US gets Txtstation's message

Auckland-based Txtstation will create onscreen text message prompts for American basketball broadcasts

Auckland-based technology company Txtstation has slam-dunked a major deal with US broadcaster Turner Sports, a division of TimeWarner.

Txtstation, which specialises in live onscreen text message promotions, will be featured on broadcasts of NBA basketball games.

The company founded in 2001 by Matt Coleman started out providing services for rugby games and cricket matches on Sky TV. Since setting up a sales and marketing division in the US it has signed deals with regional broadcasters of baseball and NFL football.

But the NBA deal was much bigger because it included the nationwide coverage of games, Coleman said.

Turner Sports has exclusive broadcast rights to the NBA opening night, the NBA all-star game and the 2006 Western Conference finals. The games have regular audiences of 3 million although that can rise as high as 25 million during the finals.

Txtstation creates the framework and graphics to allow quiz questions to be broadcast on screen during the game. Viewers then text the answers back to win prizes. The revenue from the texts was split between the phone company and the broadcaster.

Marketing messages could also be added to confirmation texts that were sent back to viewers and valuable demographic information could be collected, Coleman said.

Live television text promotions are relatively commonplace in New Zealand - featuring on sports broadcasts, news programmes and music shows - but they are still a novelty in the US.

The US was about two years behind New Zealand in the uptake of text messaging and that had allowed Txtstation to grab a market leading position, Coleman said.

"We have got a product over here that no one else has," he said. Txtstation has a patent pending on the system.

The Americans had finally started to embrace texting so the growth potential for the company was strong.

"It has really taken off. There are 6 billion text messages sent each month in the US. Last year that was only 3 billion."

Coleman would not reveal what the deal was worth but said the revenue that would be generated by the NBA promotions was significant.

Three quiz questions will feature in each NBA game. Answering the questions costs US50c per text and about 5 per cent of viewers typically take part in the promotions. That meant there was potential to generate millions of dollars over the course of the season.

Txtstation has a staff of 15, and all the development and graphic design work is done in New Zealand.

Once the graphics had been designed and the system was in place the operation was handed over to the broadcaster so a huge team wasn't necessary, Coleman said.

The company already had "multi-million-dollar" annual revenue and earnings were growing at about 400 per cent a year, Coleman said.

Further international expansion plans meant new capital was needed, and private investment contacts were being sounded out in the US. The company was getting good feedback from US investment banks.

The company has just launched in Canada and is about to launch in Germany and Italy.

Coleman said he had not yet given any serious thought to a public listing.