Meet the company making millions showing commercials to DMV customers
Hundreds of flat-screen televisions in California DMV offices - the type that show customer appointment numbers - have helped one company pocket millions of dollars in recent years while facing no competition.
The extent of the company’s revenue and reach was revealed through a series of recently released public records, and separate lobbying documents that show how the company helped craft the law that allowed it to corner the market.
The Motor Vehicle Network, a Connecticut-based private company founded about 25 years ago, provides flat-screen television screens at DMV offices across California. Those screens display customer queue numbers, as well as public service announcements. But they also display commercial advertising, and the Motor Vehicle Network keeps every penny of that advertising revenue.
At the Santa Rosa DMV office, the company’s televisions show advertisements for Cream’s Salvage, Postmates and Santa Rosa Junior College, among others.
DMV spokesman Jaime Garza said the setup, which has generated millions in revenue for the company, according to the records, is a win-win. The DMV gets free TVs without spending taxpayer money. The Motor Vehicle Network gets access to some of the California DMV’s 30 million annual customers, half of whom spend at least 30 minutes in the office, according to state documents advertising the contract for services.
“It doesn’t cost us a dime,” Garza said. “They cover the cost and pay us rent. If we had to put all of that in there, it would have cost us millions and millions of dollars. We’re saving a lot of money.”
The Motor Vehicle Network pays $100 per month for the right to advertise in any given California DMV office. It has televisions in 83 offices across the state, according to DMV documents.
Founded by a former ABC executive, the Motor Vehicle Network offers the same service in 24 states and more than 1,000 DMV offices nationwide. At least in California, it has been unopposed in three separate bids to provide services. Since mid-2015, when the company was first required by contract to report its monthly advertising revenue to the state, it has earned at least $150,000 per month during most months, meaning the company’s California operation has earned at least $7.5 million in the past four years, based on a chart provided in response to a records request.
Before October 2007, such a setup - a public-private partnership involving vendor-provided TVs at DMV locations - wasn’t legally possible in California. But the Motor Vehicle Network began laying the groundwork for that to change in January that same year when it contracted with a California lobbyist to lean on lawmakers.
The company paid its lobbyist $21,500 and ushered a bill it sponsored, Assembly Bill 07-1139, authored by then-Assemblyman Bill Emmerson, R-Riverside, through the Legislature to the desk of then-Gov. Arnold Schwarzenegger. The law he signed law allowed the DMV to enter into a contract with a private vendor to set up message display systems. Emmerson, who later served in the state Senate, doesn’t appear to have received campaign donations from anyone connected to the Motor Vehicle Network.
The bill sailed through the Legislature despite concerns detailed in an Assembly Committee analysis.
“This bill continues a trend of commercialization of governmental services which, while troubling or at least annoying to some as become widespread and largely accepted by the public,” according to the committee’s analysis. “In addition, it provides a modest revenue source to enhance public services that may otherwise be significantly underfunded.”
Scott Savage, president of Motor Vehicle Network, said in a Oct. 14 phone interview that lobbying was the cost of doing business, and he estimated that about half of the 24 states in which his company does business required a change to existing laws to pave the way for his company’s business. Savage wasn’t aware of any other company doing this kind of work - particularly at the scale of his firm.
In 2011, four years after the authorizing legislation became law, the DMV went looking for a message display system for DMV field offices, soliciting proposals from companies that could do the work.
“The DMV envisions a dynamic and scalable solution that allows for multiple uses,” according to the request for proposals seeking a private partner for the 2011 pilot.
The DMV sought a solution that would provide DMV-related news and information, provide public safety messages, post live AMBER alerts and show advertisements “in the best interests of the motoring public,” so long as those advertisements didn’t include alcohol, tobacco, firearms, politics, religion or DMV-regulated services.