Tuesday, January 23, 2007

SSG Interview With AMTC

January 23, 2007

Satellite Standard Readers have become familiar with Applied Media Technologies Corporation (AMTC), the official source for SiriusBusiness. SSG has covered several press releases from AMTC including some of the biggest franchise names in the U.S. We recently caught up with Matt Holden, the Public Relations and Sales Support Lead for AMTC. Matt was kind enough to give us his time, and bring us up to speed on what AMTC is all about, as well as some outlooks for 2007.

SSG - Matt, thank you for taking the time to chat with us. Can you tell us a bit about your role at AMTC?

M.H. - Sure! Thanks for having me. I'm the Public Relations and Sales Support lead for AMTC. My team and I handle all of the advertising and marketing support tasks, including arranging and implementing new special programs (the corporate-level deals you've been seeing reported), maintaining AMTC's web sites, issuing press releases, and chatting with folks like you!

SSG - AMTC launched in 1991 with a core business of telephone hold systems. How important has TelAdvantage been to AMTC's business model?

- Very - without it, we wouldn't be in business! For the first twelve years of AMTC's existence, it was our only business. As AMTC grew, we fine-tuned our company's entire makeup, from the sales force and marketing to manufacturing and technical support, to support the unique needs of business owners. This successful track record and the facilities and staff that made it possible were key factors in SIRIUS' selection of AMTC as the provider for SIRIUSBusiness. TelAdvantage is still generating a very substantial portion of AMTC's revenue, a trend we don't see slowing down. Our Creative Services department, the folks who write and produce TelAdvantage messaging in our in-house studios, are probably the busiest people at AMTC.

Going into 2007, we are getting into new technologies and new models which allow SIRIUSBusiness and TelAdvantage to take even greater advantage of their natural synergy. For example, we're now offering storecasting, which is what you hear when you go into a store, music is playing, and occasionally the music fades out and an advertising message runs. Using our TelAdvantage messaging technology in conjunction with SIRIUSBusiness' music stream, AMTC's storecasting offering gives our customers the best in the business on both sides of the equation at a fraction of the cost of other vendors.

SSG - One aspect of music in business is the laws surrounding royalties. Many people do not understand that playing FM radio or CDs in a business is almost always illegal, and additional royalties need to be paid. Can you explain the laws in an easy to understand way, and why contracting through a company such as AMTC resolves those issues?

M.H. - Playing music in a business environment is considered a "public performance" of the work. While there are certain exemptions to the law which permit playing broadcast radio in the smallest of business without paying royalties under very specific circumstances, no exemption is made for CDs, iPods, or any other music source (including satellite radio). Most businesses are well beyond the limits of these exceptions.

Each musician is represented by one or more of the three performing rights agencies: ASCAP, BMI, and SESAC. In order to be completely covered, a business owner needs to pay royalties to all three agencies in addition to whatever fees the music source itself incurs. Each agency requires its own signup questionnaire and has its own requirements and pricing schedules. It's a complex and overwhelming process.

SIRIUSBusiness dramatically simplifies the process. For just $24.95 per month, we not only provide the SIRIUS subscription, but also pay all three performing rights agencies on the customer's behalf. The business owner doesn't need to worry about what square footage his store is or what she serves in her restaurant; each customer pays the same flat fee as a part of the subscription.

SSG - Why did SIRIUS Satellite Radio choose to partner with AMTC for its commercial subscribers, as opposed to handling them internally?

M.H. - SIRIUS, like XM, is a company geared toward consumers. Their marketing, sales, and R&D efforts are focused on building better products for your car, your boat, and so forth. SIRIUS realized it would be inefficient for them to try to create an entirely new sales division, marketing campaign, and product line to address the needs of business owners. Instead, they turned to AMTC. As an industry leader in another media technology, it was a perfect fit.

AMTC's partnership allows SIRIUS to focus on the consumer side, while providing commercial subscribers with support from a company used to the unique challenges business owners face. For example, AMTC coordinates professional installation and sells commercial sound equipment (including speakers, amplifiers, et cetera), both of which are crucial to a business owner.

SSG - What does AMTC do to help its customers get the SIRIUSBusiness equipment installed in their businesses?

- We have a nationwide network of certified installers that work with us. When a customer requests professional installation, our installation department pairs him or her up with a local installer. All AMTC-certified installers adhere to a very competitive labor rate schedule created by AMTC. In most cases, installation is completed within 14 days from the date of purchase.

SSG - SIRIUSBusiness seems to fill a market sector that before now was untapped by AMTC. How important has SIRIUSBusiness become in AMTC's operations? Do you find that SIRIUSBusiness helps you sell TelAdvantage, and vice versa?

M.H. - The two products definitely go hand-in-hand, and a very strong percentage of our customers use both SIRIUSBusiness and TelAdvantage. In fact, we offer a 10% discount when they do. The great thing about our two product lines is that they have a big "the whole is greater than the sum of its parts" benefit. With just a TelAdvantage digital player, a business gets on-hold messaging. SIRIUSBusiness obviously gives the business background music. When the packages are combined, other opportunities arise - for example, storecasting. The reverse is also true; many of our customers play a combination of TelAdvantage messaging and SIRIUS music programming when their callers are on hold.

SSG - One concern that businesses always have is the "down-time" where service is not available, or not working. What "up-time" do customers experience with SIRIUSBusiness and TelAdvantage?

M.H. - With other satellite music services, such as Muzak, there is a dish that has to be aimed precisely at the satellite to get signal. That dish is a wind trap, and frequently gets blown out of alignment, causing loss of signal. Another huge problem for dish-based providers is weather. When it rains or snows, you lose your music. We even had a customer a few months ago whose Muzak reception died when an endangered pelican built a nest in his satellite dish! SIRIUS doesn't require a dish, but instead uses a tiny, 10” tall antenna, so our signal isn't affected by the weather.

Satellite reception is also tricky in certain geographical and urban regions. For example, customers in the Rocky Mountain states often have issues with Muzak's reception, as the mountains block the line of sight to the satellite. Since SIRIUS' satellites orbit over the Rockies, this doesn't happen to SIRIUS subscribers. In urban areas, large buildings can block visibility to the Muzak satellite. With SIRIUS, that's not an issue either. SIRIUS has installed terrestrial repeaters in virtually every major US city. If your business is near a repeater, you'll receive maximum signal strength regardless of the surrounding structures.

TelAdvantage players don't need to be permanently connected to any service; as long as they are plugged in, they're ready to go. All the messages are stored on and played from local media, such as the iQueue II's CompactFlash card.

SSG - AMTC offers customized solutions for telephone on hold systems, where the client can insert messages regarding their products and services. Do most businesses take advantage of this type of solution? How affordable is it? How fast do you turn around these solutions for your clients?

- Absolutely. AMTC's messaging offering is two-fold. First is the custom messaging - customers submit a script questionnaire, and we write a script and have a message available for download within five business days. The vast majority of our clients do utilize these custom messages, announcing their addresses, hours, and so forth. Custom recording is sold by the minute, and is available for as little as $25 per minute. The standard TelAdvantage package retails for $349.

Most of our TelAdvantage sales efforts focus on what we call "special programs". We create a package specifically targeted to the dealers, agents, franchisees, etc. of a large multi-location company. We have hundreds of these special programs, including corporately-endorsed programs for Chrysler, Ford, Volkswagen, Allstate, Nationwide Insurance, and Morgan Stanley, to name just a few. As part of a special program, we build a library of “standard” messages.

For example, when we built our program for Ford Motor Company, we recorded messages about all their car and truck models, their warranties, their service and parts department, popular features in their vehicles (such as SIRIUS Satellite Radio), and so forth. Since every Ford dealer in the country would want those kinds of messages, we record them on our dime. Then, every Ford dealer that buys a TelAdvantage package gets access to all those messages as part of their standard HoldDirect subscription, which is less expensive than even one minute of recording. Standard messages save our customers a ton of money.

Additionally, standard messages make it easier for us to work with regulated companies such as securities or brokerage firms. These firms require their franchisees, agents, dealers, or whatnot to obtain corporate approval for the material they play on hold. They typically call it "compliance approval". AMTC works with the corporate headquarters to make sure the standard messages are approved by the compliance departments, and then we know they're approved for any agent to use. Even for companies without compliance requirements, there is something to be said for a level of brand consistency such that if you call a Ford dealer in Florida or Alaska, you will hear the same messaging.

SSG - SIRIUSBusiness is still fairly new in the business audio solutions world. Have you seen great interest in the product?

- Definitely! As you've seen from our press releases, we're signing with new franchisors and major corporations all the time, typically one or more a week. That's in addition to all the individual stores, hotels, restaurants, offices, and auto dealerships that are "getting SIRIUS" every day.

When directly selling against Muzak, our primary competitor, we almost never lose a deal on a level playing field. The problem is, Muzak locks its customers into 3-year or 5-year contracts. The businesses we speak to often can't wait to make the switch to SIRIUS, but are stuck in contracts. As the word gets out about SIRIUS, though, business owners are starting to circle their contract end dates on their calendars. Each month, we add more new subscribers not only through our own marketing efforts, but through prospects that are finally getting out of background music jail and regaining their freedom to choose a new vendor.

SSG - What do your clients that sign up for SIRIUSBusiness find as the most compelling reason for joining?

- It's different for everybody. Obviously, the fact that SIRIUSBusiness is available at a third or in some cases even a quarter of what prospects are paying for Muzak plays a big part, as is the fact that we don't require a contract. The signal reliability is another big one, as I mentioned earlier. Many of our clients choose SIRIUS to "get legal" after they've heard from ASCAP, BMI, or SESAC about playing the radio or some other consumer music service. Folks playing the radio also come to SIRIUS to escape commercials - we've even had a few people sign up after a competitor's commercial played in their store!

We also hear a lot of our customers complain that Muzak in particular is extremely repetitive. Employees of businesses playing Muzak tell us that they can set their watches by what time certain songs will play. SIRIUS has a song library of well over a half-million songs, and each of the 67 music channels we carry has a dedicated, full-time program director whose sole responsibility is to choose fresh, varied songs each day.

Other deals (for example, our recent Pizza Ranch agreement) are keyed on the support services we offer. Pizza Ranch was evaluating SIRIUSBusiness and XM's business offering, and chose to go with us because we could provide installation and technical support. We also provide the sound equipment for new stores, which makes AMTC a one-stop shop for music. When a new business is opening, the owner has a million things they're trying to get done. We do everything we can to make the process easy, from purchasing to installation and post-installation technical support.

SSG - One thing that businesses consider is the length of contract and hardware costs. Can you break that down for SIRIUSBusiness and TelAdvantage?

M.H. - Certainly. The contract part is easy - there isn't one! AMTC's policy has always been that if you provide a good service at a fair price, there's no need to lock a customer into a contract. They will keep coming back on their own.

Our SIRIUSBusiness Equipment Kit contains everything a business needs to connect SIRIUS to an existing sound system: the receiver, a commercial-grade outdoor antenna, and all the requisite cabling and so forth. It retails for $239. For a new business that has no sound equipment, our sales representatives can build a custom sound system for the space for the lowest price in the industry. A nice sound system for a small business can run as little as a couple hundred dollars. We also offer leasing options to help reduce up-front costs on sound equipment, with a $1 buyout option when the lease term is up. Muzak's leases are usually structured such that businesses rent the equipment forever - you never own it.

TelAdvantage is sold as a turnkey messaging bundle, which consists of the iQueue II digital player, a CompactFlash card, and a USB reader/writer. The bundle also includes one minute of custom recording and a year's subscription to HoldDirect.com. The complete package is $349. As with SIRIUSBusiness, there is no contract whatsoever.

Customers who sign up for both TelAdvantage and SIRIUSBusiness receive a 10% discount, as well. Additionally, we offer rebates to companies which have named AMTC their endorsed vendor, which reduce the price even further.

SSG - How well does the brand of SIRIUS Satellite Radio resonate with potential clients?

M.H. - SIRIUS is one of the hottest brands in America. The buzz has given us almost universal recognition. I can't tell you how often we hear, "I've got SIRIUS in my car, and I love it!" Some businesses are a little concerned at first because they equate SIRIUS with Howard Stern, but they quickly relax when we let them know that Stern's programming isn't included with the SIRIUSBusiness subscription.

SSG - A common misconception is that a service such as TelAdvantage and SIRIUSBusiness are only for the "big companies". Does AMTC cater to the small business?

M.H. - Before we came along, both business music and on-hold messaging were cost-prohibitive for all but the largest companies. We've revolutionized the markets for these services by slashing prices by more than half and getting rid of contract commitments. We've also simplified things by manufacturing plug-and-play products that are easy to use, offering professional installation, and constantly using our customers' feedback to improve our service and our equipment.

For the first time, you don't need to be a Fortune 500 company with a technician on staff in order to utilize these types of services.

SSG - What types of businesses utilize services such as yours?

M.H. - All types! SIRIUSBusiness is playing in every industry you can imagine - retail stores, warehouses, hotels, restaurants, auto dealers, doctor's offices and hospitals, gyms, miniature golf courses, arcades, and even the locker rooms and training facilities of a few professional sports teams. Likewise, TelAdvantage is a great solution for any business with a high call volume. Some of our highest-volume TelAdvantage industries include insurance agencies, moving companies, hotels, airlines and cruise lines, automotive repair shops, financial planning offices and staffing services.

SSG - Can you give us an outlook for 2007? Should we expect to see growth and more announcements regarding SIRIUSBusiness?

M.H. - 2007 is going to be a banner year for AMTC. We've got countless more corporate endorsements and nationwide rollouts in the pipeline, several of which are already signed and simply aren't public knowledge yet. We had $3.85 million in revenue for 2006 and we're on pace to shatter our goal of $5 million for 2007.

As a company, AMTC is in a major growth surge. We're increasing our sales staff by more than 50% for 2007, including opening a satellite office, and are also ramping up staffing in other key departments to handle our increased volume. We've got some very ambitious plans in the works for new internal tools and procedures to make AMTC an even more efficient operation, which translates into better customer service and ultimately higher production. Some of these tools are already becoming available to AMTC staff, so the benefits are already being realized.
2007 is also going to be an extremely exciting year on the research and development side of things. Every one of our product lines will be receiving at least one major new product. We've got new SIRIUS hardware coming soon, several very significant new sound equipment products, and a few new messaging players.

SSG - If readers and businesses are interested in TelAdvantage, SIRIUSBusiness or other products and services you offer how would they go about contacting AMTC?

M.H. - AMTC can be reached at (800) 741-AMTC, or on the Web at http://www.amtc.com.

SSG - Thank You for speaking with us today, is there anything additional that AMTC would like to add?

M.H. - I'd just like to say that all of us at AMTC are extremely excited about the coming year, and all the buzz that's starting about who we are and what we do. The satellite radio blogging and forum communities online have been a huge part of that, and we truly appreciate it. We're looking forward to generating a lot more interesting stuff for you all to talk about!

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1/23/2007 10:37:00 AM

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