A chance backstage conversation between two area businessmen at a Las Vegas digital signage conference last year has led to a partnership that may just put the industry on its head.

Jeff White, from Hamilton, is owner of Blast Media, which has launched the Bar Channel. It's an an innovation in the digital signage industry -- actually using content in addition to ads on giant television screens on a closed circuit network in about 100 restaurants and bars in Ontario.

He was speaking at the conference when he heard that Steve Kartonchik, vice-president of sales and marketing for Burlington-based Adflow Networks was speaking right after him.

"We met backstage and I said, 'You're from Burlington?' Then away we go."

Also backstage was a Rogers representative who knows Kartonchik as Rogers is an Adflow client.

Adflow has developed a marketing medium that allows an organization to create, manage and deliver advertising on screens located anywhere in the world.

The three companies have just signed a partnership that will see Rogers take over media sales and provide some content, Adflow will provide technological expertise, with Blast handling marketing and development of the Bar Channel concept.

The partnership has ratcheted up the stakes in a fight for ad revenue, particularly with TV stations.

The out-of-home digital signage industry is estimated to be worth about $1.6 billion US in North America. But it's expected to grow to about $2.6 billion by 2011.

What's really striking, however, is the rapidity with which advertisers are catching on.

This year North American advertisers are expected to spend about $600 million on out-of-home digital signs, said Kartonchik.

By 2011, that number is predicted to increase to about $1.8 billion.

"I just got back from a conference in Philadelphia where everyone in television has their heads down because no one is watching commercials," said White.

Part of that is due to the new multimedia nature of advertising campaigns, said Kartonchik.

"It's all becoming integrated. At the same time, it's becoming tougher and tougher to reach people in traditional ways. They've got satellite radio or they channel hop or zap through TV ads ... A lot of people don't read newspapers anymore, they go online so advertisers are starting to respond."

So is the Bar Channel.

It takes a distinctively different approach in the industry by offering content as well as ads to its bar owners in an effort to not only provide a new revenue stream to bars, but a new entertainment medium to bar patrons.

The content on the station is edited into two-minute clips that are not sound dependent (after all, most bars and restaurants are loud places) and it is targeted for each restaurant's market needs.

White, who has a background in the bar and restaurant industry, said the hardest challenge is sourcing appropriate content and then getting the rights to use it.

The station runs a weather ticker and sports ticker and then can run anything from Japanese breakdancing to blooper reels to top YouTube videos.

Jenna Vaicius, at Adflow, said the partnership has great potential to help the three companies grow.

"It's definitely been great for us to be able to expand on our partnership with Rogers, it's a great opportunity," she said. "It'll be fantastic to see where it can go."

lmarr@thespec.com

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