Metro has been forced to postpone its plans for adding television screens across the transit system and scale back how much money it earns because of the soured advertising market.
The transit agency will bring in $8 million a year under a new advertising contract starting in July, well short of the $40 million per year it has been earning.
Also, the agency has put on indefinite hold The Metro Channel, which was slated to broadcast weather, transit updates and advertising on up to 11 screens per station as early as the end of this year.
Instead,the CBS Outdoor advertising company will begin a three-year contract with the transit agency on July 1, offering the same kinds of ads that currently adorn stations: static ones, not video.
The deal will pay Metro at least $8 million per year, but the transit agency will receive 55 percent of any ad revenue, so the amount could rise. The agency is counting on $15 million a year to balance its books.
But that’s far below what Metro has received for letting advertisers cover Metro station floors, pillars and train cars with their promotions. The current 10-year contract, which expires at the end of June, brought in $40 million a year.
“I believe this is the best arrangement we can get in this environment,” Metro’s new marketing head, Barbara Richardson, told board members.
“I believe this is the best arrangement we can get in this environment,” Metro’s new marketing head, Barbara Richardson, told board members.
The Metro board of directors had been braced for a reduced advertising contract, as the last one was locked in during the high-flying days of the tech boom. But the board didn’t know the television channel was off the docket. Board member Gordon Linton said he was shocked the agency hadn’t told board members earlier.
Metro had announced the plans for the channel in February 2008 and was still touting it in news releases as of October 2009. A cell phone network is being built in the tunnels to equip the agency so it can run the channel underground.
But advertising companies that would have made The Metro Channel possible pulled out of the running, Richardson said. Metro approved the shorter, three-year contract, with options for up to seven years, so it could try for a better option if the economy improves.
