In an effort to win back advertising dollars from the Internet, Canoe Ventures is creating a national platform that will provide cable operators, advertisers and programmers improved Internet-like functionality for targeted advertising, reporting and scheduling.
The Internet has been leeching ad revenues from cable operators, but that should change once Canoe Ventures, with the help of tru2way and additional standards and specifications, is fully operational.
Tru2way has undergone several name changes since its inception as part of CableLabs’ OpenCable initiative in 1997.
Meanwhile, the semi-secret Project Canoe turned off its cloaking device earlier this year, revealing itself as Canoe Ventures LLC. Canoe Ventures officially opened its doors for business on August 4 when CEO David Verklin walked through the doors of the company’s Manhattan headquarters.
The operation, which starts out with a $150 million investment from Time Warner Cable, Comcast, Cox Communications, Charter Communications, Cablevision and Bright House Networks, has a game plan to create a nationwide platform for addressable, or targeted, advertising, which will in turn stem the flow of advertising dollars to the Internet.
“I think when people look at the Internet they think about things like measurability, accountability; sort of a granularity on the reporting and on the usage as well as the presentation of an advertising or interactive opportunity,” said Arthur Orduna, recently-named CTO of Canoe Ventures, who had served as the technical lead for the cable operators for Canoe Ventures, as well as Bright House Networks’ SVP of product and policy.
“Our view on this is that the interactive plant we’ve all invested in as cable operators is an ideal platform to have that degree of measurability and accountability for cable subscribers. Technically, we feel that we can provide the same, if not better, degree of measurability and accountability as the Internet on the cable plant.”
Currently, broadcast advertising accounts for $70 billion of the advertising revenue pie, while cable’s spot advertising slice is $5 billion. The opportunity for cable is to come up with a standardized platform that will allow MSOs to target, track, report and profit on the new platform with broadcast networks, cable networks and ad agencies, in order to eat into the Internet ad revenues of $19 billion.
During a Paul Kagan event prior to this year’s SCTE Conference on Emerging Technologies, Paul Woidke, who at the time was with Comcast Spotlight but is currently with OpenTV, said the cable industry and newspapers are losing a combined $12 million a day in advertising revenue to the Internet, but that can change with the advent of addressable advertising.
Clearly, the stakes for Canoe Ventures in particular, and the cable industry in general, are high.
As of last month, Orduna said Verklin was working on two fronts: putting together a team of executives for Canoe Ventures and finalizing the overall strategy for the company.
“We’re very much in transition right now,” said Vicki Lins, who was wearing two hats as the marketing and communications lead for Canoe Ventures and as senior vice president, marketing and communications for Comcast Spotlight. “Not only have the technology people been collaborating, but all the marketing people, the communications people and the operations people have been collaborating as well. This is not just an advertising initiative and it’s not just an operator initiative. This is an industry initiative that has widespread ramifications for so many different constituents.”
Lins said Canoe Ventures isn’t just about leveraging the revenue opportunities for cable operators, programmers and ad agencies, but also about delivering increased value to subscribers because the latter is “a win on the public side of our business.”
“We’re really not looking at a win-win scenario,” she said. “We’re looking at a win-win-win scenario.”
TRU2WAY’S ROLE WITH CANOE VENTURES
While Verklin will spend the next few months recruiting his roster of executives and fine-tuning Canoe Venture’s product playbook, Orduna said he will be supporting Verklin on the technical details, architectural issues and the standards that will be needed to support Canoe Ventures’ goals.
Orduna said the keys to Canoe Ventures are not only the reporting and metrics that will rival the Internet, but also the ability of “MSOs to present themselves and act in the most effective manner as a national footprint.”
Tru2way is a key ingredient to making Canoe Ventures a prime time player across the nation. The OpenCable Application Platform, or tru2way on the consumer front, consists of a stack of middleware software that resides between applications and the operating system within a consumer electronics device such as a set-top box or OCAP-compliant TV set.
JAVA-based OpenCable devices can have new information or applications ported to them because of their two-way capabilities, with ETV and EBIF being designated as lighter weight applications that can run on legacy set-top boxes before porting over to a full OpenCable environment.
The key to EBIF, which was also developed as part of CableLabs’ OpenCable initiative, is it works with a larger base of legacy set-top boxes than the more advanced tru2way.
“Tru2way is critical to Canoe Ventures,” Orduna said. “The two components of tru2way in my mind are EBIF and OCAP. EBIF gives us immediate reach for advanced advertising, while OCAP gives us depth and the future for extensibility and for really, really rich cross-platform type applications.”
So far, Time Warner Cable is the only cable operator with tru2way deployed, on an estimated 1.5 million set-top boxes, so as both Orduna and Ensequence CTO Aslam Khader point out, EBIF will be first up to the plate when it comes to interactive advertising and other applications.
Khader said that Ensequence, like other vendors, is working on EBIF applications that will port over to the tru2way environment once tru2way has reached critical mass with its deployment by cable operators.
“I would say that probably starting late next year, we’ll see some interesting experiments start to take place with native tru2way, which will probably lead to 12 to 24 months beyond that before it becomes a more scalable business,” Khader said.
“Timing wise, if it wasn’t the advertising business, I would say it would probably happen sooner because the capabilities of tru2way are far superior to what the legacy boxes can support,” Khader continued. “For advertising, to some extent, it’s the KISS principle, and that is also supported by the fact that the most important part of this to the advertisers is reach, and for reach, tru2way doesn’t fit the bill yet.”
From a product perspective, Orduna said Canoe Ventures is looking at a 12- to 18-month time frame for both EBIF and OCAP advertising applications, with the possibility that some MSOs may choose to use Cox’s OnRamp to bridge the gap from EBIF to full OCAP.
“I can’t speak for the individual MSOs and their deployment plans, but we can, as Canoe, plan applications, products and services that assume a full base of digital set-top box usage,” Orduna said. “We’re not going to make products and services for Canoe that are only ‘limited.’ They’re going to assume that all digital video subscribers are the target audience for them.”
|SCTE 130 advertising system example.|
CANOE VENTURES TO LEAN ON OTHER STANDARDS, SPECIFICATIONS
While tru2way percolates in the background, Canoe Ventures will be relying on other standards to gain its national footprint, one of which is SCTE 130.
Last month, the Society of Cable Telecommunications Engineers (SCTE) announced that the SCTE Engineering Committee had approved the first four parts of SCTE’s Digital Program Insertion – Advertising Systems Interfaces standard. SCTE 130 will play a key role in helping cable operators and Canoe Ventures target their advertising.
SCTE 130 is an XML-based tool that will work in traditional cable advertising deployments, as well as with the expanded opportunities on a unified platform. It also provides inventory and placement definitions.
SCTE 130 brings together content and subscriber metadata for targeting zones (or, in a unicast environment, for targeting individuals) to bring the right ad to the right consumer at the right time. From an ad agency point-of-view, ad placements across a wide area and precision measurements are the desirable elements of SCTE 130.
“At Canoe Ventures we haven’t come out and said it, but definitely from a standards [view], we’re really looking at what is that advanced advertising platform from a technical perspective, both sort of above the line, which is what Canoe is from a centralized point, and below the line, with all of the participating MSOs,” Orduna said.
“It’s comprised of a set of agreed upon interfaces, APIs and standards, which will insure a couple of things. They’ll insure, first of all, a large and healthy vendor and partner community, so at the end of the day the real power behind SCTE 130 is the ability to have multiple hardware and software providers being able to play and to provide solutions.
“The second thing behind this,” Orduna said, explaining SCTE 130 further, “is to allow the more rapid development of products and services for Canoe and also for any of the MSOs from an interactive perspective. The development and deployment of those products and services, and the development and deployment of the actual advanced ad configurations, need to be put in place alongside the existing linear advertising systems that the MSOs currently have.”
Orduna said SCTE 130 will play a crucial role in providing the extensibility of existing advertising functions today and at the system level for the advanced advertising data collecting functionality that both Canoe Ventures and cable operators desire. It will also give individual MSOs the ability to take advantage of advanced advertising for local ad and individual marketing purposes.
Orduna wasn’t able to go into specifics about other specifications and standards that will enable Canoe Ventures, but he did say that CableLabs’ Video-On-Demand (VOD) Metadata Content Specification 2.0 will also play a part.
The VOD Metadata Content Specification 2.0, which was released by CableLabs in May 2006, is the first application to use the Asset Distribution Interface (ADI) 2.0 Platform Specifications as part of the next-generation of on-demand cable services.
According to CableLabs, version 2.0 migrates the existing single title VOD metadata 1.1 services onto the next-generation platform to allow cable operators better management and scalability, to aid in the implementation of better user interfaces, and to improve on the 1.1 specification by defining additional search options.
Orduna said the first design principle for Canoe Ventures in regard to specifications was using specs that help coordinate all of the participating MSOs technically so that they look and act as one national footprint to programmers and advertisers.
The second design principle is helping engender a healthy vendor community that will support the MSOs “because there’s a lot of work to be done.”
“I think the CableLabs spec is a good example of the kind of technical interface that would allow both of those points from a design principle perspective,” he said. “It’s something that will help lead to the better coordination of on-demand-based interactivity in advertising.
“From a coordination perspective, it will provide the ability to have next-generation, cost-efficient products coming from the vendors’ side, which obviously helps us scale and roll out. From the coordination of a national VOD ad campaign perspective, it ensures uniform functionality and performance and that’s really key to convincing programmers on a national level that we really can act and look like one [platform].”
EBIF, TRU2WAY APPLICATIONS POISED FOR DEPLOYMENT
The number of EBIF and tru2way applications that were in booths at shows this year are a testament that the vendor community believes cable operators are gearing up for deployments of interactive applications.
At last month’s CableLabs Summer Conference, the Comcast Media Center (CMC) did a live demonstration of ETV applications running on its HITS Advanced Interactive Services (AxIS) platform. The demos included applications that Vidiom developed for CMC’s AxIS platform.
Vidiom’s ITV Dashboard, which can run in either an EBIF or tru2way environment, can serve as a portal for other applications as well as provide sports, news or stock tickers at the bottom of TV screens. As a tru2way application, it can serve as a mini-guide for programmers, such as MTV or Discovery, that have multiple properties by providing channel lineups for all of the properties on one guide.
Walden Miller, Vidiom’s senior vice president, engineering and services, said application developers want to see a national footprint for their applications since their revenue is based on the number of views or a revenue share model with advertisers.
“For ETV, that national footprint is already there with legacy set-top boxes so now all we really need is for ETV agents to get down to the corresponding headend infrastructures to deliver ETV applications to the end place,” Miller said. “At that point ETV applications are quick and easy.
Miller said the surge in the development of tru2way applications means the industry should start seeing deployments of those applications next year once cable operators have finished getting their headends configured for OCAP.
“The Tru2way Application Developers’ Conference before The Cable Show this year was very well attended,” Miller said. “We actually saw a level of interest that we haven’t seen in years past where people begin asking much harder questions about MSO infrastructures for their headends, business deals and how the business of applications works as well as the technology.
“That’s a great sign that people are getting serious about deployment because once you get the business guys starting to ask the questions about how they’re going to do it, they’re not talking about demos anymore – they’re talking about deployment. I think that is a really important distinction this year as opposed to prior years.”