Diamond Communications Goes Outdoors

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billboard-37080__180There’s a sign up ahead towercos.  It says more competition is down the road.  In fact the sign IS the competition.

Major billboard company, Outfront, has made a deal with Diamond Communications, one of the largest privately-owned tower companies in the U.S. In the agreement, Diamond will provide Outfront information on how to offer data services on existing billboards, a long-term investment move that could add an entirely new revenue stream to the advertising apparatus along our nation’s highways.

Seeking Alpha noted that due to the agreement, Outfront was able to make another deal, a first for roll out data services for billboards with IoT company SigFox. Seeking Alpha revealed multiple positives for both data companies and billboards for partnerships in the future. 

1.Adding data services to existing billboards would be low cost to data companies, as equipment is owned by the telecom provider, who would be leasing the space.

2.Billboards are already there, so it would be a recurring revenue stream for billboard companies, with a high return on investment with almost no additional capital required other than marketing and development costs.

3.Billboards are usually in prime locations along high-traffic data usage areas.

4.Billboard companies are similar to telcos, with “long lived assets in which they generate fees from selling services associated with those assets.”

5.Billboard companies have high barriers to entry, low capex and location based differentiation.

6.Billboard companies are different from telcos in that they “have a much shorter counterparty lease period,” while tower companies’ leases often are multi-year deals, making the tower model “attractive from a certainty of cash flow, lower sales and marketing costs.”

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