KPBS Feels Pinch of Changing Economy
Locally based Televator continues to work on finding buildings and advertisers to take part in its elevator programming.
Over the last couple of years, Televator has developed software and a system that brings content to elevators, playing on a flat screen.
Peter Fayette, the company’s president and CEO, said Televator is close to signing several contracts for properties that will host the Televator system in its elevators and businesses that will pay to advertise on the system.
Fayette recently finalized a deal with locally based Southwest Value Partners that involves elevators in the Golden Eagle Building at 525 B St. and four other Southwest Value buildings in San Diego and Los Angeles.
So far, the only building to have the technology installed has been 625 Broadway in Downtown San Diego, where Televator rents its office space.
With only one building’s elevators hooked up for now, selling ads has been tough, Fayette said.
At the 625 Broadway building, about 600 people might see the screen in a day, he explained. To appeal to most national advertisers, he needs enough elevators so that 10,000 people see the programming each day, Fayette said.
In order to encourage owners to bring in the Televator system to their buildings, the deal was created to be low risk, he said.
Building owners get a cut of the building’s Televator advertising income , roughly 10 percent of sales , and pay for the system’s installation and maintenance through it.
A screen installation and software hookup costs $6,000 per elevator, and monthly maintenance costs $150 per elevator, he said.
New advertisers are coming on board, Fayette said. Courtyard by Marriott, part of Washington D.C.-based Marriott International, launched commercials this week on Televator screens, he said.
Within the next month, Televator expects to begin airing ads from Florida-based Roy’s Restaurants and San Francisco-based Wells Fargo & Co.
The company is also developing a deal with an elevator manufacturer that would have the manufacturer actually building and marketing elevators with Televator’s content screen. The manufacturer would be paid a percentage of the sales intake, said Fayette, who would not identify the company.
After finding an engineer to oversee the software, Fayette, who was a lawyer for 10 years, started the company in January 2000. He moved Televator into current location six months later.
The company has 16 employees. Thirteen are in San Diego and three others are in a Burlington, Vt., office.
As far as Fayette knows, Televator has one competitor, a Massachusetts-based company that is already working with more than 160 buildings.
Fayette said Televator’s original demonstration software cost $20,000 to develop. From there, $70,000 in seed money in ’99 from a private investor was used to create the hardware’s second generation. The investor was from outside San Diego, he said.
In Televator’s first round of financing, $1.78 million was raised, Fayette said. The company is planning to hold a second round of financing this fall, he said.
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Sign Of The Times:
The slowing economy strikes again. Late last month, local public broadcasting radio and TV outlet KPBS announced it laid off 14 employees as part of a budget restructuring. The employees were not identified.
In KPBS’ past fiscal year, which ended June 30, revenues had fallen $800,000. The loss represented 5 percent of the station’s $16 million annual budget.
“KPBS is feeling the pinch of a changing economy,” said general manager Douglas Myrland. “As budgets shrink for local businesses, they have less to spend on underwriting.”
KPBS has also seen membership drop because residents have become more conservative with their discretionary income, Myrland said.
Status Chart:
Design firm GossKellerMartinez, Inc. recently signed to design annual reports for locally based firms Corvas International, Inc. and Immune Response Corp. Spear-Hall & Associates will handle advertising and public relations for “Blast to the Past” an event being put on by the El Cajon Boulevard Business Improvement Association.
The deadline for the next Media & Marketing column is Sept. 14. Rodrigues can be reached at (858) 277-6359, Ext. 107, or via e-mail at trodrigues@sdbj.com.
