Time called on digital billboard

The lights have gone out on Australasia's first digital billboard, with a split between partners putting the company behind it into liquidation at the end of its closely-watched trial run.

The giant LED screen that lit up the corner of Fanshawe St and Halsey St was turned off two weeks ago, awaiting the outcome of an application to the Auckland City Council which had granted the billboard a six-month trial in September.

But the council said yesterday the application had been withdrawn, while companies' office records show a liquidator was appointed to its owner, Digital Light Solutionz, on February 23.

Liquidator Gareth Hoole, of chartered accountants Staples Rodway, said the company had been a joint venture between US and New Zealand partners.

"There was a difference of opinion as to how this business would be operated," he said. "There was some discontent among the shareholders and it was felt that liquidation was the obvious way to resolve the issue."

The dispute seems unlikely to end the brief history of the digital billboard in New Zealand. Digital billboards dominate the landscape in cities like Tokyo and high-profile locations such as Times Square in New York, or Piccadilly Circus in London. But such boards - variously branded "street TV" and "digital paper" - had previously not appeared in this part of the world, and the busy downtown location of the Fanshawe Street billboard brought with it concerns about driver distraction as well as complaints about visual pollution.

The trial was being closely watched by the marketing industry, because the Auckland council's response was considered crucial to establishing a future for the medium. "Sydney and Melbourne's councils will watch this closely," said one Australian digital signage specialist.

Auckland city councillor Glenda Fryer said the council had been unable to assess its response to the billboard, because the application had failed to proceed. "However, I can say generally there are a lot of billboards in Auckland City ... we are acting to reduce the visual clutter for motorists, who get distracted," said Fryer, who heads the planning and regulatory committee.

The council had not seen a report prepared for the applicants on the impact of the Fanshawe St billboard on traffic and, while there had been a few complaints, there had also been some support for the idea.

"On a personal level, while I think they add excitement to a city, I think we need to be careful about the safety of motorists," said Fryer.

A spokesman for the local participants in Digital Light confirmed the application for a resource consent had been withdrawn, but would not discuss what had happened to the company. He cited commercial sensitivity for his silence, but indicated hopes for a national network of digital billboards were not yet finished.

"These plans aren't dead ... stay tuned," he said.

Sources said there were plans to remove the billboard from the Fanshawe St site and a new consent application was believed to be in the works. The American investors in Digital Light had provided the screen itself, but the locals claim it is their technology that is crucial.

The liquidator, Hoole, said the company's major asset was the screen.

"I have had some interested parties make contact with me to offer to buy it, but I can't say who they are or how much they offered," he said. The council had agreed to wait before either demanding the resource consent be reinstated or the board removed and he now had three options.

"I might sell it to someone who takes the screen away completely, I might sell it to someone who seeks to reinstate the application, or I might have to make an application to the council to reinstate the consent and sell it as a going concern," he said.

His primary concern was to realise the greatest value for creditors - which in this case included the ANZ Bank.

Fanshawe St had originally been planned as the first of seven high-traffic sites for Auckland, among them sites on Queen St, in Ponsonby and at the Aotea Centre.

The first site's 5m by 4m LED screen could be turned to face morning or afternoon traffic flows playing ads at seven-second intervals. The billboard's operator, Isite Media, said the trial had been a success from a sales perspective, attracting clients such as Telecom, Air New Zealand, Westpac and Toyota.

"A number of these clients were wanting to continue," Isite general manager Paul Kenny said.

"Having a giant TV screen while sitting at the lights is killing dead time ... I think there's definitely a market for it."

He said the research report had shown there were no extra accidents at the intersection occupied by the first billboard compared with the six months before its erection.

If Auckland turned down any application, Wellington and Christchurch were to have been considered and indications from other councils such as Waitakere and Manukau had been favourable. "Obviously advertisers would like to end up having a network where they can play the same ad in different centres."