The murky world of digital signage

November 8, 2007 by Dave Haynes

There are at least a couple of companies out there, probably more, that have devices that essentially sniff network broadcast signals, always looking for TV commercial breaks. When it is advertising time, the gear switches over to in-house advertising in one way or another.

It is a means by which a company can take something like an all-sports channel feed, run it on screens in a venue, and sell ad time around it.

Predictably, network operators are not happy about this – even if it can be correctly argued that Nielsen ratings and therefore their ad dollars are completely unaffected by this sort of thing.

One company called SegOne ended up indirectly in court over this, when broadcasters went after the Flying J truck stop chain for using the SegOne gear to run TVs in their lounges that had local ads instead of the national ones. The court ruled against Flying J and compensation for copyright infringement was settled out of court. SegOne then tried to go after the broadcaster on the premise that the court action hurt its business. That was dismissed.

A summary of the cases can be found here.

I mention this because what they are doing is kind of a low-budget version of digital signage, with screens showing content that interests consumers, bolstered by advertising. Clearly the legality of it is subject to a lot of debate, and there is another company in the space that says while it offers similar capability, the technology is on solid legal ground.

Television Point of Sales argues that all it does is sniff for commercial breaks and when they happen, they switch the output to the screen to a separate signal, and then cut back as the ad break ends.

The POS-ADS100 server completely eliminates the need for a cable head end and exponentially increases the amount of time allowed for commercial playback thus building or increasing the ad revenue possibilities for each establishment.

The POS-ADS100 server breaks the barrier for Sports Bar and Gym franchises who want total control of commercials in their venues. Hotels, Casinos, any professional establishment who wishes to generate ad revenue and multiply their exposure to their revenue base and increase sales can use this technology to increase their bottom line. By utilizing your own TV feed you can create your own Point of Sales with the POS-ADS100 server.

The company Website is fairly exhaustive in its FAQ when it comes to whether this is kosher. TVPOS states:

* Switching channels or feeds doesn’t alter the copyrighted material in any way, so the Fair Use doctrine is irrelevant.
* Providers act as agents for the Networks. This use is not in violation of the terms of their commercial contracts.
* The Networks are being fairly compensated for the business use of their copyrighted works via the commercial contract.
* Commercial venues are gravy for advertisers since they don’t pay for the ads played in them.
* Networks cannot show financial harm due to loss of ad revenue in commercial venues.
* Again, it is not incumbent upon the end user to support the Networks’ ad-supported business model.

All the language on the TVPOS site suggests they know they are walking a fine line, and that prospective buyers do as well. Interestingly, the SegOne site goes the opposite way and doesn’t seem to even suggest there just might be an issue here.

Were I looking at setting up a network to entertain my bored customers in muffler shop waiting lounges, or wherever, I have to think they’d rather watch some headline news show than repurposed old TV or whatever else I could come up with to fill the space between ads … particularly if ads only pop up every 8 or 10 minutes on network breaks.

I’m just not sure I wouldn’t end up spending more on billable lawyer hours than I’d ever make on ads. It’s not a can of worms I’d choose to open.