NDS, which is the leading contributor in a new $20-million round of investment in BlackArrow, views the partnership as a key vehicle for persuading U.S. cable operators to leverage its software to enable on-demand ad insertion, interactive advertising and addressable advertising in linear television on digital set-tops of every description, says Todd Narwid, vice president of new media. The new investment, which included participation of previous investors Cisco Systems, Comcast Interactive Capital, Intel Capital, Mayfield Fund and Polaris Venture Partners, brings total outside funding of BlackArrow to $58 million.
“One of the challenges we’ve faced in bringing our technology to operators in the U.S. is the ROI and business model question, which is where BlackArrow comes in from our perspective,” Narwid says. “They’re the first significant example of a technology supplier coming in and solving the problems of operators and programmers who are looking to build an ecosystem that will allow them to make money on advanced advertising.”
Noting BlackArrow’s successes with Comcast, Bresnan Communications and Fox Cable at facilitating addressable advertising in VOD (see ScreenPlays April, p. 14, and March, p. 1), he adds, “We see no reason why the BlackArrow model isn’t going to take hold for further iteration of advanced advertising, which we see as addressable applications in the form of EBIF (Enhance Binary Interface Format) and Java-related bound and unbound applications and addressable advertising in recorded video.”
The two companies are developing a new joint offering combining end-to-end advanced TV advertising products with system integration services. Future plans also call for multi-platform solutions that will enable advanced advertising on devices beyond the set-top and DVRs.
“There will be myriad business models and advertising opportunities that will be apparent as we offer these solutions to programmers and operators alike,” says Nick Troiano, president of BlackArrow. “There are bundled ways for advertisers to reach viewers in a more addressable way when you combine the network-based campaign solutions that we offer and the set-top level solutions from NDS.”
The BlackArrow Advanced Advertising System is comprised of the Sales Suite, which allows television ad-sales organizations to define, manage and fulfill multi-platform, multi-operator advertising campaigns, and the Decision Suite, which provides the ad decision logic and system interoperability that’s required for content distributors to deploy dynamic ad insertion rapidly in on-demand environments. NDS Dynamic comprises the ability to deliver and manage applications to the TV via set-top boxes and DVRs and to generate important usage metrics.
“We’ve been engaged with BlackArrow over the past six to nine months working together on proactive integration between our systems, including demonstration of our interoperability at CableLabs, and telling our story together,” Narwid notes. “NDS has done a lot work in addressable advertising but on boxes outside the U.S., so it makes a lot of sense to show our capabilities with BlackArrow as integrated solutions in the U.S. market.”
While NDS has incorporated EBIF and tru2way capabilities into its software suite in recent times to meet the requirements of the North American market, the attributes it sees as distinctive advantages have been honed over many years working with interactive applications in Europe. These include one-way satellite environments where the company had to develop software functionalities that worked with low-end set-top boxes (STBs).
“We’re in a position to push the envelope further than others because of our knowledge of STB software and our ability to work with less information in the return path,” Narwid says. “This is a key benefit to cable operators, who want to have greater reach with advanced advertising on their legacy boxes than might be possible with other vendors.”
But, he quickly adds, the strongest suit in the new partnership is the fact that BlackArrow brings programmers into the mix by providing them a means to manage campaigns across multiple operators. “We’re getting past having to sell the opportunity in isolation to individual operators where it’s harder to justify the return on investment than it is if there are programmers out there who are already positioned to work with them,” he says.
One of the frequently overlooked opportunities in cable’s pursuit of advanced advertising is dynamic placement in videos stored on DVRs. “Everybody’s focused on getting ads into VOD, and that’s important,” says a cable advertising consultant, speaking no background. “But, if you want to talk about where the large volume of viewing is on time-shifted programming, it’s not VOD; it’s DVRs.” The fact that NDS has developed a complete solution to addressable advertising on DVRs is an encouraging indicator of what can be done, this consultant says.
Narwid suggests the partnership will also gain from the fact that NDS has developed advanced programming guides to support easy navigation across linear, VOD and DVR-stored assets. Noting Cox Communications is now deploying an NDS-developed advanced EPG, he says, “The industry recognizes there’s a great need for more elegant interfaces supporting access to VOD and DVR content. NDS has integrated search from different access points in the guide to source VOD content more optimally and with fewer clicks, which adds up to more frequent use of VOD content. That dovetails perfectly with efforts to gain more exposure for advanced ad placements in time-shifted content.”
Troiano also stresses the importance of the usage metrics the partnership will be able to deliver. “Because the NDS technology collects an enormous amount of data at the STB level, we’ll be able to pass relevant data back to corresponding campaigns,” he says. “The combination of the two of us will provide operators and programmers a very detailed view of performance and usage metrics.”