It’s been more than a year since many Americans have sat inside a bar or restaurant, casually watching a silent TV play in the background. But as the nation recovers from pandemic lockdowns, one startup is raising money to capture patrons’ attention upon their return.
Atmosphere TV—a streaming platform that provides a range of audio-optional content supported by subscriptions and advertising—has raised a $25 million Series B round from Valor Equity Partners at a new valuation of $275 million. The funding comes less than a year after a $14 million Series A round in April 2020, just weeks after state and local lockdowns went into effect.
While Atmosphere streams through Apple TV devices, the company got its start with Roku, offering thousands of bars and restaurants a chance to stream ambient content for free, rather than through cable for a fee. Meanwhile, advertisers could buy ad placements directly based on location and channel selection to help them reach their target audiences.
Since spinning out of Chive Media Group—best known for its ChiveTV, which now lives as a channel within Atmosphere—in 2018, the Austin-based startup has expanded to more than 50 channels, along with branded content from companies like Red Bull and GoPro.
ChiveTV got its start in the viral video space, but the company didn’t want to stay there. Cofounder and CEO Leo Resig says the move into venues was partially due to “seeing our peers get burned and us getting burned by the platforms like YouTube,” as platforms like Facebook and Google could change a company’s distribution on a whim.
“We didn’t try to compete for in-home eyeballs,” Resig says. “There’s just no way we could be a contender as a standalone (over-the-top streaming) app, but what we did was we provided Roku sicks to thousands of bars.”
Because Covid-19 restrictions forced bars and restaurants to shut down to varying degrees for much of 2020, Atmosphere has spent the past year pivoting to places that people have continued to frequent: auto repair shops, medical offices, veterinary clinics and dentist offices. In the process, the company doubled its customers to 13,000 with plans to add another 20,000 this year for a total of 30,000 by 2022—up from just 2,000 in 2018.
Atmosphere TV, founded by Leo and John Resig, has raised $25 million.
AtmosphereWhile Atmosphere TV says it now reaches 17 million people per month in the U.S. across its network, the goal is to reach 50 million by the end of 2021. On the advertiser front, there are 100 direct advertisers and thousands that reach Atmosphere TVs through programmatic media buys.
Now, Atmosphere hopes to go beyond viral content and into audio-free news, recently hiring Blake Sabatinelli, the former CEO of Newsy, to create the division as COO with a goal of getting into airports, hotels and college campuses. The funding will help build out that division and also to expand Atmosphere TV’s national sales teams.
“Our mantra is distribution at all costs,” Resig says. “We need more audience reach. We need to be the elephant in the room. We need to be a must-buy. People forget that not long ago Snapchat was a teen sexting app…when you’re too big to ignore, the media buys come.”
Valor, which invested an initial $5 million in Atmosphere last year, has been impressed by its growth and decided to move the company into its growth fund. Jonathan Shulkin, a partner at Valor, describes Atmosphere’s ability to grow distribution even during the pandemic as “highly odd.”
“I would liken it almost to the Instagram of the physical world or something along those lines,” he says. “You’re not only building an out-of-home advertising network for companies that haven’t already head it and they own much of the content. But because you know the customer base in these different modalities where the screens are placed you have the ability to target people in a way that has never been done in the physical world.”
While some venues choose to run their own house ads—a dentist, for example, might run ads for teeth whitening, while Texas Roadhouse, a client, might run ads for new specials—others use Atmosphere to reach competitors.
“Our mantra is distribution at all costs. We need more audience reach. We need to be the elephant in the room. We need to be a must-buy.”
One of Atmosphere’s venue clients, Hooters, has installed Atmosphere TV in all of its 200 corporate locations and in around half of its U.S. franchises. Hooters is also an advertiser, with a six-figure spend across Atmosphere’s network. It’s using its ads to target competitors like chicken wings chains, sports bars and taverns, along with mechanics shops, hotels and gyms.
“To be specific of what that does for the customer experience is it gives users and guests another reason to stay a little bit longer,” says Mike Beauchamp, director of digital marketing at Hooters. “There’s something to that while they’re finishing up a beer or waiting on their check, it’s something else to see that they don’t see anywhere.”
Michael Leger, Head of Connections Strategy & National Media for Anheuser-Busch’s Brewer’s Collective, saw the attraction of ambient TV back in 2017. He recalls being at a hotel bar in Tempe, Arizona, where everyone was glued to the TV screens.
“It was just these little clips of satisfying video after satisfying video,” Leger says. “And I walked up to the bartender and said “Hey what is this?”
The bartender told him that whenever there wasn’t a major sports game to air, she Googles “10 hours of satisfying video.” And a few months later, he heard about Atmosphere TV which was still in development. And the next year, they began working together on beta tests for Goose Island. Those tests performed well, and ABI has now expanded to using Atmosphere for other breweries in its portfolio. According to Leger, says some test campaigns have shown a 16% lift in purchase intent which was 10 percentage points higher than a typical OTT pilot. It’s also cheaper than other types of streaming TV ads, which have had CPMs skyrocketing especially this past year.
“Once I found that you can do creative down to the individual bar or on-premise, but you can do specifically to a TV inside of a bar,” he says. “If I have a tap handle of this beer on this side of the bar and then there’s a back back with this handle, I can give each one a message on the TV. That’s when the wheels started turning.”
Meanwhile, spirits conglomerate Brown-Forman has been using Atmosphere to advertise its Jack Daniel’s whiskey. Working with the media buying agency Spark Foundry, it ran a pre-pandemic responsibility campaign, offering discounted ride-share fares, and last year worked with BBDO to run ads for its “Make It Count” campaign.
Jeff Cole, Brown Forman’s modern media director for North America, says it’s useful for targeting people with beverage ads while they’re in a bar to help influence what they might want to buy. He says other Brown Forman brands advertising with Atmosphere have found that accounts that didn’t use to carry a product started to afterward. Asked where it fits within the brand’s budget, he says the company has had some internal discussions about whether it is OOH or something else. That’s also led to discussions about the type of creative used, too.
“The funny thing is it’s not unlike some challenges that we have in social,” he says. “Within Facebook or Instagram, if you’re running video, a great deal of the time, audio is not running...now you’re going into an environment that, generally speaking, is a loud, busy and fun, and the TV is not gigantic, but there might not be any audio. So for us it’s created a great opportunity for how do we present that experience.”
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April 23, 2021 at 02:01AM
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Atmosphere TV Raises $25 Million To Stream Silent Ad-Supported Content In Bars And Dentist Offices Across America - Forbes
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