Local advertising pulls in billions of dollars for cable. But today it takes some heavy lifting to deliver highly targeted information to viewers.
For example, delivering 10 versions of an auto ad, each one with a different local dealer's information appended to the end, requires creating 10 separate pieces of video.
Now, RGB Networks claims it has a cost-effective solution to this dilemma. The video-processing equipment vendor is touting a soon-to-be-available feature of its Broadcast Network Processor to insert graphics, text or video into up to 500 channels simultaneously — all from a single, one-rack-unit-high box.
RGB's digital-overlay feature could insert those car dealers' logos or address data in an ad spot, on the fly, as it is being streamed down to cable viewers.
“Creating different types of ads, depending on geography or the preferences of a subscriber, takes a long time and costs a lot of money,” RGB Networks vice president of product marketing Ramin Farassat said.
Instead, by changing the content in real time, cable operators can generate multiple versions of the same ad which can be delivered to different zones dynamically, Farassat said. “What we believe is going to be needed is the ability to manipulate streams in real time, and to do it across a large number of video streams simultaneously,” he said.
Local ads can be updated much more quickly with such a system, RGB said. A cable company could now go to, say, Safeway and let them on Friday night put information about a weekend sale into ad spots airing the following day.
Cable has a lot of skin in this game. Of the $27.3 billion in ad revenues operators generated in 2006, roughly $4.3 billion came from local ads, according to Kagan Research.
Of course, the ability to insert graphic overlays into native digital video is not new, as RGB acknowledged. Terayon Communication Systems, which is being acquired by Motorola for $140 million, recently announced just such a feature for its CherryPicker video-processing platform.
What's different with RGB's solution, according to Farassat, is scale: The company claimed its ability to insert digital overlays into 500 channels, from a 1U-high unit, is unmatched. By comparison, a Terayon CherryPicker fully equipped with two digital-signal processor cards can process a maximum of 16 unique channels.
“If you're going into a cable environment, you have to deal with 300 to 400 streams,” Farassat said.
RGB's approach also costs less than higher-end digital-overlay systems designed for broadcasters, according to Farassat.
He refused to provide details on pricing, but said the RGB digital-overlay features would cost “hundreds of dollars” per stream rather than “thousands.” The company expects to sell the feature, to be available on RGB's BNP platform by the end of June, on a per-channel basis.
The system can insert static and motion text, static and motion graphics, video or interactive TV applications based on CableLabs' ETV Binary Interface Format (ETV-BIF) specification. The BNP does not generate a new video stream — it modifies an existing one — and operators don't need to modify set-top boxes, according to RGB.
With the digital-overlay feature, RGB's BNP can also take multiple streams, replicate them and insert different linear ads, and then put overlays in real time into each stream, Farassat said.
The BNP platform supports the Society of Cable Telecommunications Engineers' DVS 629 standard for targeted advertising insertion. The digital-overlay feature works with various ad-management servers, Farassat said, including those from BlackArrow and Atlas.
Farassat also imagines these insertion capabilities will give cable operators entrée into discussions with programmers on new kinds of advertising that can't be skipped by digital-video recorders.
Namely, operators could place on-screen banner ads within programming content, rather than just running ads in preset commercial pods. “This technology allows a cable operator to have that discussion with content providers,” Farassat said.
RGB plans to demonstrate the system at the Society of Cable Telecommunications Engineers Cable-Tec Expo in Orlando, Fla., next month.
As a smaller vendor — the San Mateo, Calif.-based company has 75 employees — RGB has needed to demonstrate traction in the market. The company says it's been building up steam, selling $20 million worth of products in 2006, a 150% increase over the prior year.
To date, RGB said that it has shipped 1,500 video-processing units to more than 30 cable and telco customers, including Comcast (which is also an investor), Time Warner Cable, Cox Communications and Verizon Communications.