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May 29, 2000
Small Firm Focuses on Big Picture
With Giant Electronic Billboards
By GREN MANUEL
Staff Reporter of THE WALL STREET JOURNAL
Lighthouse Technologies Ltd. has created mammoth screens -- the type
used in stadiums for sports events and concerts -- for 25 countries since its
start in 1997. Its turnover has sailed from $9 million in the first year to $24
million last year. Now the company has its eye on the market for giant
roadside screens used as e-billboards, capable of changing their message
by the minute as driver demographics change.
The firm (www.lighthouse-tech.com) thus far
has supplied only two small e-billboard
installations, one in the U.K. and the other in
Canada, but it sees big potential in the nascent
market. Currently it is supplying its screens to an e-billboard network being
built by International Business Machines Corp. and World Theatre Inc.
The companies plan to start rolling out their e-billboards in the next few
months.
Of course, it remains to be seen whether the e-billboard market will take
off. But Lighthouse's biggest competitor sees major potential in the field:
According to Gary Nalven, president of Montreal-based SmartVision Inc.,
"the market for these things is just exploding."
In fact, that's precisely why
Lighthouse's rivals aren't
likely to let it dominate the
market without a fight. Sony
Corp. and other giants,
which have turned their
attention away from the
giant-screen market, may
yet return to the fray, too.
Still, the fast-growing firm is
putting together an impressive resume. Events using the company's screens
range from this year's Oscar awards in the U.S. to the 50th anniversary of
the founding of the People's Republic of China. In addition, the firm
supplied its technology to Pixel Displays Ltd., a U.K. firm that created the
world's largest digital arts installation, a giant curved video screen covering
four stories of a nightclub called "home" in London's Leicester Square.
"We believe we have to get the company to $100 million as quickly as
possible," says the company's ambitious chief executive, Tony van de Ven,
who estimates this year's turnover at $38 million. "At this level we are able
to play in the market."
Just five years ago the market for giant video screens was dominated by
Sony, with its JumboTron brand. There was also some competition from
Mitsubishi Electric Corp. and the Panasonic brand manufactured by
Matsushita Electric Industrial Co.
Then a technological advance came along that enabled people to make
screens that were bigger, brighter and more reliable than the old kind. The
old screens were made by taking conventional TV tubes similar to those in
a domestic TV set and stacking them in large arrays. The new technology
allowed companies to make screens by arranging huge quantities of red,
green and blue light-emitting diodes, or LEDS -- the little lights often used
to show that a TV or stereo is plugged into the wall. Red and green LEDs
had been around for years, but the blue LEDs were new, and provided the
key to making the brighter, better screens. Lighthouse and a handful of
other small firms latched onto the LED format, allowing them to become
players in the giant-screen field.
"It was a classic example of a disruptive technology," says Mr. van de
Ven. "They [the Japanese firms] were at the end of the technology curve."
Sony spokesman Gerald Cavanagh concedes that "with the advent of the
LED format and intensifying competition, we have lost some market share
in this field." Sony, which now uses the LED format, doesn't disclose
turnover figures for its JumboTron unit, he says.
No analysts track the industry, so there are no independent figures on
market share. The most-high profile player in North America is
SmartVision. Another early adopter of the LED technology, it was
SmartVision that installed the breathtaking nine-story screen for Nasdaq
that overlooks Times Square in New York.
While the new players scrap with each other, SmartVision's Mr. Nalven
says Sony has almost disappeared from the market: "For a company the
size of Sony, it's such a small business. They aren't going to go in and fight
like we do," he says.
When Mr. Van de Ven realized the implications of the blue LED, he was
working as a technical director for a firm in the U.S. that earlier had bought
a display company he started himself. He realized that the window of
opportunity with the blue LED would be open only briefly.
He then met Jimmy Lo, a Hong Kong marketing manager, at a trade show
in the U.S., and six months later they opened their doors, with Mr. Lo as a
fellow executive director concentrating on the marketing, while Mr. van de
Ven focused on the technology.
Initially the business funded itself. But in mid-1998, a supplier that had
agreed on an exclusive deal with Lighthouse for the crucial blue LEDs
came up with an even better blue LED, and wanted firm orders to continue
the exclusive deal. To help fund its expansion, Lighthouse sought an
outside investor, and a local electronics firm took a stake.
Mr. Van de Ven got his start as a 19-year-old in Australia with two years'
experience fixing TVs. He was working for a company that wanted to
import screens with a rolling message, used typically by sandwich shops to
tell customers the day's special. "I made one up on my kitchen table, and
gave it to a friend of mine," he recalls, "and we sold it that same evening.
Two weeks later I gave up my job." He has been working in the display
business ever since.
Now his company has its eye on the market that could change the face of
the world's highways: e-billboards.
"Billboards are the toughest market. They need the highest performance,
they stand in the worst weather and they need the lowest price. But that's
what technology is all about," Mr. van de Ven says, adding, "We must get
four or five calls a week from people who think that they have thought of it
first."
"Forget about moving video on highways," Mr. van de Ven says. "That is
fraught with difficulties. But the idea that you could put a billboard up at a
certain time, to a certain audience, is very powerful."
A key threat, Mr. van de Ven admits, is that another technology may arrive
that will do to him what he and his rivals did to the Japanese giants. The
other peril would be that by driving prices down, the new players will
expand the market until the Japanese giants decide it is worth getting back
into, selling below cost to win market share. So far there are no signs of
this, he says. Sony, for its part, says it never left the market and has no
intention of doing so.
Write to Gren Manuel at gren.manuel@awsj.com |
