Truth be told, notwithstanding the blow to their credibility, the MSOs’ decision to shut down Canoe’s big New York facility, let go 130 staff members and turn what’s left of the organization to a focus on creating a national platform for VOD and TV Everywhere is a major step forward.
Why? Because a phalanx of evangelists preaching the wrong gospel to the ad industry was not the way to win hearts and minds. Madison Avenue was not buying into cable’s focus on an iTV agenda that’s dependent on a proprietary platform with mind-boggling technical complexity and uncertain business dimensions at a time when the biggest challenge is to exploit the potential of unified campaigns tied to multiscreen distribution of first-run and time-shifted programming (see, for example, January 2011, p. 1).
Streamlining everything through a central clearing house in a series of steps leading from zone-based sales to RFI to VOD and beyond may have made sense from a distant vantage when the MSOs were still porting their canoe on dry land. But once it hit the river the rapids were too wild to maintain control.
Questioned about the fallout from the Canoe collapse, a veteran senior executive from the MSO advertising side, speaking on background, says, “I think to suggest it’s not a setback is to be pollyannish. I’ve seen statements touting all the other things we’re doing as if this is no big deal. From an operating prospective and from the perspective of agencies and advertisers, this was a setback for cable. But setbacks aren’t losses. They’re just setbacks.”
In other words, things were learned, and those learnings are going to contribute to real-world progress. “The cable industry took a huge step forward with funding Canoe and going through the exercise and coming away with learning about a lot of valuable things that will pay dividends,” this executive says.
The challenge for cable is to bridge the campaign management gap between traditional live TV, the set-top centric VOD arena, where free ad-supported programming is now drawing about as many views as movies, and the IP domain of unmanaged devices, where TV Everywhere models support distribution of premium programming to authenticated subscribers. Fortunately, cable vendors in growing numbers are coming forward with solutions that overcome the technical barriers to integrated campaigns, from single invoicing of multiple campaigns to cross-platform ad managers down to ad placement servers that can insert ads on the fly in whatever format suits the device a particular subscriber is using to access a program.
In other words, after years of kicking tires, running trials and debating business models, cable operators and their advertising partners are ready to push ahead on all fronts with solutions that offer a way out of the TV/online/mobile silos regardless of whether the ad strategy has to do with addressability, time-shifted placements, requests for information, click-to-purchase options, telescoping or personalization via automatic content recognition. As has been the case for the past two years, how all this is done, how leads or targeting or RFIs are monetized and what the revenue splits are between programmers and operators are all part of a huge scrum involving endless haggling at the local and national levels.
It’s ironic that what’s left for Canoe is pursuit of an agenda which its managers postponed early on in favor of other strategic initiatives. In its radically trimmed-down form, the venture will now attempt to create a national VOD advertising platform that encompasses both traditional on-demand and eventually TV Everywhere.
This will be immensely helpful, says the executive quoted earlier. “Operators are generating billions of views in the on-demand space, or what the Europeans refer to as ‘catchup TV,’” he says. “Canoe’s efforts to value that, in terms of monetizing ad placements in programs outside the Nielsen C3 window, is going to be very important for operators as they fine tune their products to compete with the over-the-top space.”