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Durango high-tech venture spreads its wings

STEVE LEWIS/Durango Herald

Durango-based Airborne Media Group’s smartphone application allows users to hear muted televisions at bars, casinos, airports and other public places. The company’s technology, called Audioair, is in use at El Rancho Tavern. Bar co-owner Chip Lile is Airborne’s vice president of sales and marketing.

By Emery Cowan Herald staff writer

If people were wondering whether Durango startup Airborne Media Group is ready to test its game in the big leagues of Silicon Valley, the answer is an unequivocal yes.

After two years focusing on product and network development, the small-town technology company whose app allows users to hear muted televisions through a smartphone is transforming itself into a valley look-alike. The company is represented by a big-time technology law firm, has staff with experience in a sea of other startups and is making the rounds at technology trade shows in places like Austin and San Francisco.

The company now has about 18 employees based in Durango, Texas, Utah and California and earlier this month opened an office in a Silicon Valley business accelerator, which helps young firms grow.

It has filed eight patents covering its technology, called Audioair, which digitizes analog sound data from televisions and allows it to be received by smartphones.

The technology has a distinct purpose, but the company also envisions the app supporting a dynamic advertising platform. Advertisements ranging from a car commercial to a discount offer from a local venue, will pop up on the cellphone screens of Audioair users while they use the app, said Doug Parmentier, the company’s vice president of business development. The ads would have the potential to be more time, location and viewer-specific than anything a user would see on national TV, Parmentier said.

Venue owners also can choose to purchase a digital display screen that will flash advertisements, promotions and the social-media interactions between Audioair users. Advertisements on the digital display could be coordinated with mobile advertisements that would offer users a local promotion for a product shown in a national ad, Parmentier said.

Venue owners would get a small portion of the ad revenue to help them cover the cost of an Audioair subscription, which runs between $150 and $300 per month.

For advertisers, Audioair’s platform is appealing because it can determine users’ locations and also their preferences based on what channels they are watching, said Naveen Gupta, a product-development adviser with Airborne who is also the chief product officer at a mobile cloud computing company in Sunnyvale, Calif.

“The innovation is around how can you convert ads into content, and you can do that by making them super-relevant,” Gupta said. “If we can know a lot about you at personal level, then we can push you things that are like content because they are relevant for you.”

The company certainly is on the right track in tapping into the advertising potential of mobile, location-specific marketing, said Tim Mayer, chief marketing officer of Trueffect, a digital advertising technology company based in Westminster.

But many startups face a chicken-and-the-egg conundrum, Mayer said. It’s hard to attract advertisers without demonstrating a large user base, but minimal advertising dollars make it hard for a technology to expand its footprint.

The apps that do the best tend to be utilitarian apps that do one thing well, and in that sense, Airborne could be off to a good start, Mayer said.

The company’s challenge will be to get enough people using it to attract advertisers, he said.

That’s certainly the company’s main focus right now, Parmentier said.

The Audioair app has been downloaded by an estimated 7,500 users, according to the company’s own data. The technology, which requires a special digitizer box, is installed in 55 venues and aims to be in 800 locations by the end of the year, Parmentier said.

The company has its eyes focused on the nation’s 38,000 sports bars for potential expansion, but also sees opportunities for installation in airports, colleges, casinos and hotels – anywhere where there is a muted TV that people would be interested in hearing. Their target markets are the Austin-Dallas area and the East Coast between Florida and Maryland.

Sky Ute Casino and Fort Lewis College already have Airborne’s technology installed in their spaces.

So far, the company has received about $2.5 million in seed money, mostly from friends, family and local investors. Now the company is offering half-a-million to a quarter-million dollars in convertible debt to help finance more installations and build its revenue base.

This fall, the company hopes to raise another $3 million to $7 million in venture capital.

Already the company has turned heads in Colorado and beyond. Parmentier announced on his Twitter feed that Airborne Media Group was named one of 50 Colorado Companies to Watch for 2013 and Forbes contributor Jean-Baptiste Su mentioned the company as one of his top five picks among the 300 startups at San Francisco’s Launch Festival last month.

A March article by the tech-focused media company Tech Crunch said Audioair could “have some real legs,” as long as it can keep its prices reasonable for venues, ensure its technology is user-friendly and add value for advertisers.

“It seems like a niche play, but if something like this is going to work, it could be a multipronged approach that’s not only an audio helper but a local information and advertising system, complete with hardware support and revenue sharing,” the article said.

ecowan@durangoherald.com

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