Terayon Communication Systems Inc. is branching into the Internet-protocol-TV advertising-insertion space.
The company is debuting new software for its “DM6400 CherryPicker” platform that will help telcos to insert advertising on channels in their video-service packages.
“The new software will be available in January,” vice president of marketing Kanaiya Vasani said. “It’s the industry’s first ‘telco-optimized’ solution. Advertising represents a significant revenue opportunity for telcos.”
The software provides support for MPEG-4/AVC (Moving Picture Expert Group/Advanced Video Compression) encoded digital video in both standard-definition and HD formats, he added.
Just as the cable industry sells local advertising to offset costs and keep a lid on consumer prices, telcos will need to follow that course, Vasani said. Cable operators generated $4.3 billion in local advertising in 2004, he added. And the telcos, through their Yellow Pages, have relationships with thousands of local advertisers.
Vasani said there are about one-dozen CherryPicker deployments among telcos offering video services, including Manitoba Telecom Services Inc. in Canada.
The CherryPicker provides grooming, statistical multiplexing, rate shaping, forward error correction, scrambling and dejitter techniques to video signals over copper or fiber.
Just as in cable, the software Terayon is developing for telco deployments would insert cue tones to signal when ads should be added to the video stream. Telcos will get MPEG-2 streams from programmers and re-encode them into MPEG-4 at video hub offices.
But that conversion eliminates cue tones that are in the original ESPN or Cable News Network feeds. The Terayon software reinserts those cue tones so ads will run in those networks, Vasani said.
Terayon also said it is working with Lucent Technologies Inc. and Nortel Networks Corp. to integrate the DM6400 as part of those companies’ digital-video platforms for telcos.