NDS Teams With BlackArrow For On-Demand AdsTakes ownership stake, will integrate technology 4/19/2010 04:23:05 PM Eastern
Set-top middleware and conditional-access giant NDS announced Monday that it has invested in BlackArrow, a San Jose, Calif.-based firm which sells software for inserting targeted ads on either pay-TV or online platforms. The two companies will work jointly on developing advanced advertising systems which incorporate NDS' expertise in audience measurement and addressable advertising, currently productized in NDS' Dynamic software.
U.K.-based NDS led BlackArrow's $20 million Series C financing round and has placed SVP of corporate development Pyrros Koussios as its representative on the BlackArrow board. BlackArrow has now raised $58 million to date, and already counted strategic investors Cisco Systems, Comcast Interactive Capital and Intel Capital as backers along with venture-capital firms Mayfield Fund and Polaris Venture Partners. BlackArrow CEO Dean Denhart said all of those companies invested again in the latest round.
BlackArrow's technology is currently deployed commercially by operator Comcast and is also being tested by programmer Fox Cable Networks. For operators, BlackArrow provides "Decision Suite" software that runs on a generic computer in a cable headend and sits between the traditional "video pumps", such as Motorola or SeaChange video servers, and back-office systems. The Decision Suite software, which for online applications could also sit in a content delivery network, uses both subscriber information and content data to direct the dynamic insertion of advertising based on instructions from the "Sales Suite," a software system for programmers optimized to place advertising across multiple timeshifted TV platforms, whether it be video-on-demand, network DVR content or online video.
Dynamic advertising through video-on-demand has been touted by cable operators for years as a significant revenue opportunity, but VOD advertising efforts have been hampered by difficult technology integrations at the headend and significant workflow changes for programmers who aim to sell targeted spots. NDS VP of New Media Todd Narwid said the company based its investment in BlackArrow largely on its ability to get a real commercial deployment with Comcast.
Denhart predicts that the VOD advertising logjam will finally get fixed, and soon, with many more deployment in the near term.
"There's too much money out there for this not to get solved," said Denhart.
Of course, because of the slow rollout of VOD advertising the bulk of timeshifted programming consumed today is through subscribers' set-top DVRs. Both BlackArrow and NDS see a big opportunity for delivering targeted ads in timeshifted programming via DVRs, by sending spots in advance to the hard-disk storage of the set-top and then inserting them dynamically in place of standard spots. NDS initially developed such "push" technology for pay-TV satellite operators several years ago and is currently in the midst of deploying it, said NDS VP of New Media Todd Narwid, though he wouldn't identify the operator.
"It's a viable platform to reach scale, as DVRs are so widely deployed now," he said.