NDS Buys Into VOD Ads With BlackArrow Stake

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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

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