SOURCE: AXcess News

AXcess News

August 23, 2010 12:32 ET

AXcess News: New Leader Emerging in Booming Video Advertising Market

RENO, NV--(Marketwire - August 23, 2010) - The lucrative video advertising market is seeing a surge in growth amongst the digital advertising arena in LA after Convenience TV (OTCBB: CRPZ) moved to the No. 1 market share spot on Monday, reaching 1 million viewers through its convenience store network.

Convenience TV is a relatively new player in digital signage in what's known within the advertising industry as Out-Of-Home advertising through its lucrative marketing deals with convenience stores in Los Angeles, one of the top DMA markets in the nation. This morning CRPZ announced that it had expanded its presence in Los Angeles to 28 video advertising displays reaching 1 million viewers. The sheer size of its market reach has been grabbing the attention of ad buyers, having recently cut a deal with CW Network for its "WWE Friday Night SmackDown" TV show.

Convenience TV CEO Norman Knowles referred to the CW Network deal as "gratifying" as his Company's first major advertising contract. But perhaps what he should have called it was lucrative.

The video ad network market is exploding, according to Nielsen, which released its first-ever report on the booming digital advertising market in mid-April that indicated a total adult segment across all network categories of 237 million viewers. That would place Convenience TV at about 0.42% of total market share, but because CRPZ is focused on the convenience store segment, within Los Angeles it's the largest digital signage company and growing rapidly.

In a teleconference with the press on Friday, Convenience TV CFO Greg Trevor told AXcess News that each digital signage unit, or flat panel TV, had a cost factor of about $3,800 fully installed and over the expected life of the equipment -- five years -- the Company was forecasting cumulative revenue of $16,000 per unit. With today's announcement, that would place CRPZ's annualized revenue at somewhere between $1.2 to $1.5 million.

Convenience TV's plans call for expanding the greater Los Angeles market to 100 digital displays by the end of the first quarter of 2011 with a goal of 500 video display convenience store locations by the end of next year. Should Knowles' Company meet those goals, CRPZ may find itself the target of a buyout.

One of the top Out-Of-Home video ad networks is PRN, which was acquired by Thomson in 2005 for $285 million. Thomson Multimedia changed its name to Technicolor SA (TCH) in January of 2010, after having acquired Technicolor in 2001 for $2.1 billion. Now TCH says it's returning to its roots, according to a story in Variety, with plans of selling PRN, known as the founding digital signage ad network of Wal-Mart Stores. According to Variety, TCH is "returning to its roots," though financial problems brought a near collapse of Technicolor and the sale of its lucrative out-of-home video advertising network is more seen as a desperate grab for cash. While Convenience TV may be a small fish in a big pond, companies like CRPZ are prime targets and it's anybody's guess as to whether it swallows the whale or becomes a buyout target itself, considering the niche market it serves through convenience stores, not unlike how PRN stands as the king of Wal-Mart's locations.

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