XOD Capsule - July 26, 2005

Mon, 07/25/2005 - 8:00pm
xOD Capsule Newsletter CED Broadband Direct Current Issue Subscriptions July 26, 2005

Advertising evolution or revolution?

As digital video recording and video-on-demand mature, it only follows that advertising in those domains will inject itself and attempt to do the same.

DVR pioneer TiVo Inc. is the latest to jump into the mix with a "next-gen" product (see story further down), and two relatively high-profile advertisers (General Motors and The WB Television Network) have already jumped in to see how or if this will actually work.

With more than 3 million DVR subs now, maybe timing is on TiVo's side with this new U.S. entree. There were a few misses earlier on.

Some may recall RespondTV. It didn't get very far after hitching its hopes and dreams to the original (and much maligned) DCT-5000 platform. Companies like OpenTV Corp. and Navic Networks have fared much better.

To understand the appeal of interactive advertising, one must only look to the U.K., where such advertising carries premium status. Time will tell if U.S. viewers will also respond favorably.

We do know that ad-skipping is still a common occurrence among DVR owners. According to a new survey from Leichtman Research Group (LRG), 88 percent of DVR owners said they usually zip through commercials when viewing a recorded program. Not overly surprising. If the option's there to skip an ad, viewers will usually take it. TiVo owners (and DCT-6412 users, apparently) are only a Google search away from some simple codes that uncork latent 30-second skipping capabilities.

It only presents more fuel for those who are building interactive and more targeted advertising platforms.

The advertising model will change, but will that model change in an evolutionary or revolutionary way?

Respond via e-mail, and I'll share your thoughts in a future issue.

—Jeff Baumgartner

ERM: A path to server coexistence?
There's a new technology in town that aims and claims to give operators the virtual keys to the on-demand future: the ability to mix and match a wide range of server types and brands on the same system.

That newcomer, the Edge Resource Manager (ERM), also manages the use of edge bandwidth—whether it's for video-on-demand or some other type of service that utilizes QAM resources.

At least two vendors have emerged in this new product category: Vertasent LLC and Camiant Inc. The youngest of the two is Vertasent. Camiant is best known for its policy servers for the PacketCable Multimedia (PCMM) platform.

Drawing from the industry's Next Generation Network Architecture (NGNA) project, the ERM, at its core, is aware of and manages the use of bandwidth at the edge of the network. Its role is to allocate that bandwidth as a session (a VOD session, for example) is set up and later broken down. The concept also shows up in Comcast's Next Generation On Demand architecture.

But the ERM will handle much more than on-demand, though VOD is likely the first application for it. It will also apply to other applications and devices that will tie up QAM resources, including switched video, the modular CMTS and call management gear.

The importance of ERM devices will grow as video bandwidth requirements become more unpredictable and begin to look more like high-speed data applications, said Ed Delaney, Camiant's VP of marketing and business development.

Early on, MPEG-2 streams were encoded at about 3.75 Mbps. With HD and switched video entering the picture, the bandwidth question becomes more dynamic. Operators, Delaney added, "will have to put intelligence at the edge to manage those requirements."

Perhaps the more forward-looking element for ERM is its ability to allow operators to run more than one type (and brand) of servers on their VOD networks. Under today's networks, a video server from one vendor and the server from another can't share resources on the network. Also under today's VOD networks, all QAM resources are controlled by the session manager, which is also controlled by the system's VOD vendor in most cases.

"It becomes impossible for MSOs to mix and match different servers from different vendors in the same headend," said Manas Tandon, Camiant's director of product management. "The ERM decouples the whole system."

But beyond the obvious multiple source benefits, what other advantages might operators find by doing this?

For starters, some servers may be better than others for particular types of VOD titles—such as a big hit versus a less popular library title. Server and stream requirements might also be different for audio applications than they are for video services.

"Some are good at streaming, and others are good at switched broadcast. One server type might be good for top content, and others for streaming HD," Delaney said.

Although some VOD software platforms can support different VOD servers, it's a "fuzzy fact" as to whether they can mix and match servers in the same headend, said Bruce Bradley, Vertasent's VP of product and market management.

Despite the claims of ERM technology, it still has to hook into existing VOD and QAM systems to actually work. Vertasent has already integrated with two QAM vendors (Motorola Inc. and Harmonic Inc.), but has not announced the same with server vendors. Camiant is talking to the usual suspects, but has yet to announce any integration partners.

But integration is one of ERM's biggest challenges. Because of competitive forces, it's likely that QAM vendors will be more willing to do integration than the VOD companies might be.

"The tension here is how to achieve that modularity and flexibility to enable these services, and how to make sure you can keep everything integrated," said Joe Matarese, chief technology officer of C-COR Solutions. C-COR bought VOD and ad-insertion firm nCUBE earlier this year. "The question is…what's the value of that [using different servers in the same headend] versus the operational challenges of managing a new vendor?" Matarese wondered. "The tell-tale sign will be when someone does this for the first time. Then watch for six months to see how quickly the next operator jumps in." That, he noted, will determine the "operational sanity" of the concept.

Operators have been known to switch out one VOD vendor for another, but no MSO (so far) has publicly disclosed a test or deployment of multiple video servers in the same VOD system.

TiVo 'tags' new ad platform
TiVo Inc. aims to prevent ad-skipping and to increase the value of ads in "time-shifted" environments with a "next-generation" interactive advertising system, and has secured a couple of clients to help prove out the concept.

The DVR pioneer has also secured two big clients to help prove out the concept: General Motors and The WB Television Network.

The new system will give those companies the ability to insert a customized call-to-action or a branded "tag" in their commercials. The branded tags replace generic ad tags previously used by the DVR company's advertising clients.

If viewers select the tag, they are "telescoped" from the spot to view longer-form promotional footage, and given the ability to request more information. The program being viewed is paused during this time. Telescoping has become extremely popular in the United Kingdom, and such ad real estate carries a premium there.

The concept is also gaining ground among U.S. cable operators, either in-house or through partners. Comcast Cable, TiVo noted, has already said it would use TiVo's ad platform on the MSO's legacy DVRs beginning in 2006.

GM will use the new customized tags to promote OnStar, and its GMC, Chevrolet and Saturn brands. The WB, meanwhile, will use the tags to promote upcoming shows. Using the green thumbs-up button, the TiVo remote will enable viewers to record a single episode or a full season of a given WB program.

Although it's new to TiVo, the concept is anything but. Wink Communications, acquired by OpenTV Corp. in 2002, was among the concept's vanguard.

The first iteration of Wink offered some limited graphical information to appear on the screen, and enabled viewers to request a brochure or some other form of information. Charter Communications is still using some of the original Wink technology in some of its systems. "It's a very simple, but powerful application for advertising," explained Thomas Hagopian, OpenTV's SVP and general manager of programming/advertising.

OpenTV has since added a heavy video element to its ProSync platform, which is offered today on DBS with EchoStar Communications and Foxtel of Australia.

"The payoff really needs to be video. That's what viewers really respond to," Hagopian says of today's telescoping techniques. "What seems to create some energy in the market is long-form video; it's the core of what gets advertisers excited, and gets greater use out of the video they're already producing."

ProSync also has the ability to pause live programming in set-tops with on-board DVRs when viewers access interactive advertising.

Bresnan rides Rentrak
Bresnan Communications has agreed to trial a video-on-demand (VOD) measurement and reporting platform from Rentrak.

Rentrak's proprietary OnDemand Essentials system will enable Bresnan to supply anonymous, encoded VOD transaction information via the already-installed C-COR Inc. nABLE backoffice platform.

Bresnan has agreed to test Rentrak's platform for one year. Rentrak said it marks the first time its system will obtain usage data from the nABLE platform.

"Rentrak will enable us to more accurately monitor and analyze on-demand viewing preferences so that we can further enhance our video-on-demand offerings to our customers," said Bresnan Vice President of Operations Jim Gemmill, in a statement.

Rentrak also has agreements with Cablevision Systems Corp., Charter Communications, Comcast Cable and Insight Communications.

DePrez helms new EGT unit
Greg DePrez, the former head of subscription video-on-demand (SVOD) at Starz Encore Group, has joined EGT Inc. to help the digital technology firm start up a new Emerging Applications division.

Atlanta-based EGT got out of the blocks with MPEG-2 standard-definition encoders, but is now evolving with encoders that support advanced codecs and high-definition television. Further, the new unit will be dedicated to new apps that support digital video platforms, including VOD, HDTV, DVRs and digital advertising.

DePrez, who will spearhead the new division from Denver, said EGT has realized that it will also have to build relationships with content providers, which want to maintain high quality levels as technology extends them new opportunities such as HD and VOD and challenges such as advertising.

During his career, DePrez has served as a conduit of technology and programming. Before helming SVOD at Starz!, DePrez played an integral role with pay-per-view at Tele-Communications Inc. (TCI). Near-term, DePrez said he will be doing plenty of homework on the technology and launching discussions with advertisers to identify where the "pressure points" are as they adapt to the all-digital environment.

Cox frees up VOD
Cox Communications has added 700 hours of "free" on-demand content. Free titles, to be offered via the MSO's "FreeZone" category, will come from networks such as A&E, Classic Kids, Concert TV, Discovery, Discovery Kids, DIY Network, E!, Fine Living, Food Network, HGTV, History Channel and NFL On Demand.

In addition to boosting the value of digital, Cox hopes the additions will benefit its advertising ambitions.

"The addition of Free On Demand content is beneficial to our advertising clients because it will increase traffic in FreeZone and the likelihood customers will find valuable information from our advertisers alongside favorites from cable networks," said David Pugliese, Cox's VP of product marketing and management.

Cox offers VOD in San Diego and Orange County, Calif.; Las Vegas, Nev.; New Orleans, La.; Oklahoma City, Okla.; Omaha, Neb.; Hampton Roads, Va.; Connecticut and Rhode Island.

We are making changes and additions (including several international deployments) to our Web-based "living" deployment chart. If you have a new deployment to report for the VOD Scorecard and the Web-based deployment chart, please contact CED editor Jeff Baumgartner.

July 2005   
Issue Contents >>

Vertasent LLC

Colmar, Pa.


CEO: Fred Allegrezza

Company claim to fame:
Vertasent is kicking off with an ERM (Edge Resource Manager), a new breed of equipment that manages the use of network edge bandwidth. Fred Allegrezza founded Vivid Technology, which merged with Concurrent Computer Corp. in 2001, giving Concurrent a much-coveted VOD platform for Motorola-based cable systems.

Recent news of note:
In June, the company released the beta of the ERM1000. Also on the roadmap is an encryption management system and an asset management system.


Los Gatos, Calif.


CEO: Jeff Miller

Company claim to fame:
Headendware, a platform that places most of the processing power at the headend, enabling even thin-client set-tops to run advanced interactive applications.

Recent news of note:
Jeff Miller named president & CEO, replacing Mike McGrail, who joined the iTV company in 2003 after heading up billing and customer care specialist DST Innovis. Only recently has the company been able to couple its age (it's 13 years old) with deployments, including some with Time Warner Cable, Grande Communications, Cablemas (Mexico) and VNL and NTL in the United Kingdom.

NCTC Members’ Meeting:
San Diego, Calif.
July 31-August 3, 2005

CED Webcast:
"Digital Simulcast—stepping stone to cable’s all-digital future"
August 18 at 11 a.m. ET
Cost: free
Register online
Sponsored by: EGT Inc., RGB Networks, Motorola Inc., Scientific-Atlanta, Terayon Communication Systems

TelcoTV Conference & Expo 2005:
San Diego, Calif.
Nov. 8-10, 2005

Copyright © 2005 Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.


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