- 11 Nov 2014
- TPM outdoor
Crain’s New York: Times Square lights go digital
Some reading led me to stumble upon this article – from Crain’s New York link here
Times Square lights go digital
Technology remakes the market for big signs at world’s crossroads.
Buck Ennis New Wave: The latest of the “spectaculars” inter-act with passersby.
Published: January 9, 2013 – 11:06 am
Times Square’s “spectaculars”—the biggest and best of its famous billboards—draw tens of millions of eyeballs every year and are increasing the interest of some of the city’s biggest landlords.
Both SL Green Realty Corp., the city’s largest office landlord, and Vornado Realty Trust are making major moves in the vertical real estate market at the Crossroads of the World. What they and others are betting on is the ability of the new generation of digital signs to become major money spinners akin to the retail spaces they lease out at street level.
Depending on the location and dimensions, billboard space in Times Square can command $300,000 to $400,000 a month under a long-term contract from a single advertiser. The digital signs open new possibilities to market the space in shorter increments, costing as much as $40,000 for a day in prime holiday seasons.
Behind those rates is an army of advertisers clamoring to get their brands in front of the 35 million tourists who pass through the square annually, and the millions more who see the signs on friends’ Facebook pages, as well as on YouTube and various television shows.
“The advertisers understand it’s all about location, location, location,” said Brian Turner, president of Sherwood Outdoor, a unit of Sherwood Equities Inc., which owns 1 Times Square and 2 Times Square, and manages 1600 Broadway on the corner of West 48th Street.
“It is a real estate/media hybrid.” It is something that SL Green felt comfortable enough with to invest in a couple of three-story-tall LED screens for the north and south ends of its tower at 1515 Broadway, which juts into the “bow tie” at the intersection of Broadway and Seventh Avenue, giving advertisers exposure from both directions. SL Green is hoping to maximize its income by marketing its vertical space in dollops of as little as 15 seconds in a two-minute loop, which, among other things, would allow the company to charge a hefty premium for time slots during such holidays as New Year’s Eve.
The company has contracted with national billboard giant CBS Outdoor. That company will help market the signs while SL Green will reap the “lion’s share” of the revenue, according to Brett Herschenfeld, an SL Green senior vice president.
Vornado has entered into a similar arrangement with Van Wagner Outdoor Advertising for a new 41-foot by 72-foot LED sign at the Bertelsmann Building at 1540 Broadway, according to Guy Russell, general manager, North America, for Barco LiveDots, which made the sign.
Across the street to the west, Vornado has plans, announced in the summer, for a monstrous six-story-tall sign that it said will stretch the length of a football field as part of its redevelopment of the retail space at the Marriott Marquis Times Square Hotel. The developer did not respond to requests for comment.
Both landlords are among those owners aiming to boost their returns by investing in digital signs that they can carefully program, much like a television network’s air time, rather than renting out by the month or year, as vertical landlords used to do.
The downside is that the new LED signs are more expensive to put up. The light-emitting diode canvases can cost as much as $1,000 a square foot, according to Jason Barak, managing partner of D3, a digital design specialist. “Landlords are looking to own these displays as part of their real estate portfolios,” said Mr. Russell of Barco, the LED display maker known for the 14,000-square-foot array of screens at American Eagle Outfitters’ flagship store at 1551 Broadway and West 46th Street. “It’s in the early adoption phase right now.”
Quickening the switch-over is a steep 50% decline in the cost of the displays during the past 10 years—while the quality has increased—giving more companies access to the technology. This has raised concerns that a glut may develop, placing a premium on advertisers’ creativity in using social media to engage shoppers.
Advertisers already are encouraging tourists and other passersby to use their smartphones to shop directly from the street, using text messages and emails. In doing so, they are gathering information they can use to market their products to the same consumers year-round.
“Over time, it’s going to be signs collecting data,” SL Green’s Mr. Herschenfeld said. “All that data is worth a lot of money. That’s the direction the Times Square advertising market will go.”
SIDEBAR: DESIGNERS TEST LIMITS FOR SIGN
Among the beneficiaries of the LED revolution is a small group of digitally savvy manufacturers and designers who’ve displaced the neon “tube benders,” and before them, the paper hangers and carpenters who once built Times Square’s biggest signs—its “spectaculars.”
“LED display costs vary by size, complexity and resolution,” said Jason Barak, managing partner of digital sign designer D3. “On the lower end of the spectrum, some units have been purchased for $250,000, and on the higher end, $10 million-plus.”
The displays require “high engineering and technical expertise,” said Barry Winston, a sign builder who’s been working in Times Square since 1954, back when the Camel cigarette billboard, blowing a seemingly endless stream of perfect smoke rings, set the standard for edgy excellence. D3, based in New York and California, has put up more than half the LED displays in Times Square since the company was formed in 2006.
Mr. Barak said he is counting on something he calls “sign envy” to spur demand for years to come. “People want something that’s curvier, that’s flashier, that’s bigger,” he said.
D3’s Times Square displays include the rippling ABC News sign at West 44th Street and the Forever 21 billboard that’s equipped with face-recognition technology capable of featuring passersby.
Other digital players include Barco LiveDots, a unit of Belgium-based Barco, and Daktronics, of Brookings, S.D. Daktronics pioneered digital LED some 17 years ago with a display at Morgan Stanley headquarters, said Randy Antes, director of digital projects for the company in New York. It also made the current Coca-Cola display at 2 Times Square, where the soft-drink maker has had a sign since 1932. —Stephen Kleege