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Canoe Ventures shuts down iTV business, lays off 120

Thu, 02/23/2012 - 2:56pm
Mike Robuck

Canoe Ventures is scuttling its interactive TV advertising platform to focus on video-on-demand and TV Everywhere dynamic ad insertion.

Canoe Ventures, which was formed in 2008 and is backed by the nation's six largest cable operators, is laying off the 120 employees from its New York City office; the remaining 30 employees will move forward on dynamic ad insertion out of Canoe Ventures' Denver Technical Facility.

Canoe's entire senior management team – including CEO Kathy Timko, chief product officer and former CTO Arthur Orduña, senior vice president of sales and distribution Jim Turner, general manager for interactive television Jonathan Bokor, chief financial officer Neil Schaffer, and chief marketing officer Vicki Lins – will be leaving once the New York office closes on May 23, according to a Canoe spokesperson.

Denver-based Joel Hassell, who took over as CTO from Orduña last year, is the new CEO of Canoe Ventures.

Multichannel News first reported Canoe's decision to close down its iTV operations and New York City office yesterday afternoon.

Canoe Ventures' New York City-based employees will receive severance packages and support resources, such as outplacement services, over the next few months, and they will have access to their offices prior to the closing.

Canoe Ventures launched its EBIF-based request for information campaign in 2010, and it's currently available in 25 million EBIF-enabled households, with Comcast accounting for most of those homes.

"Cable's iTV business will continue through the ad sales teams and video business units at the individual MSOs as they pursue business opportunities with these capabilities within their own footprints," Hassell wrote in a statement on Canoe's website.

The Canoe spokesperson said the decision to shutter the national iTV platform was made over the past few weeks.

"It's not the technology," the spokesperson said. "In fact, we built the nation's largest iTV platform with 25 million households. We were starting to gain some traction in the marketplace, but this analysis we've been going through over the past few weeks with board members, some key MSOs stakeholders, Canoe management and some industry leaders, what we heard loud and clear was that there's a significant opportunity, demand and value for monetizing video-on-demand content across multiple platforms.

"That's what our customers, the national programmers, want the most, and we can also service our owners, the operators, most effectively by pursuing that, too. So it became a fairly logical business decision to pull back on what is a costly and work-intensive venture into iTV and streamline and focus on what is an easier path, and a more valuable and robust business opportunity, with on-demand. Unfortunately, the ramifications of that are to significantly reduce the workforce, cut back on the resources and move in a different direction."

Canoe Ventures started to queue up dynamic ad insertion in VOD late last year, with some trials and plans for a rolling commercial launch this year. The Canoe spokesperson said those rollouts could ramp up now that ad insertion is the company's main focus.

"As we establish our on-demand business, we'll make it easy for national programmers to work with us and easy for our MSO partners to deliver relevant and timely ads," Hassell wrote. "Once we establish the market for dynamic ad insertion within cable's VOD platform, our vision is to offer more robust reporting and data insights, introduce addressable dynamic ad insertion, and support dynamic ad insertion across a wide array of devices both inside and outside the home."

Other cable operators, namely Comcast, have been pursuing their own dynamic ad insertion deployments independent of Canoe Ventures.

Canoe Ventures' decision to focus on just dynamic ad insertion could also play into the hands of several vendors that are big in that space, including BlackArrow and This Technology.

"This Technology focuses on the dynamic ad insertion market, so Canoe's decision to concentrate on VOD advertising aligns squarely with our ongoing efforts," This Technology CEO Jeff Sherwin said. "The industry's experience with VOD DAI has been positive, with real deployments generating real revenue. With the spotlight now on VOD, and increasingly TV Everywhere and IPTV, This Technology remains well-positioned to continue serving the needs of MVPDs and programmers, as well as Canoe, as activity in these areas increases."

Canoe Ventures' legacy
Canoe Ventures started out as a concept, Project Canoe, in 2007. In 2008, Project Canoe morphed into Canoe Ventures, with investments by the nation's six largest cable operators: Comcast, Time Warner Cable, Cox Communications, Charter Communications, Cablevision and Bright House Networks. The goal of Canoe was to pull cable operator, ad agency and marketing resources together for advanced advertising opportunities across a nationwide footprint.

In 2008, former Aegis Media Americas CEO David Verklin was hired as Canoe Ventures' CEO, and the New York City office was opened.

While Verklin was a high-profile hire with lots of contacts in the ad agency world, his contract wasn't renewed last year, and Timko was named as interim CEO. Timko was hired as chief operating officer in 2009 and performed both the COO and CEO roles for Canoe prior to yesterday's announcement.

After previously serving as the technical lead for the cable operators for Project Canoe and Canoe Ventures, Orduña left Bright House Networks to become Canoe Ventures' CTO in 2008.

In 2009, Verklin and Canoe Ventures had to scrap the Community Addressable Messaging (CAM) overlay product after encountering operational difficulties. CAM was slated to be Canoe Ventures' first product launch.

Speaking on a panel at the 2009 Cable Show, Verklin said CAM would launch around the end of May, but Canoe and its MSO backers decided to pull the plug on CAM in June of the same year.

A year ago, Canoe Ventures and the Association of National Advertisers announced the first participants in their Cee Mee project. The Cee Mee study initiative was designed to capture the "Connection, Emotion and Experience" of interactive television viewers and correlate this information with the "Measurement, Efficiency and Engagement" metrics of advertisers.

Last week, Canoe Ventures and the Association of National Advertisers issued a press release that touted the "power of iTV in Cee Mee initiative."

Canoe Ventures also worked closely with another cable operator industry consortium. In 2009, Canoe worked with CableLabs on four advanced advertising specifications, Stewardship and Fulfillment Interfaces (SaFI) that were designed to work in tandem with the SCTE 130 standards.

In 2010, CableLabs and Canoe Ventures announced completion of a retooled EBIF (Enhanced Binary Interchange Format) specification.

While a national platform for iTV advertising has stalled in the water with Canoe's decision to exit, local advertising opportunities still exist, and Canoe Ventures did play a pioneering role in setting the table, according to Paul Woidke, senior vice president and general manager of advanced advertising at Nagra-OpenTV.

"The U.S. cable operators distinguished themselves in the creation of and significant investment made in Canoe; it was a first step in demonstrating the importance with which they are prepared to address the requirements of advanced advertising," Woidke, who is chairman of Working Group 5 of the SCTE's Digital Video Subcommittee (DVS), wrote in an email to CED. "The commitment to advanced advertising technologies and business models embodied in this endeavor demonstrated cable operator support of emerging advertising technologies surpassing the reticence seen in other video distributors. The knowledge and experience gained through Canoe, especially with its continued focus on VOD opportunities, will benefit operators, advertisers and subscribers in equal measure."

Last year, Canoe Ventures announced it would release polling and trivia applications, as well as a new branding effort for iTV, called "ExpandTV," with partners that included its cable operator backers, Cabletelevison Advertising Bureau, CableLabs and CTAM.

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