Franchise Information

Business Model Overview

Starpoint Digital Media Network is an innovative advertising media company within the digital signage narrowcasting industry. 

 

Starpoint currently directly offers advertisers placement in 58 locations across the Southeastern United States.  After a little over two years of growing this business, our team is ready to scale out.  Starpoint’s strategy and pricing have been modified and has thus strengthened Starpoint’s sales strategy and business model.

 

Our company has developed a targeted system of fully managed, real-time accessible high definition display screens placed in the nation’s finest fitness clubs. Our state-of-the-art proprietary technology boasts a 99% connectivity rate and extreme flexibility in messaging, including the ability to customize and update advertisements in real time. 

 

We seek out the biggest and best fitness centers as its partners, with core members who attend more than 100 days per year and who spend an average of 81 minutes at the club each visit. Starpoint, thus, serves a highly-valued demographic: affluent, discerning 18-49 year-olds who are image-conscious and likely to be trusted as word-of-mouth influencers and brand evangelists.   

 

For these enthusiastic health club members, an attractive 42” LCD display with dynamic, useful content provides a pleasant focal point during their workout time, fostering positive brand associations for the advertisers that utilize Starpoint’s growing network. 

 

Starpoint’s play-lists have a beautiful lay-out, no sound, and each one consists of paid advertising (24 ads, expandable to 36 ads), location specific content such as gym class schedules or announcements, feel good messages, trivia questions and answers, community events and quotes.

 

Our advertisers pay a minimum of $99 per month per screen, which includes original ad design, optional weekly ad updates, and optional monthly ad re-designs at no charge. The average advertiser currently pays $125 per ad for a 4 month period.

 

The Franchise Opportunity

 

Starpoint is now offering franchisees an unequalled opportunity to set up and own a digital media network franchise.

 

Use your own selling skills to fill up the advertising spots on your screens; Starpoint will provide you with play-lists including our ad design services; localized content for the screens (gym schedules, local community events, etc...), generic content changing daily (feel good messages, jokes, trivia questions), and more. You will have access to our latest web-based, patented display software. You will start with 10 screens at 10 locations, and as you expand your business, you are able to add as many as you like.

 

YOU SELL, WE DO THE REST!

 

Partner Acquisition

 

Because of our in novative and non-exclusive business model, we have found gym owners to be very amenable to the Starpoint model.  We offer our partners (gym owners) a 20% revenue share and up to 20% of the display time for in-house messaging.

 

Screen Installation and Maintenance

 

Starpoint has developed a display system consisting of an LCD screen,  a media-player and a dedicated internet connection.

 

To ensure that each location is treated with care and precision, we contract with national installation and maintenance companies. 

 

As a franchisee, you will be given access to our Support Ticket system, which is administered through Pegasus.  This will allow you to create a ticket if you ever have a concern or notice an issue with the presentation or the equipment at any of your locations, aside from the tickets that will automatically be generated.  Tickets are automatically created when a location loses connectivity, the television is turned off, the display software shuts down or an error message appears on the screen.

 

The standard under which we operate is that if there is a problem at one of our locations, we will have the issue resolved within four hours.

 

YOU SELL, WE DO THE REST!

 

Our Database

 

Real innovation is found in Starpoint’s proprietary (patent pending) software that controls the internal workflow, including sales, design, play-list assembly, deployment and delivery of advertisements to the gym displays.  Similar to the iPod’s play-listing software, this software allows Starpoint to “automatically” generate a play-list individually tailored to each club, and to monitor delivery in real time.  This real-time content management allows true flexibility for clients, as advertisements, promotions and messages can be changed immediately without any system downtime. You simply enter your new customers to the database and Starpoint will take care of the rest.

 

Sales and Marketing

 

Our sales and marketing process is derived from a model that has shown tremendous success in other industries. This process is a combination of intelligent lead generation, outside sales, and up-selling. The materials and pitch are positioned to ensure at least a 33 percent closing ratio and an ongoing pipeline of prospects, leads, and sales.

 

Target Market: A Shifting Mix of Local and Regional Advertisers

In the current environment, marketers are eager to explore new media outlets, and larger advertising agencies are especially eager to do so for multiple clients.  With the loss of television viewers to TiVo and the DVR, the increasing shift of the radio audience to satellite, and the decline in print subscribers, new avenues for corporate messaging are not simply trendy, they are a business necessity.  Out of home advertising is gaining increasing ground because studies have shown that people are more receptive to messages. 

 

In many ways, the development of the digital signage advertising market will mirror those of cable TV and the internet, with most of the early adopters being smaller companies with smaller decisions to make, and a need to make their message stand out from the clutter.  As these early adopters begin to see success, ad agencies begin to take notice of the medium and national companies will begin to experiment with regional buys.  Industry metrics are still being developed, which has slowed the growth and acceptance, but this process is underway.  In the meantime, Starpoint’s target market will remain a mix of local and regional advertisers.

 

Currently, Starpoint’s mix of advertisers is approximately 75% local and 25% regional.  As the company increases its screen capacity, it expects to increase the number of national and regional advertisers and decrease the percentage of local advertisers.  Looking ahead, an estimated ideal mix when the company has 350 screens available would be 25% local, 50% regional and 25% national advertisers.  Local advertisers will always be an important part of the mix, as it helps anchor the partner clubs in the local community, making the other information more personally relevant to consumers working out in the fitness clubs because it seems tailored to them.

 

YOU SELL, WE DO THE REST!

 

Local and Regional Advertisers

While regional sales are best, as they provide content and revenue based on buys for 5-25 screens (as opposed to local buys which provide 1-5 screens), at this point there must still be a number of local sales in the mix.  Local sales can often be closed more quickly because there are fewer people needed to make a buying decision.  Local sales also promote a sense that Starpoint displays and the health clubs they are in are part of the local community, a feeling of connection that resonates with consumers.  There are several key industries that Starpoint targets for local and regional ad sales:

• Real Estate Agents and Brokers
• Insurance Agents, Brokers and Services
• Upscale Residential Communities, Condominiums and Apartments
• Health & Diet/Vitamins and Supplements Retail and Big Box
• Bicycle Shops and Sporting Goods Stores
• Automobile Dealerships and Maintenance Services
• Motorcycle, Recreational Vehicle and Boat Dealers
• Chiropractors, General Medical and Surgical Centers
• Health and Wellness Related Consumer Packaged Goods
• Cosmetic Surgery, Cosmetic Dentistry, Lasik, Hair Removal/Replacement
• Dining, Entertainment, Jewelry Stores, Travel-related Businesses, and more!

These industries all have a thorough understanding of the necessity of branding, and a particular interest in reaching the demographic audience found in our partner fitness centers.  Because these consumers are more likely to be influencers and engage in word-of-mouth recommendations, reaching them is vital even if they are not currently in the market for the services being advertised.  The services of these advertisers also match the psychographic profile of the fitness club member, who is proud of their decision to lead a healthy lifestyle and wants to maintain a positive image as well as rewarding themselves for their hard work. 

 

National Advertisers

The growth of Starpoint’s network will significantly increase its ability to attract regional and national advertisers.  As boutique marketing ROI and data mining firms spring up, national and global players are more willing to take risks on new marketing tactics, secure in the knowledge that they will be able to determine their effectiveness. Many national and global players have regional marketing departments, and these are Starpoint’s first contact with these companies.  With success and increased screen capacity, regional and national contracts are not far off in the future.  Fortunately, with increased national attention on narrowcasting, out of home advertising and the long tail, global companies have set aside funds for regional and brand-specific advertising through non-traditional methods.

 

As our franchise network grows, the franchisee will be able to benefit from national buys that will be solicited by the franchisor. These national ads will be placed in remnant spaces, and allow national ad dollars to flow to where the national companies would like to place them. They will also benefit from larger regional buys (i.e. the Southeast, Northeast, etc…).

 

Trends Affecting the Target Market

A confluence of several major societal trends is driving growth in both Starpoint’s partner industry (health clubs) and its target market (advertisers).  With the rising rate of obesity and increased government and media focus on healthy lifestyles and preventive care, gym membership is on the rise.  While some companies within the industry may be on shaky ground, the industry as a whole shows a strong growth trend, with the companies with larger market share focusing on growth through acquisition.  As the number of fitness centers continues to grow, so does the number of members.  While there has been growth in every demographic, the largest and fastest growth has come in the older age group demographic, a trend bound to continue as baby boomers retire.  Strong growth in the younger demographics shows that this change is actually accountable for growing the market; it is not merely a demographic shift.  Instead, as baby boomers age and medical advancements extend lifespans, a greater number and range of people see going to the gym on a regular basis as part of their routine. 

 

At the same time, there is a marked interest in non-traditional marketing avenues.  Large global marketers have substantially increased their budgets for innovative advertising solutions, including online, out of home, narrowcasting and “guerilla” marketing.  While guerilla marketing has garnered the most attention, its effectiveness is the most difficult to measure and its reliance on small outside agencies carries significant reputational risks.  The online market is growing, but it is already becoming a mature industry with a few dominant players.  Narrowcasting and out of home advertising remain the strongest prospect for explosive growth in non-traditional advertising.  Non-traditional advertising budgets will continue to grow as the major media markets become increasingly fractured and niche-oriented, and investment in narrowcasting will increase as the industry develops standardized performance metrics. 

 

Increased marketing avenues have led to an environment in which the consumer is bombarded with advertising throughout their day, meaning that marketers must fight against more and more “clutter” to get their products noticed and their messages delivered.  Narrowcasting allows marketers to target exactly the consumers they are seeking, and Starpoint’s choice of locations offers marketers a time and place to deliver their messages that reaches consumers when they are most receptive to receiving these messages.  Starpoint offers advertisers the right medium to deliver their message to a receptive audience that is active, valuable and growing.

 

Several larger players have entered the space recently, with Cisco Systems being one of the largest and most well-known.  Cisco has entered the space as a provider of hardware and software solutions.  Other companies, large and small, offer various levels of bundled services to a variety of target markets.  Major players in new media advertising, such as Google and Yahoo!, have shown an interest in entering this space as well.  The interest of these larger companies in this space provides evidence that this is an attractive market, and acquisition by one of these players is one potential exit strategy for investors.

 

It is required that you use the standard Starpoint Digital contract to confirm sales.

 

Design and Deployment

 

You will have access to our team of designers, who are familiar with our screens, the set up at our gym locations, and the specifications for the monitors, to ensure that our viewers can read the screens and our advertisers will be satisfied with their ad presentation.  State-of-the-art internet connectivity and administration gives advertisers and gym partners complete flexibility.  Customized specials, promotions, or new product announcements can be deployed and displayed rapidly.

 

Once a New Order Form has been entered to our database, the new advertiser’s information will automatically show up on our designer homepage.  This alerts the design team th