JC Penney, Cap Cities/ABC, GTE Spacenet to deliver voice, data, video network and programming

The JC Penney Company, GTE Spacenet Corp. and Capital Cities/ABC Inc. are working out the details on a joint venture for a network for voice, data and video communications in retail outlets. The venture, Advanced Retail Communications (ARC), hopes to entice both large and small retailers with digital satellite broadcasts and specialized broadcasting services customized to retail locations.

The venture effectively exploits the expertise of the companies. JC Penney’s retail operations already have an installed technology base for data communications and transaction processing. GTE Spacenet, based in Stamford, CT, is a unit of GTE Corp., which operates the nation’s largest independent telephone company and other satellite operations.

For more than three years, it has supplied JC Penney with one-way video broadcasts and two-way audio communications to corporate offices and the 750 JC Penney stores currently equipped to receive the transmissions.

New York-based Capital Cities/ABC, the operator of ABC Television and Radio networks, other radio and TV stations, and programmer for cable stations ESPN, A&E and Lifetime, will furnish the operation with media expertise and programming. Capital Cities plans to develop targeted programs for ARC network customers, a service it has been providing for JC Penney’s sports departments for the past six months.

ARC evolved from these working relationships. “We have an excess capacity of existing network,” says Jean Davis, manager of media relations for GTE Spacenet. “We’re looking to market this network to other users.” Davis sees the potential for a huge market. “We’re able to provide a shared network that will allow smaller retailers to take advantage of the kind of network services that ordinarily only big retailers could afford, for example, video.”

Aside from the significant base business guaranteed by JC Penney’s 1,400 retail outlets, ARC will target retailers and shop owners in 700 malls nationwide. “Seven hundred malls is a big mouthful already,” says Duncan Muir, spokesperson for JC Penney. “Obviously there are others malls out there with potential customers as well.”

The media venture will be advertiser-supported. However, Robert Aptr, VP of finance and administration for ABC Sports at Capital Cities/ABC, says it will not be like regular TV. Video programs, most often set to music, will broadcast over TV sets strategically placed throughout a store or a department.

Programs will draw upon video stocks from ABC’s 30-plus years in television as well as its expertise in targeting specific audiences, such as women, sports fans, fashion and popular entertainment enthusiasts. “As an equity partner, what we bring to the table with us is one of the largest media companies in the U.S.,” says Aptr.

Capital Cities’ goal is to create nonintrusive, yet mood-setting programming. “We’re not only in a listening, audio age. It’s a video age,” says Aptr. “This is a second generation of Muzak that we feel has a broader appeal to customers.” Although current plans do not include interactive programs, Aptr says he envisions future interactive projects, such as contests and sweepstakes.

While the participants are mum on projected revenue and investment details, representatives for the venture say network prices will be low in order to lure both large and small companies. “We’re sure that it will be very cost-competitive to what they have now,” says Davis.

Although the project is scheduled to see the light of day in the first quarter of 1993, much work remains to be done. “This is still in embryonic stages,” says Aptr. “We have yet to settle many details.”

Anyone who is bothered by Muzak is certain to find the prospect of “Video Muzak” more than a little alarming.

Amy Johns