High Tech Signage

High Tech Signage

Ken Goldberg and partners are introducing a new technology that helps retail sales while appealing to the American consumers' penchant for television.

By Sean Roth

Real Estate Editor

Only three weeks after Ken Goldberg became chief executive officer of Real Digital Media LLC, he's raring to kick off the high technology business that could significantly change the way retailers, including banks, handle point-of-sale advertising.

Goldberg and business partner Ken Morris were named GCBR's Entrepreneur of the Year in 1999 for their work at CFT Consulting Inc., a Sarasota-based retail and supply-chain management consulting firm. Not long after receiving the award, the partners sold the company to Answerthink for about $14 million.

Goldberg remained with the company until 2003, when he became an investor and chief operating officer of the technology-company incubator Startup Florida. Now Goldberg is bringing Real Digital Media, Startup Florida's second company to market.

Real Digital Media (RDM), started in 2002, through MILCOM Technologies, a technology incubator in Orlando. But the company, in need of an infusion of capital, turned to Startup Florida in March.

"We didn't go for it immediately," Goldberg says. "But after we went through our diligences, and we had worked through the burn rate and the overhead, we said we would invest if they moved the company to Sarasota to take advantage of Startup Florida."

Also as part of the deal, Real Digital Media made Goldberg CEO. "It now has a significant injection of capital," he says. "With the initial hardware complete, and the software nearly complete, we are really focused on getting this to market. Now it is fundamentally about position and selling."

The company is designed to take advantage of a new technology for handling in-store electronic signage. RDM uses an Internet-based appliance, with a 40-gigabyte hard drive, to provide media content to display devices such as TVs and LCD screens. The hardware allows retailers, bankers and hospitality businesses to easily control content from the Internet, at a significantly lower cost than a closed-circuit satellite system. The hardware contacts a server for any available content downloads and then "pulls" (a more secure method which helps protect the server from hackers) down any updates or changes to the media content.

RDM's technology is currently being used by the L.L. Bean chain of outdoor lifestyle stores, one of RDM's early clients. If you walk into an L.L. Bean store, there's a small flat screen attached to one of the Internet boxes, which then connects to the Internet via either an Ethernet card or through a wireless network. The device promotes L.L. Bean's Summer Adventure packages, a line of outdoor courses and vacations - a second business line for the retailer, which also adds to the ambiance of the outdoor lifestyle chain. Any changes to the content can be done on the fly, and the media content can also be easily customized to different regions of a country and different sections of a particular store.

In banks, for instance, Goldberg envisions several monitors and box stations throughout each branch. "If you are in the line for the teller, the bank could talk to you about its current mortgage rates," he says. "If you were waiting to see a loan officer, the box could tell you about the bank's money market accounts or the top loan guy. When that guy leaves the bank you can change the system to talk about something else."

This type of in-store advertising appears to work and is catching on with more and more retailers, he says, adding, "We have only been with L.L. Bean for a short time, and it is already very successful."

Recent adapters of in-store television/advertising include: Wal-Mart, Sam's Club, Sears, Circuit City and Best Buy. Those big name retailers all use San Francisco-based Premier Retail Networks, which provides most content via satellite.

This point-of-sale advertising trend is worldwide. Last month, United Kingdom-based Tesco plc, one of the world's leading retailers with more than 1,000 stores in the U.K., Ireland, Hungary, Poland, Czech Republic, Slovak Republic, Thailand, South Korea and Taiwan, announced plans to develop in-store communications, called Tesco TV. Its goal is to have the communications system deployed in 300 Tesco stores across the U.K. by the end of this year. Tesco has partnered with a broadband satellite provider for the service. According to published reports, Tesco officials view the network as a new source of revenue, not just another marketing tool.

Overall, Goldberg is banking that customization, reliability and price advantages are enough to make Real Digital Media attractive to retailers and others. Each application box is expected to cost between $800 and $900. That gives the technology a significant price edge over the next most customizable existing option - closed-circuit satellite; allowing Real Digital Media to emphasize its ability to customize its content in comparison to pre-prepared company videos, DVDs and CDs. The application box is also less expensive than a typical personal computer system and has fewer moving parts, which tends to give it a longer life.

Real Digital Media officials are in discussions with several retailers, including a local bank, an auto-part store chain, a national retailer, bars and gyms. "The auto-parts chain is likely going to be our first wireless pilot," he says. "A client of ours is actually piloting a concept called Bar TV."

The technology also puts Goldberg in the enviable position of being able to explore multiple business structures. RDM could strictly sell the application, which Goldberg says is not really his goal for the company. It could manage and create content for clients to use on the systems; it could upload the content and monitor the system. RDM could even sell ads on their clients' systems.

"There are just so many different ways we could make this work," Goldberg says. "Right now we are just getting aggressively involved looking for companies to partner with. All of the product engineering is done. Now, it is just a matter of getting us to critical mass. ... It's time to sign people up. It's a pretty fun strategy that is particularly easy to explain."