Cable MSO Charter Communications has selected Atlanta-based Video Networks Inc. (VNI) to create a national network that will digitally deliver commercials to Charter's 370-plus cable headends.
Under a five-year deal valued at over $10 million, VNI will provide Charter's headends with MPEG-2 receivers that will receive digital spots transmitted via satellite and then port them to Charter's existing SeaChange and SkyConnect digital ad insertion systems.
Charter's idea is to completely eliminate the operational hassles associated with receiving commercials on videotape and delivering them by hand to headends. "We don't intend to send anybody out to the cable headend again, unless it's to do regular maintenance of equipment," says Wes Hart, vice president of St. Louis-based Charter Media. He says Charter's goal is to use VNI to have the entire network up and running by the third quarter.
VNI's digital delivery system encapsulates spots as IP packets and transmits them via the GE-1 satellite, then uses the Internet to confirm that the spots have been received. Charter has been using the system since late 1998 in its Wisconsin operations, which are scattered over a wide geographic area. By switching from tape to satellite delivery, Charter's Wisconsin headends were able to go from inserting different spots once a week to inserting new spots on a daily basis. That doubled Charter's revenues in Wisconsin, says Hart.
"It's had a huge impact on revenue," he says. "Trying to do 42 different headends, you can't do that on a daily basis effectively. There are too many ways to screw up. By taking the human element out of it and delivering via satellite, I can literally get a spot on the air in 10 minutes 400 miles away."
Although VNI distributes 10 million cable commercials a year, the Charter deal is a "breakthrough application" because of its national scope, says VNI's Dana Michaelis. In addition to installing gear at more than 400 Charter headends, VNI will also link with 13 Charter regional operations centers and 22 Charter sales offices.