• by Charlene Weisler , Op-Ed Contributor, April 28, 2010

Derek White, president of The Hotel Networks as well as an officer of LodgeNet, has a unique position in the industry. His company sits on a vast amount of out-of-home set-top-box data that is only now being explored for audience measurement purposes. In his interview with me, Derek talks about the consolidation of the data and the formation of metrics, the business proposition of Hotel Networks in the media landscape, iTV and out of home, as well as some future predictions.

Below is an excerpt from the interview. Direct links to the full interview videos can be found at WeislerMedia blog.

Charlene Weisler: Derek, can you tell us a little bit about The Hotel Networks and LodgeNet?

Derek White: The Hotel Networks is currently in in over 1.2 million hotel rooms, reaching 20 million plus guests each month. It started out as primarily a broadcast platform where there was commercial insertion in the place of national ads and local ads on major cable channels. But we have been trying to take it much further now, with more interactivity into the systems, and set top boxes that LodgeNet owns in hotels -- and even overlay some promotional elements in some other areas of the hotel.

CW: With the set top box data that you are collecting, do you own the boxes? Are they proprietary boxes like TiVO boxes?

DW: LodgeNet over the years has invested over a billion dollars into the hotel infrastructure and there are headends in each of the hotels that are a combination in many cases of LodgeNet ownership and the hotel ownership. Hotels are a very complicated animal, because you've got big brands and management companies -- Starwoods Hiltons, Marriotts -- and then you've also got behind them the actual owners, which are often private equity companies or big investment groups. So there is a lot of complexity to the actual structure of that. But LodgeNet's initial model was to put in the equipment for free and own that, then make revenue off of that, the equipment, the TV, the interactive system and then share that back with the hotels.

CW: Have you started to analyze the set-top-box data? Can you speak about what you have found so far from the data?

DW: Yes. We have been trying to push the use of the set-top-box data into the research. We are Nielsen-metered, so we are giving the broadcast buyers and planners the data they are used to receiving. But we've noticed that there are discrepancies between the data coming from meters, which is a relatively small sample size, and our set top boxes, which we have in every room.

We have a research group that does nothing but analyze all the behavior in rooms and we are constantly tweaking and adjusting things that we are doing for ourselves in terms of how we use the promo channel. We are using the welcome channel and other channels to draw people into movie viewing, music and some of the things that are more guest-paying areas of the business.

We take that intelligence and now apply it to outside advertisers and sponsors. We are just looking at something right now -- NHK -- which is the Japanese equivalent of the BBC. They are channels that are now being distributed through a portion of the hotels and they are interested in which types of programming are the guests really watching. How long do they stay? What are their entry points or end points? How does that vary by hotel chains -- more affluent ones versus less affluent ones? So we are crunching all those numbers and reporting those back to them now.... [And] they will make some programming decisions and promotional and advertising decisions based on that information.

CW: What are your views on guest privacy?

DW: We are always very careful about privacy, so everything is aggregated. There is a wall between the guest information in terms of knowing who stays in that room and any information that comes out of that room. We have a history of being very careful about that.