IPO Hopeful 7 – Only Option in Google?

Continuing from the last post, Kevin asked, “Do you know how in-room movie services were first introduced to hotels? The exact same playbook. They provided free hardware (TVs) and then split the revenue from movie rentals with the hotels. That’s how it took off. In the first year, only one major hotel chain adopted it. By the second year, any hotel with a bit of scale had to have it. By the third year, it wasn’t even optional—if you didn’t have it, you couldn’t compete. The same logic applies to our tablets.

We’ve already signed agreements with the top hotel chains. In densely populated cities, other hotels won’t have a choice; it’s inevitable within the next two years. This battle is already won, even though most people don’t realize it yet.”

I said, “This is seriously brilliant. You’ve essentially turned every hotel room into a billboard, or better yet, mass-produced billboards inside hotel rooms overnight. Your product directly connects brands with consumers who have both the money and the will to spend, right then and there. I genuinely believe your largest revenue source will be national and global consumer brands, as well as local businesses and independent brands-all from advertising. I’d even argue that the latter is more valuable because they deliver the greatest relevance to tourists and diversify ad revenue sources, reducing the risk of relying too heavily on a few major sponsors. How are you managing to tap into that segment?”

Kevin replied, “That’s a conversation you need to have with Terry.”

I asked, “Who’s Terry?”

Kevin smiled. “We couldn’t recruit Terry until we locked in Hilton, because he’s one of the top media buyers in the advertising world. This guy spends billions annually on ads for his clients. Before we had the scale, there was no way to bring him on board. It took us nearly a decade to complete the pilot phase, but once Hilton signed on and we reached the point of rapid tablet deployment and ad expansion, he finally agreed to join us.