LinkNYC’s Woes Continue; NY State Auditor Says MediaCo $69M Behind On Revenue Shares

September 1, 2021 by Dave Haynes

The consortium behind all those “smart city” LinkNYC kiosks on the streets of New York is continuing to find their big idea to be a big problem.

New York state’s comptroller put out a report at the end of July that says the media company – CityBridge – was way behind on a build-out that was supposed to touch all of NYC’s boroughs and that what has been deployed has focused much more on high income areas like Manhattan and Brooklyn than on scruffier areas like the Bronx. One of the main pitches of these smart kiosks was that it would bring free WiFi to lower income areas, but of 1,869 screens noted by the auditor, 137 were in the Bronx – where a third of residents lack or can’t afford high-speed internet.

The auditor also noted that the company’s advertising revenue share deal was on shaky grounds, with CityBridge almost $69 million behind on the revenue share deal to the city. While these “smart city” deals are almost always portrayed as initiatives that are all about the Internet of Things and the public good, they exist because they’re DOOH advertising faces.

LinkNYC was announced and signed in 2014, under a 15-year-deal. While the company came out of the gate pretty quickly, and with lotsa fanfare, it has been a rough go for many years now. There hasn’t been a new unit installed since 2018.

When they were announced, I went somewhat against the excitable grain by suggesting these things were fine for midtown Manhattan but I didn’t see a happy life for them in the rougher, lower-income boroughs. When I have been in New York, when that was still possible, it was easy to find screens that were out or hurting.

The auditor report validates how that was more than just bad timing on my part. It found that of 227 LinkNYC locations checked, 76% had “cleanliness and/or operation issues, including dirty/grimy tablet screens; physical damage; and defective screens/screen icons, telephones and USB charging ports.”  

The late payments thing is also not new. NYC’s CIO threatened to void the contract last year, and it has since been renegotiated on both the payment schedule and terms, and the rollout plans.

There are some signs, however, that things are turning around.

A telecom company, ZenFi Networks, has a $200 million investment plan to install 5G equipment on the tall kiosks, and then lease the infrastructure to carriers like Verizon and AT&T. I don’t know much about cell towers and transmitters, but let’s assume street level is easier to deploy and manage than rooftop.

The deal CityBridge had with NYC has been reworked, as well, with the revenue share lowered from some $750 million over 15 years to$160 million. Part of the lowered rev share is an agreement by CityBridge that it will resume the build-out at least 2,000 kiosks, 90%-focused on the boroughs outside of the high-rent areas of lower and midtown Manhattan.

That deal was done in June and Crain’s reports CityBridge has paid $27 million to the city.

It’s a cautionary tale for anyone still thinking digital OOH advertising is easy. If you can’t make it work in one of the biggest and most attractive local media markets in the world, good luck with trying it in other cities. The UK version of this has also had trouble paying its bills.