Why The New York Times partnership with RMG Networks is not a digital signage slam dunk

What does a traditional media outlet do when its core platform erodes further with each passing season? It looks to new avenues of media distribution to reach the ever moving target that is today’s consumer. This is exactly what The New York Times has done in securing a partnership with RMG Networks, a Kleiner Perkins backed media startup that operates digital placed-based advertising networks. The Times is set to become the preeminent brand partner of  RMG’s Urban Mobile Network, which encompasses over 850 screens in cafes and eateries in major cities across the US.

With  support from partners including National CineMedia, DAG Ventures, and Kleiner Perkins,  RMG Networks stands as one of the leading operators of digital out-of-home media networks. The company manages over 15,000 digital screens nationwide. Following the July 2009 acquisition of location-based media company Ideacast, RMG Networks has been poised to garner significant market share in the fast-emerging digital out-of-home media sector.

In signing a major media deal with The New York Times, RMG Networks is strenghtening its long-term growth strategy across the digital signage industry and beyond. With one of the largest installed footprints in the digital signage space, and a roster of top-level location and investment parnters, RMG could leverage its relationship with the NY Times all the way to the bank. On the other side of the deal, the New York Times is gaining a powerful distribution arm that could help offset losses from its declining print division.

Even though RMG’s partnership with The New York Times could prove to be an auspicious one for both parties, there are a few elements of the deal that have left me questioning its overall value. Whereas extending the NY Times brand into the digital signage realm undoubtedly supports the paper’s marketing efforts, I’m troubled by the fact that the company is taking a laissez-faire attitude to the revenue potential of the new operation.

“We’ll promote some of our products. We’re not expecting it to be a huge revenue driver for us. We can reach a different audience,” Gaylord said.

While the above comment isn’t a complete dismissal of the revenue opportunities that digital signage offers to the Times, it makes me think that this is more of an experiment than a true long-term media play. Taking a short-term approach to the digital out-of-home marketplace has been the downfall behind a number of major media companies’ activity in the sector.

In addition to the ptifalls inherent in putting revenue generation on the back burner, I believe the New York Times and RMG are positioning their combined network to underpform relative to their expectations. Rather than brand the network under the NY Times banner, the digital signage net will be called NYTimes.com Today. In defining the network by the Times online operations, the system will be cloaked in the shadow of the Internet. Such a brand play will likely limit the network’s growth and editorial independence as a media channel.

In reference to the new out-of-home media partnership, Katy Bachman of Mediaweek writes, “The New York Times video ad network will look like the homepage of NYTimes.com, but also have elements of a TV channel. For the New York Times, the network is more of a branding than a revenue play .

Just tying its digital signage network to the New York Times will not guarantee RMG’s success, nor will it be a slam dunk brand awareness play for the Times. The network mus speak to the overall NY Times brand, but it must have a personality of its own.

NY Times Today needs to act as an extension of the paper while leveraging the nuances of digital signage technology and the emerging platform’s  contextual relevance. In the same manner that an online or mobile property must stay true to its core platform, so too must a digital signage network exist within the construct of it being a unique media channel.

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