Transit TV shuts down
February 6, 2009 by Dave Haynes
Transit Television Network has voluntarily filed for bankruptcy protection in the United States, according to news reports.
Torstar Corp., which owns Canada’s largest circulation daily newspaper (the Toronto Star), says it plans to take a $1.5 million charge on its fourth-quarter financial statement as a result of the closure.
Torstar had said a year ago it had done a deal to sell Transit Television Network to IdeaCast, a Chicago-based network mostly doing health clubs.
At the time, it said IdeaCast had an option to buy the network in the second quarter of 2008 in a share swap deal that would see Torstar acquire a stake in IdeaCast.
However, the company retains ownership of the network today.
Transit TV is North America’s biggest transit-based digital advertising network operator. The company has installed and operates digital ad technology on the transit systems in Los Angeles, Chicago, Atlanta, Milwaukee, and Orlando, Fla.
Transit TV provides advertising on 8,500 television screens and is seen by more than 500 million riders a year on nearly 4,000 vehicles.
Torstar said that both Transit Television Network, LLC and Transit Television Network California, LLC have filed a voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.
Like other businesses, the transit advertising operations have been squeezed by the U.S. recession, which has reduced ad revenues as companies cut back their spending to conserve cash.
A daily newspaper investment in a network that wasn’t even running on buses in the same country never made a bunch of sense to me, and with offices hours away in Orlando I doubt there was ever much in the way of collaboration or those fabled “synergies” between business units. Then again, Torstar has made a pile of money from owning the Harlequin books empire (bodice-ripping romance novels).
From the looks of things the company had just two sales people, and one was based in the agency backwater of Orlando.
So playing backbench CEO here, they likely had massive capital and operating costs to run this thing, contracts where they had to sell ads in B-markets like Orlando (whewre I bet everyone who can drives) and Milwaukee, and not enough sales feet on the ground to get anywhere.
I actually like the whole transit thing’s dynamics if one can get past the costs and engineering challenges. You’ve got people stuck on the bus for many, many minutes, and screens that in Transit TV’s case were giving contextually relevant information about location and next stop (so, sticky content). But bus riders are not necessarily the audience a lot of advertisers are after, and to get the attention of national media buys, these guys had to have screens in many more markets.
It will be interesting to see if someone can pick up the assets cheap, or just agree to run the thing, as I doubt many metro transit authorities will know what the heck to do with the screens, and I’m sure they’d prefer they weren’t dark or BSOD’d.