SBJ/September 30 - October 6, 2002/This Weeks Issue
Princeton Video, with Cablevision cash, switches marketing focus to sponsors
Published September 30, 2002
A new management team at Princeton Video Image Inc. says that a fresh strategy, backing from Cablevision and profits from its Latin American subsidiary should be enough to keep the company going, but an additional $15 million to $20 million in financing wouldn't hurt, either.
James Green, who joined the virtual advertising company three months ago as president and COO, said PVI is in no danger of going out of business and is becoming less of a technology provider and more of a "media services" company, marketing its product directly to sponsors.
"The way the company used to be positioned, we would allow the use of the technology for whatever people wanted to do," said Green, who started the Internet ad-serving company Sabela Media in 1997 and later sold it for $75 million. "Going forward, we'll allow you to use the service for free but take a percentage of the advertising revenue generated."
Former Turner Sports head of sales Keith Cutler recently joined the company as executive vice president of sales and marketing to lead those efforts.
Seasoned sports executives Mervyn Trappler and Lon Rosen also joined the company this year, although there were far more subtractions than additions. PVI laid off about 25 percent of its worldwide staff, which had numbered more than 150.
PVI's quarterly financial statement filed in August said there was "substantial doubt" about the company's "ability to continue as a going concern" and its future depended on new financing.
Cablevision Systems Corp., already a major shareholder in PVI, made an additional $5 million investment in June. Green said he hopes to raise $15 million to $20 million from investors to avoid future layoffs, but the company would be able to pare further if the financing did not materialize.
Making the money raising more difficult is the decrease in PVI's stock price, which dropped from a high of $3.60 a year ago to less than 70 cents last week. The company lost $3.5 million during the second quarter and $8.5 million for the first six months of the year.
Green said that the picture has improved since those documents were filed and that the company's Mexico division is a moneymaker.
Through its affiliation with Cablevision, the company hopes to provide virtual advertising to MSG Network and other regional cable networks that Cablevision operates. Cutler said PVI is actively trying to get pro sports leagues that don't allow virtual ads in game broadcasts to reconsider.
"We're simultaneously talking to the NHL and the NBA," he said. "The message we're getting from the leagues is that [using the technology on a] local level is a good way to test it."