For iMedia International Inc., survival depends on a little computer disc tucked inside the morning newspaper.
No, this isn’t a James Bond movie. Last week the Santa Monica-based iMedia announced the creation of a newspaper network to distribute interactive multi-media content in newspapers. The project will launch with the November issue of Hollywood Previews Entertainment iMagazine, published on a CD-ROM.
The iMedia network will have a circulation of 2.6 million. Locally it has partnered with the Los Angeles Newspaper Group, owned by William Dean Singleton’s Media News Group. Those titles include the Long Beach Press-Telegram, Los Angeles Daily News, Pasadena Star-News, San Gabriel Valley Tribune, and Whittier Daily News.
As for the survival question, iMedia’s most recent filing with the Securities & Exchange Commission shows the company nearly $28 million in debt, including a second-quarter loss of $589,613. Despite a new $3.6 million capital infusion from investors, “these factors raise substantial doubt about the company’s ability to continue as a going concern,” the filing states. iMedia shares trade over the counter.
For the next six months, the company has such big hopes for paper-borne CDs that it has appointed a new chief executive to spearhead the venture. On Oct. 3, Henry Williamson, former director of advertising at the Los Angeles Times, took over leadership of the company. Former chief executive and company co-founder David MacEachern retains the title of chairman.
“It is proven that the digital product, when inserted into newspapers, provides new circulation and attracts a younger audience,” said Williamson, pointing out two challenges facing metro dailies. “The newspaper subscriber benefits from the value of the content delivered free song downloads and 2.5 hours of exclusive content.”
So-called “ad pods” on the disc can appear as 30-second broadcast-style spots, digital page-views or links to online stores. Williamson believes the system will “provide a great opportunity for newspapers to recapture much of the ad budgets they have been losing to cable TV and the Internet.”
The newspaper industry could use the help. With continuing circulation and revenue declines, iMedia’s strategy of bringing “sight, sound and motion to newspapers nationwide” comes at an opportune moment.
iMedia distributed its first issue of Hollywood Previews in April through the Dallas Morning News. It currently has deals for the L.A., New York, and Dallas markets. And as newspapers extend their brand online, Williamson expects more papers will sign up. “Our program is a partner in providing unique content, customized for each newspaper, and aligned with entertainment content to provide additional traffic to Web sites and new subscribers to the newspaper itself,” he said.
