L.A. Firms Helping Subway Create Hoagie Hit Parade

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Customers will be able to groove to Subway Radio tunes while they decide whether to go with roast beef or the tuna, thanks to partnerships the giant sandwich chain has struck with two L.A. media companies.


Subway has contracted with Pasadena-based Private Label Radio (PLR), a division of DMI Music & Media Solutions, to provide in-store radio programming. The station will feature adult contemporary music, with some regional preferences (country music in the Southeast, for example), interspersed with Subway commercials. “Between songs you might hear a message about a new chicken sandwich, but the idea is that it’s one continuous program,” said Rob Walker, general manager of PLR.


PLR also handles in-flight radio programming for Air Force One, Air Force Two, and United Airlines.


Subway tested the program in February in Los Angeles, the chain’s largest market with 350 stores, and recently announced it will roll out the program nationwide.


“The folks in the L.A. market were the visionaries,” Walker said. “There are those people who just grab a sandwich and run, but this is a reinforcement of their brand. It’s about increasing traffic.” A Subway customer spends an average of 17 to 20 minutes in the store.


PLR’s staff musicologists pick the music and program the shows, which update nightly. The “radio” box, a hard drive that dials into a main server each night to pick up the next days’ content, is produced by Torrance-based Antex Electronics. PLR’s initial order was for “a few thousand” boxes, according to Antex President Dave Antrim. He’s hoping Subway decides to wire its entire chain of 25,000 stores nationwide. “That would bring them into the stratosphere with my largest accounts,” Antrim said.



Small Screen Struggles


L.A.-based Helio Inc., the mobile service formed last year in a joint venture between EarthLink Inc. and SK TelecomCo. Ltd., is trying all kinds of tactics to lure young customers to its mobile lifestyle brand. Launched earlier this year, the mobile virtual network just announced a trade-in program offering users cash for their old cell phones. Helio has custom-branded handsets that the firm says are optimized for its video-heavy mobile offerings. Called Helio Trade-Up, the program underscores the competitive challenges facing startup mobile operators. The darling of venture capitalists, companies such as Helio ($440 million in funding), L.A.-based Amp’d Mobile Inc. ($250 million over three rounds of venture funding) and Walt Disney Co.’s Mobile ESPN service are “floundering,” according to a Wall Street Journal report. Amp’d Mobile has spent heavily on marketing in a campaign that started well before its early 2006 launch, ESPN mobile has plenty of backing behind it yet both have failed to reach the 10,000 subscriber mark.


Users haven’t adopted mobile-video watching as fast as companies had hoped: only about 1 percent of the nation’s estimated 215 million cell phone users reported watching videos on their phones last year, according to measuring firm M:Metrics.


Helio is run by EarthLink founder Sky Dayton and has already announced groundbreaking partnerships with social-networking site MySpace.com in order to mesh young people’s Internet and mobile lives. The latest campaign offers a rebate check to new Helio customers who send in their old mobile phones.



Solid Foundation


L.A.-based independent video game developer Foundation 9 Entertainment Inc. received $150 million in venture capital from Francisco Partners, a $4.5 billion tech-focused fund. Foundation 9 is just a year old, the result of the merger of two smaller developers, Backbone Entertainment and the Collective. The company also has a significant investment in a Hollywood management company, Circle of Confusion, which represents writers and artists including the Wachowski brothers, creators of “The Matrix” film trilogy.


Foundation 9’s “Death Jr.” property is a top-selling video game franchise and comic book series, with a movie currently in production and a graphic novel coming out next year. Foundation 9 Chairman Jon Goldman said the company would use the capital infusion to make acquisitions and continue funding his company’s strategy of launching movies, games, comic books or television with the same creative property. It’s a tough balance, according to Goldman.


“Often a video game doesn’t start getting really successful until the third or fourth sequel,” he explained. “Sequels get bigger and bigger in the video game industry, whereas often in the movie industry, the first is the biggest and the second or third sequel just doesn’t have the same hit potential.”


The $150 million commitment will be spread out over the next few years.



Staff reporter Hilary Potkewitz can be reached at

[email protected]

or at (323) 549-5225 ext. 226.

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