Release is On/Q

ON/Q, an independent multimedia company located in Montreal, will unveil its first consumer compact disk product containing advertising later this month.Lee Turner, head of sales for ON/Q, says the CDs, part of a planned series on travel called Destinations, will carry...

ON/Q, an independent multimedia company located in Montreal, will unveil its first consumer compact disk product containing advertising later this month.

Lee Turner, head of sales for ON/Q, says the CDs, part of a planned series on travel called Destinations, will carry ads by an array of travel-related companies.

The company plans to supply the CDs, for a modest rental fee, to travel agents across North America as part of a turn-key package that includes use of a CD-i (or compact disk interactive) player, made by Philips Electronics.

The travel agents would then make the players and CDs available in-store for viewing by potential customers.

ON/Q will also sell the cds to the public, both via its in-house direct marketing division and through a distribution agreement with Philips Interactive Media, the software distribution arm of Philips.

Turner says yet another distribution channel will be CD rental companies such as Blockbuster Video.

on/q is in the process of putting the finishing touches on its first two Destinations programs: Destination Great Britain and Destination France.

Each program comprises a set of five cds. The individual CDs each focus on travel in a different region of the country.

Three more five-cd sets are already in the works – Destination Switzerland, Destination Italy and Destination Netherlands – and Turner says on/q plans to keep on going until it runs out of countries to feature.

Eventually, on/q hopes to produce the cds in a variety of languages and market them in countries around the world.

Each cd consists of four to five hours’ worth of original and stock audio, video, still photos, text and graphics.

Turner says Destinations is designed to be a legitimate travel program, not an advertorial or infomercial.

‘Think of it as coffee table books delivered through the tv set,’ he says.

‘This is going to attract a lot of attention. This is the first consumer cd product in the world with so much advertising content.’

He estimates the amount of advertising on a disk would represent about 5% of the total information contained therein.

The advertising will appear in a variety of forms, including ‘brought to you by’ supers worked into the list of contents and elsewhere, and product shots and/or company logos incorporated in the body of the program.

Additionally, the non-linear nature of the cd platform will permit viewers to click on icons to open electronic ads that might take any form from text-only to full-motion video with audio.

So far, KLM Royal Dutch Airlines is the only advertiser to have signed on with Destinations.

klm has been named a lead sponsor of the Destinations series in Canada and is the exclusive airline sponsor in that market.

But Turner says interest is ‘extremely high’ among many advertisers in the other major sectors of the travel industry, including car rental firms, hotels, credit card and travellers’ cheque companies.

Explaining why only one sponsor has signed on to date, Turner says he has been holding off pushing the program until key distribution details have been nailed down.

Essentially, on/q is trying to construct a network of travel agents to guarantee placement in about 12,000 retail locations in North America.

on/q’s strategy in marketing the program to advertisers is to offer performance guarantees based on the number of consumers’ impressions each disk will generate.

Turner estimates the network, which he hopes to be fully operational by 1996, ‘will deliver three million impressions per country.’

Ad packages offer category exclusivity in any set of two cds or boxed set of five cds.

The 30-second ad rate for the two-cd set ranges from US$5,000 per cd (sound and full-screen still video only) to $26,000 per cd (full screen full motion video.)

For a yet-to-be-determined monthly fee of US$25 to US$35, travel agents would receive use of a cd-i player with full-motion video capabilities and a monitor, valued at about $1,000 in retail stores, as well as a regular supply of Destinations cds.

Turner says travel agents he has spoken with have overwhelmingly supported the program.

He says on/q, which formed in 1985 with a focus on corporate interactive programming, has already invested $750,000 of its own funds in developing the consumer interactive project.

To finance the necessary investment in cd-i hardware as well as further software production, on/q is seeking a listing on the Montreal Exchange and hopes to make a public share offering by June.

Destinations will be officially introduced to the travel industry at the Focus on Automation travel trade show, to be held April 24-26 at Westin Harbour Castle in Toronto.

on/q is aiming to launch the agency network as soon as financing and distribution details have been finalized.

As far as cd sales to the home market are concerned, Turner says the market’s potential will grow as the number of households with cd-i players continue to expand.

About 350,000 households in North America have cd-i players, but the number is expected to mushroom in the next few years.

Turner estimates each Destination set could achieve annual sales of 350,000 to 500,000 in North America by 1996.

In other news, on/q signed a joint venture deal March 21 with Fish’n Canada to produce a series of interactive cds on sport fishing.

Fish’n Canada is a popular fishing show broadcast on 45 tv stations across North America.

The company recently converted its consumer magazine, Fish’n Canada News, to a video format called Magavision.

Under the joint venture, on/q will now convert Magavision, which is sold in 2,500 retail locations in Canada, to an interactive cd format entitled Discover Sport Fishing (Magavision:CD-I). The cds will carry interactive advertising.

Angelo Viola, co-founder of Fish’n Canada and one of its hosts, says ‘we know the public is not ready for Magavision: CD-I yet. But we want to spend the next year working out the bugs so we’re ready when the time comes.’