April 8th, 2005

Subways Tune in to New Revenue

By Larry Copeland
USA Today

Subway riders here soon will be able to watch television and
hear piped-in music in a first-of-its-kind venture designed to raise money for
the city’s cash-strapped transit agency.

A television plays on a MARTA train as Astride Justin from Norcross, Ga., tunes
her radio to the first TV and radio network for rail riders.

The Rail Network, a private company based in New York, is installing five 15-inch,
flat-screen televisions inside each of 100 rail cars and eventually will put
them in all of the Atlanta system’s 338 cars. Later this spring, trains will
feature updated news programming in English or Spanish from Atlanta’s ABC affiliate,
as well as three music channels.

Passengers will have to bring their own headsets. Televisions will have closed
captioning, and audio will be available only through FM radios and FM-ready
cell phones.

The Metropolitan Atlanta Rapid Transit Authority (MARTA) expects to generate
$20 million over 10 years in advertising revenue from the deal. That’s a small
part of MARTA’s $316 million operating budget and is unlikely to delay a proposed
one-way fare increase from $1.75 to $2.

But for today’s transit agencies, every little bit helps. David Lane, CEO of
the Rail Network, says company officials have met with "every major transit
system in North America" and received indications of interest from all
of them.

He says the transit agencies in the Washington, D.C., area and in Vancouver,
British Columbia, have requested proposals from companies to modify rail cars
for the TVs.

Systems get on board

Most of the nation’s transit agencies are facing deficits and struggling to
get back in the black while holding fares as low as possible. Several are turning
for help to televisions on the trains, tapping into a relatively captive audience.
The concept is similar to elevators in office buildings that feature TV screens
offering news updates and advertising. Among the cities looking at transit TVs:

•Washington, D.C. Metro, the capital region’s public transit system, is
planning a two-year pilot program with a private company that will install TV
monitors on two six-car trains and 25 buses. "The video monitors would
display news, weather, sports, transit authority information and ads,"
says Metro spokesman Steven Taubenkibel, who won’t identify the firm. Taubenkibel
says that over two or three years, the video monitors — along with new
advertisements in subway tunnels and ATMs in stations — are expected to
generate "a couple of million" dollars. The Metro budget for the current
fiscal year is $943 million.

•Denver. The Regional Transportation District is studying Atlanta’s experiment
to see if it could work in Denver. In February, the district approved a pilot
program to install 19-inch screens and speakers on some buses and light-rail
cars. But the agency was unable to agree on a contract with the provider of
television programming, assistant general manager Tony McCaulay says.

•Boston. The Massachusetts Bay Transportation Authority, facing a $10
million deficit next year, announced a plan last month to install television
screens in subway cars on three lines within a year. The agency says the plan
could generate $3.5 million a year in advertising revenue.

More transit systems are likely to follow suit, says Bill Millar, president
and CEO of the American Public Transportation Association, which lobbies to
improve public transit. "Pressures on governmental budgets have been building
over the years, and transit systems have been seeking sources of revenue so
they can keep their fares low while maintaining the tax revenues necessary to
run them," he says.

While subway TV appears to be a new concept, Orlando pioneered TVs on buses
several years ago, Ruskin says. The Orlando transit system, nicknamed Lynx,
now has them on 162 of 238 buses, spokesman Brian Martin says. The audio is
broadcast through the speaker systems of the buses, but he says few passengers
have complained.

Using technology it invented, the Rail Network televisions will provide subway
riders with news and advertising programming that is updated throughout the
day. "The passengers will get content that is relevant to them," Lane
says. "They’re going to see what they would see at home while they’re riding
in that rail car."

But viewers at home increasingly have ways to avoid TV and radio advertising.
Systems such as TiVo and older technology such as videocassette recorders allow
people to fast-forward through ads to watch their favorite shows. Commercial-free
satellite radio is increasingly popular.

Public opinion

Commuters on subways have no such options. Even if they don’t have headsets,
they will be exposed to the video — an idea that doesn’t thrill every passenger.
During public hearings on Washington’s plan, "some people were concerned
about the video monitors intruding upon the quiet of the buses and trains,"
Taubenkibel says.

Despite assurances from transit officials here and in Boston that their systems
will be silent, television on the subway is "a bad idea for a lot of reasons,"
says Gary Ruskin, head of Commercial Alert, a group based in Oregon that opposes
commercialism in government.

"First, people shouldn’t be forced to watch ads," he says. "This
is part of the advertising industry’s trend toward coercive advertising. The
ad industry is so unpopular, they think they have to force people to watch ads.
Second, those (rail cars) are civic spaces that are used to discharge civic
duties like read the newspaper and do homework."

Commuters in Atlanta — MARTA has about 225,000 rail riders a day and another
225,000 bus riders — are taking a wait-and-see approach.

"I think as long as there’s news being presented and people can have access
to educational content, it’s probably a pretty good idea," says Marselle
Harrison-Miles, 31, getting off a train at the Hamilton E. Holmes MARTA station
in west Atlanta. She says she’ll ride MARTA "a lot more now that gas is
going up."

Marcus Snell, 35, a valet parking attendant at Emory University Hospital in
Atlanta, says he usually brings a compact disc or digital music player for his
commute. "I’m into music," he says. "So it really won’t affect
me. If it’ll help them raise money and keep fares low, I’m fine with anything
that keeps money in my pocket."

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