AT&T is set to start serving local ads to U-verse TV customers -- including those sold on its behalf by Comcast Spotlight and Time Warner Cable -- with a broad deployment of BigBand Networks' Media Services Platform for IPTV ad insertion set for the second half of 2011.
BigBand expects AT&T to become a "material customer" for the first time in the second half of 2011, but the vendor declined to disclose details of the deal.
As of the end of March, AT&T offered U-verse services in 136 metropolitan statistical areas in 22 states and had 3.205 million U-verse TV customers. The telco is scheduled to report second quarter 2011 earnings Thursday.
BigBand has been working with AT&T for about four years on the local ad-insertion front, which included 10 months of acceptance testing, according to John Reister, BigBand vice president of advanced technology.
"We're finally into commercial deployment," Reister said. "This is very much a big validation for the MSP."
The BigBand MSP-based advertising application provides for the preparation and transcoding of ad assets, ad splicing into linear TV streams, event reporting to traffic and billing systems, and management using BigBand's Video Management System software. BigBand worked with Microsoft to integrate the MSP with Microsoft Mediaroom, the IPTV middleware that U-verse TV is based on.
Comcast Spotlight in February struck an agreement with AT&T to sell local ads for the telco's U-verse TV service in 21 U.S. markets, including Atlanta; Houston; Miami; Chicago; Indianapolis; Detroit; Nashville, Tenn.; Sacramento, Calif.; San Francisco; and Hartford, Conn.
Time Warner Cable Media Sales' deal with AT&T covers Los Angeles, Dallas, Cleveland, Milwaukee, San Antonio and Austin, Texas, and other markets where both companies are video providers. TWC will sell local ad inventory on U-verse TV across more than 50 ad-supported cable networks including TBS, USA Network and ESPN.
NCC Media, the spot cable sales organization owned by TWC, Comcast and Cox Communications, will manage multi-market buys on Comcast, Time Warner Cable and AT&T U-verse TV services for national advertisers.
AT&T has not disclosed which traffic and billing systems vendor it is using for ads it sells for U-verse TV. BigBand's MSP is able to work with the T&B systems of both AT&T and its interconnect partners using standardized interfaces, Reister said.
The AT&T deployment of BigBand's MSP represents one of the first times local ad insertion will be performed on video in MPEG-4 AVC, according to Reister. "MPEG-2 has been around for years and it's a well understood animal," he said. "MPEG-4 AVC is a bit more complex."
An advantage of the BigBand MSP solution is that it is able to splice ads into encrypted video, without needing to decrypt and then re-encrypt the streams, Reister said.
Down the road, AT&T could use the MSP for advanced advertising applications, such as targeted, interactive and multiscreen ads. "This is something operators in general appreciate, in that they become very familiar with the operations of a platform... and are able to leverage that when they want to introduce new applications," Reister said.
BigBand recently announced that its advertising solutions supported over 1 billion ad transactions in the last year for North American cable operators, through its older ad-insertion products.