future of the video business is not just at home or online, but in supermarkets, arenas, taxi cabs and gas stations.

NBC held its first "Digital Out-of-Home" presentation Wednesday, pitching its business offerings and plans to about 200 people representing advertisers and media buyers.

"Media has become very fragmented. People are consuming media in a variety of different settings," said Mark French, general manager of the company's NBC Everywhere division.

While advertising on video screens is popping up all over, French said NBC is not interested in the business of simply using digital display ads that people glimpse in passing.

"We only want to be in a space where the audience is captive for a minute-plus," French said before the event, which was held in the Rockefeller Center studio used by "Saturday Night Live."

French said the goal is to expose viewers to entertaining video and ensure that ads are seen. He projects that NBC's out-of-home content, played on more than 300,000 screens nationwide, will be viewed more than 3 billion times this year.

Digital signs account for only 4 percent of signs now, but will reach 28 percent by the end of 2010, according to projections by the Carmel Group research firm. By that time, such signs will bring in $2.5 billion in revenue, the group found.

The key for companies will be finding ways to make video relevant to consumers in a variety of settings, said Jimmy Schaeffler, a media analyst with Carmel Group.

Other players are also looking beyond traditional TV venues.

In September, CBS Corp. said it would pay $71.5 million in cash to buy SignStorey Inc., which provides more than 1,400 grocery stores with video screens to display video programming and advertising.

The focus on other settings for video comes at a challenging time for the industry.

The increasing growth of online and mobile video has media companies and advertisers scrambling to redefine how they do business.

The ongoing writers strike also threatens to disrupt how the networks create new shows and sell them to advertisers with flashy "upfront" presentations.

Schaeffler said events like the strike will accelerate the spread of video screens in out-of-home settings.

French said two years of evaluating the out-of-home market and partners to deliver video led up to the Wednesday event.

NBC's current video reach includes screens in gas stations in cities including Los Angeles, Chicago, Washington and Miami. Screens are also nationwide in more than 1,000 supermarkets and 34 stadiums and arenas.

In New York, NBC has video on screens in many taxi cabs with advertisers including Coca-Cola and Panasonic and it plans to put screens this summer in commuter trains running between Manhattan and New Jersey.

On Wednesday, the NBC division announced new deals expanding its video reach to 900 gyms and 181 college campuses.

By targeting specific moments when a person's attention is unoccupied, such as while sitting in the back of a cab or waiting in a supermarket checkout line, the technology can deliver very specific types of viewers to advertisers and better track who sees what, French said.

He said advertising in places where people are about to make purchases also is a powerful tool.