Molson Coors, Diageo Invest in Video Network

Canada's Bar Channel Allows for Customized Ads

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CHICAGO (AdAge.com) -- Molson Coors Brewing Co. and Diageo are pouring some Canadian ad dollars into a fledgling video network that broadcasts directly to bars.
Bar Channel picks up the startup costs for its monitors and related equipment, and, in return, it takes most of the advertising time for itself.
Bar Channel picks up the startup costs for its monitors and related equipment, and, in return, it takes most of the advertising time for itself.

The Bar Channel, a venture in the Great White North, broadcasts programming via closed-circuit internet to subscriber bars that it provides TV-style monitors. After launching in April, the network grew to 88 Ontario bars and about $600,000 in first-year revenue, and it expects to add 50 establishments in Calgary and 50 in Ontario during the coming year.

Share gains
Despite the modest scale, the Bar Channel already has attracted a low six-figure investment from Molson Coors. The brewer is intrigued Bar Channel's ability to let it customize messaging at each bar, which gives it the ability to emphasize drink specials, or even show employee-training videos during slower hours.

"We've seen share gains in the bars where we've used it," said Terry Rudiak, who manages national sales for Molson-Coors in Canada. "So we're pretty excited about where this can go."

One reason the network is growing quickly is that it picks up the startup costs for its monitors and related equipment, and, in return, it takes most of the advertising time for itself. (Bars are permitted to sell about 10 ad slots per month, at a recommended fee of $300 apiece.)

Messages to customers
In addition to that revenue, bars get a messaging tool to reach customers and employees, said Bar Channel CEO Jeff White. Each monitor features the Bar Channel's programming, short clips of bloopers, extreme sports, scantily clad women and other standard bar fare, set inside a rail that flashes local information, the bar's name and logo, sponsor logos, the local time and weather, and whatever message the bar wants to send to its customers.

While that programming may have a hard time competing with, say, Hockey Night in Canada, it's more effective during the many hours bars are open and live sports aren't on. "You've got your own channel," he said. "That's more compelling than straight signage or another neon."

U.S. potential
Between the two-minute Bar Channel "programs," customized ads fill the screen. Diageo, for instance, has chosen to promote its Smirnoff Ice drink in some bars, but it will promote Guinness in Irish-themed locations during the run up to St. Patrick's Day. Other advertisers include the Ontario Lottery and Universal Pictures.

Both Mr. Rudiak and Mr. White say they see potential for the Bar Channel -- or something like it -- in the U.S., although neither predicted when that might happen. But the interest clearly exists on this side of the border.

Chris Gibbs, VP of the group presenting the Digital Signage Expo in Las Vegas that will run Feb. 27-28, said there was so much interest in bar-related technologies, including the Bar Channel, that it is opening its trade-show floor to attendees of the Night Club and Bar Show being held at the Las Vegas Convention Center at the same time. "You can customize [the Bar Channel] for different demos, you can customize it for different dayparts, and you can make it locally relevant and current," said Mr. Gibbs. "That's a very appealing."
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