Check This Out

SilentRadio, a Chatsworth company whose moving electronic displays featuring news, entertainment and sports scores are in many post offices, banks and other businesses, is going into--what else--silent TV.

Its new network, to broadcast both entertainment and commercials, would air first in supermarkets. In March, SilentRadio, the National Broadcasting Co., Fleming Cos., the nation’s largest grocery wholesaler, and Site-Based Media Inc., a New York advertising concern, agreed in principle to join the venture. The network, to be called On-Site Media Inc., would be based in New York, but would keep its Chatsworth office.

Under the agreement, NBC would supply On-Site with entertainment briefs to air without sound on 19-inch color TV monitors suspended from supermarket ceilings above several shelves in each store.

The goal is to grab shoppers’ attention and influence their buying decisions at the crucial point of sale. “An eyeball watching TV at home is the same as an eyeball watching in the store,” said Lewis Solomon, SilentRadio’s chairman and chief executive, who would also be chairman and chief executive of the On-Site network. “One could argue that the eyeball in the store is more valuable because it’s at the point of purchase.”

Solomon said his company’s research shows that a large supermarket gets 600,000 shoppers a year. Most of those shoppers visit the store an average of about nine times a month.

Each TV hung over grocery store aisles will carry some public-service announcements and would also include 15-second commercials for products in the stores. The On-Site network hopes to attract soft-drink companies, makers of baby diapers and other big national advertisers. Besides supermarkets, it may be expanded later to other types of businesses.

In supermarkets, the On-Site network would compete with Checkout Channel, launched by Turner Broadcasting System Inc. in January, and In-Store Advertising Inc., a New York company. In-Store is about 20% owned by Capital Cities/ABC Inc.

SilentRadio’s proposed On-Site Network would install and operate its system free of charge to grocers. It will also share ad revenues with supermarkets.

“I’ve been getting between $100 and $120 a week,” said Paul Tassey, manager of a Snyder’s Food Mart in Oklahoma City, one of several stores that are testing SilentRadio’s On-Site Network. Other grocers will get slightly less when the network is fully operational, which is expected to be later this year.

On-Site also plans to offer grocers another inducement that would be unique for supermarket networks. Besides giving supermarkets a portion of the national advertising that On-Site sells, grocers would be able to sell some 15-second commercials themselves to local advertisers.

“We started getting calls from Day One from muffler shops, car washes, fast-food restaurants, all wanting to get their commercials on it,” Tassey said.

As part of the On-Site network, supermarkets would also be able to install SilentRadio message boards mounted near checkout stands to occupy shoppers waiting in line. The grocery store displays, which are already in about 15 supermarkets, are called Checkout Chatter.

“As advertising vehicles, supermarket networks have a great future,” said Terry Bowman, a senior vice president in the Los Angeles office of Omnicom Group’s BBDO advertising agency.

SilentRadio, originally formed as Cybernetic Data Products Co. in 1979, was purchased last year by LaSalle Capital Corp., a New York investor group led by Solomon. In 1991 SilentRadio had a net lost of $2.1 million on revenues of about $5 million. SilentRadio’s shares trade in the over-the-counter market.

The On-Site network will be a significant departure for SilentRadio, which expects most of that network’s revenues to come from advertising. Two-thirds of the company’s revenues now come from selling electronic displays called message boards to businesses and charging them a monthly fee to subscribe to one of its information services. Those services include news, sports, financial items and entertainment. SilentRadio has it message boards in about 2,500 businesses nationwide.

The company’s 80 Chatsworth employees include 11 editors who cull items from news wires for SilentRadio’s information services. The items are transmitted to a satellite, and then to local television stations that receive its signal.

Finally, the data is broadcast on SilentRadio through local television stations that receive its signal. The company has contracts with 37 local television stations in major cities. In return, the stations get about 6% of SilentRadio’s subscription fees and advertising revenues.

SilentRadio now gets the remaining one-third of its revenues from selling customer-programmable displays. These range from small displays for retail businesses up to large boards such as those used at racetracks or in airports to provide departure and arrival times.

Earlier this year, SilentRadio and Site-Based Media agreed to merge if NBC and Fleming joined the On-Site venture. Financial terms of the new On-Site network haven’t been determined, Solomon said. But he expects the partners to complete their agreement in the next few weeks.

Fleming would offer the On-Site network to its 4,800 affiliated retailers, as well as to other stores. The grocery store TV network would also give NBC a new market for television advertising. “We also expect to capture advertisers’ dollars that are now going into” coupons and discount promotions, said Tom Rogers, president of cable and business development for NBC.

SilentRadio’s rival, the Checkout Channel, operated by Turner Broadcasting, is already airing Turner’s Cable News Network and Headline News, complete with audio, in about 130 supermarkets around the country.

“Our research indicated that waiting in line is the No. 1 customer frustration for shoppers,” said Scott Weiss, executive vice president of Turner Private Networks Inc. “Checkout Channel was created to offer the consumer a service so that just waiting in line could instead become productive and more enjoyable.”

The other major rival, In-Store Advertising, the venture that includes Capital Cities/ABC, operates silent billboards in about 5,400 supermarkets nationwide. Their five-foot-long displays carry grocery advertising but don’t feature any entertainment. “People don’t go to supermarkets to be entertained,” said John Capps, In-Store’s senior vice president. “They go to get what they need and get out.”

Despite the rush by rivals to get more advertising into grocery stores, it’s still too early to tell if in-store advertising will offend shoppers more than it grabs their attention. Conceded Bowman of the BBDO advertising agency: “Going to the supermarket is already an overwhelming experience that’s a hassle for most people.”

Bombarded from every angle by other types of in-store advertising, Bowman said video pitches might “just add to the clutter.”