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Thursday, January, 31 2013

Dynamic VOD may add to cable’s local inventory stockpile

By: Stewart Schley Thursday, January, 31 2013

As long as we’ve been covering the cable advertising business, we’ve heard local cable advertising executives clamor for an essential growth ingredient: more ad inventory from cable networks.

Now, thanks to some new wrinkles in video distribution technology, they may be getting it.

That’s according to Chris Hock, SVP of Product Management and Marketing for BlackArrow , a major technology player in cable’s advanced advertising world. In a briefing yesterday, Hock told me how some early-stage deals are shaping up between cable distributors and national networks as dynamic on-demand TV advertising becomes more common. BlackArrow, which provides platforms that guide commercials into assigned VOD video streams (and then some), has an especially close view of the advanced advertising marketplace.


A significant breakthrough here is the emergence of an industry term known as “linear-plus,” which describes the basic outline for inventory allocation agreements between cable networks and their cable distributors. “Linear plus” means networks generally are providing affiliates at least the equivalent number of minutes in ad-supported VOD programs that the networks provide within linear airings – and sometimes more. So if affiliates normally get 2 minutes of local advertising time per hour from a network – or 1 minute per half-hour – the “linear plus” equation means they’re often getting extra ad time to sell within VOD streams of the same programming.

Arcane though it may seem, any suggestion that networks are willing to offer up more local ad time is a breakthrough for cable companies, especially if it involves marquee content.

But it makes perfect sense. National cable networks depend on cable companies to provide the machinery that enables dynamic advertising – the association of discrete commercials with discrete viewer-selected VOD streams. Without a complex technology ecosystem that involves cable VOD systems and advertising placement platforms like BlackArrow’s, national networks have no way to accommodate dynamic advertising within their VOD programs. Thus, the negotiating leverage here tilts to the distributor side, accounting for more generous allocations of local inventory.

Exactly how that inventory is carved up within a VOD program stream is subject to negotiation, with different networks choosing different combinations of advertising availabilities within programs, observes Hock. For instance, it’s possible that a national advertiser might own the initial pre-roll position within a VOD program stream, and a local advertiser might occupy a mid-roll avail or two. Those arrangements vary by program, and their outcome produces the set of “business rules” that determine which ads appear where within ad-supported VOD titles.


VOD: cable’s solution to the limits of time? (ZoneWire, March 12, 2012)

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