SLS makes noise on 'The Apprentice'

Gott is the face of Ozark-based speaker manufacturer SLS International, which is coming off a once-in-a lifetime exposure on national TV in front of an estimated 11.2 million people.

SLS’ speaker systems were a featured product on the June 5 season finale of NBC’s “The Apprentice,” the hit show of real estate mogul Donald Trump.

The company’s involvement included the use of an SLS sound system in a Barenaked Ladies concert for charity, the proceeds of which went to the World Wildlife Fund, as well as the sale of SLS products in a charity auction.

SLS CEO and Chairman Gott said the timing is good for the national exposure, considering competition at national retailers such as Wal-Mart and Best Buy, where SLS products hit the shelves in May.

“It’s all about branding,” Gott said. “We’re on the shelf at Best Buy next to products that have been there for 20 years, and we’ve been marketing products for two. It’s a matter of getting those products in front of people in the way that’s the most cost-effective.”

The company’s prime-time TV placement is a result of a deal the company signed last June with Mark Burnett Productions, the company that also produced other reality TV shows “Survivor” and “Rock Star.” SLS’ Q Line Silver surround system was used on “Rock Star: INXS” last August.

It’s not the first TV use of SLS products, either; the company’s equipment has been used in NBC studios during Olympic Games coverage since 2002.

Gott said more TV product placement is on the horizon. The agreement with Burnett lasts three years, ensuring the company more visibility through Burnett’s other shows. As part of the deal, Burnett’s company has an option to buy SLS stock at $2 per share, which Gott said adds incentive for Burnett to market SLS products.

“On any new shows that he comes up with, we can have product placements, and we also have product integration,” Gott said. “‘The Apprentice’ was basically a product placement.”

Placement vs. integration

Product placement is when a company tries to get as much exposure as possible to the largest number of people; product integration is more about use of the product in the program and is aimed more at industry colleagues, Gott said.

SLS will be taking advantage of its TV exposure through signs in Best Buy stores that tout the products’ use on Burnett’s programs.

Additional product integration will come later this summer, via the new “Rock Star: Supernova,” which debuts on CBS July 5.

“You can spend millions of dollars buying TV ads to get 30-second spots on TV, or you can do a deal like we did with Mark Burnett where our products are used multiple times, in multiple different shows, so you have millions of people seeing more than a 30-second ad,” Gott said. “It’s like editorial content in a magazine – one page of editorial is worth five pages of advertising.”

The payoff has been visible for other companies; General Motors debuted the Pontiac Solstice in an episode of “Apprentice” earlier this season, and Gott said the exposure led to 4,500 preorders – in 45 minutes.

He added that it’s really too early to note any specific buzz related to his company’s “Apprentice” airing.

The big screen

TV is not the only segment SLS is after.

The company recently installed its speakers at the Campbell 16 Ciné, owned by Wehrenberg Theatres. Wehrenberg’s Galaxy 14 Ciné near St. Louis has the same speaker technology.

Wehrenberg spokeswoman Kelly Hoskins said the company has gotten plenty of positive feedback since the new system was installed in May.

“They notice a marked difference,” she said. “It’s a much deeper sound, it’s crisper, and they’re enjoying it a lot.”

SLS continues to use theaters to build its commercial products business, which still makes up the majority of revenue. Consumer products make up about 30 percent of revenue for the publicly traded company so far this year. Last year, consumer products accounted for only 5 percent.

Revenues were $970,000 in first quarter 2006.

“We’re in 250 to 300 screens across the country, and we have that many scheduled over the next six to 12 months to be installed,” Gott said of the company’s patent-pending ribbon driver speakers.

He added that the products are also in Consolidated Theatres movie houses on the East Coast, and the company is working on deals with “major theater chains that could add thousands of screens over the next few years.”

SLS speakers are also in the Phoenix International Raceway, which plays home to Nascar’s Nextel Cup series annually; installation was completed there in May.

All of the different sectors are ways for SLS to get its name into the public consciousness – a task Gott said is absolutely crucial.

“We couldn’t compete head to head with Sony or Pioneer with the same technology they’ve got – it’d take hundreds of millions of dollars to even get people to look at our stuff,” he said. “But because of our sound quality, they say ‘Wow.’ That’s why we continue to move forward and do what we’re doing.”

The company continues to sink large amounts of money into research and development – net loss for the first quarter of 2006 was $3.4 million, a 13.7 percent improvement over the previous quarter.[[In-content Ad]]