NDS Buys Into VOD Ads With BlackArrow Stake

BlackArrow Raises $20 Million in Third-Round Funding

By Todd Spangler -- Multichannel News, 4/19/2010 4:01:00 AM

NDS Group believes the time is ripe for cable operators to start juicing video-on-demand for advertising dollars.

The U.K.-based pay TV technology firm led a $20 million round of funding into BlackArrow, a startup developing advanced- advertising solutions for VOD whose other investors include Comcast, Cisco Systems and Intel.

With the investment, BlackArrow and NDS will jointly develop advanced-advertising solutions. Ultimately, the companies expect to deliver an “end-to-end solution” that enables addressability, insertion and measurement of advanced TV advertising.

“We believe we’ll be able to come to the market with a solution that will let operators monetize these new forms of advertising,” said Jesper Knutsson, vice president and general manager of sales for NDS Americas. The companies’ product sets are very complementary, he added. BlackArrow’s third round of funding brings it to $58 million raised to date. CEO Dean Denhart noted that each of the company’s existing investors participated in the latest funding.

“It gives us an incredibly strong balance sheet,” Denhart said. “We believe we have more than enough runway to achieve our goals without having to go back to the markets.”

So far, BlackArrow has announced limited trial deployments with Comcast (in its Jacksonville, Fla., system), Bresnan Communications and Fox Cable Networks.

BlackArrow plans to expand product development and accelerate the deployment of its ad-management system to programming networks and on-demand TV content providers in the U.S. and abroad. “With NDS we’ll obviously broaden our reach,” Denhart said. “We’ll use NDS as an arm to get into other parts of the world.”

Denhart said BlackArrow and NDS have worked together for several years, including jointly staging an interactive- advertising demo using the Enhanced TV Binary Interchange Format specification at a CableLabs interoperability event last fall.

Privately held NDS, based in Middlesex, U.K., is owned by the Permira Funds and News Corp. With the investment, NDS will have a seat on the BlackArrow board of directors.

As for whether BlackArrow envisions an initial public offering at some point, Denhart replied, “It’s way too premature to even start guessing about that.”

AT A GLANCE

Snapshot of advanced-ad startup BlackArrow:

Description: Develops systems for managing video-on-demand advertising

Customers: Comcast, Bresnan Communications, Fox Cable Networks

Investors: NDS, Comcast, Cisco Systems, Intel, Mayfield Fund, Polaris Venture Partners

Funding to date: $58 million

Employees: 55

Headquarters: San Jose, Calif.

Founded: 2005

SOURCE: Multichannel News research