Will Cloud-Based DVRs Seek an Ad-Vantage?

Fabrix, RGB Show New Insertion Systems
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Fabrix Systems and RGB Networks — two video-technology developers with ties to cable operators — are looking to bring some new advertising opportunities to the cloud DVR, a product category that is now just starting to take hold in the U.S.

At last week’s National Association of Broadcasters show in Las Vegas, Fabrix demonstrated a targeted ad-insertion system for cloud DVR set-ups that runs on a software platform that handles video storage, transcoding and distribution on off-the-shelf servers. It claims that its approach is flexible enough to support policies that require the making of an individual copy per household, or copies of recordings that can be shared among multiple subscribers.

“It’s up to them [the customers] to decide,” Mario Rainville, Fabrix’s vice president of sales and marketing, said.

Fabrix has “large deployments” with more than 10 tier-1 service providers in North America and Europe, but hasn’t publicly identified any of them. However, multiple industry sources said Fabrix is playing a key role in Cablevision Systems’ “Multi-Room DVR,” an iteration of a cloud DVR that makes individual copies of each recording requested by subscribers. That model is also being used by Comcast, which has launched a cloud DVR product in Boston and the Philadelphia area, with Chicago among the markets that are on deck.

Fabrix is now working on a targeted dynamic ad insertion (DIA) system that, in some ways, mimics one that is already being used for cable-delivered video-on-demand services, but also leans on a programmatic- style ad-management system that somewhat automates the ad-buying process.

In addition to replacing the ads in a recorded program that can be targeted based on demographic data, Fabrix is developing a real-time bidding element that decides which ads are spliced into the system and played out with the recording. At NAB, Fabrix demonstrated this idea issuing a campaign-management system from Videology, according to Rainville.

In addition to replacing the existing ads, the system is also capable of extending the length of the original commercial break, he said.

While that might not be the sort of thing that would excite consumers and might run astray of current cloud- DVR policies, Rainville insists that it’s just one option that distributors and programmers could pursue.

Adding dynamic, real-time bidding “has the potential to change how people view cloud DVRs,” Rainville said.

RGB, which counts Comcast among its customers, used the NAB show to roll out ad-insertion capabilities for its CloudXtream platform for multiscreen video services and network DVRs. RGB said it is in discussions with “several large cable operators” and expects to begin customer trials of CloudXtream soon, with production deployments of CloudXtream expected by the end of this year.

Tim Hanlon, founder and CEO of The Vertere Group, said dynamic ad insertion, as a general proposition, is becoming inevitable as more TV is watched via VOD, local- and cloudbased DVRs, and other time-shifted environments.

Programmers, he said, will be on the hook for delivering advertising “in whatever mode the consumer is watching it.”

Advertisers will want to pursue new ways to reach consumers as linear TV models continue to give way to other methods, he added.

“It’s hard to cling to old currencies when consumption is happening in nontraditional environments; the advertising [side] needs to be rethought,” Hanlon said, but noted that how the Supreme Court views cloud storage in its review of the Aereo case with broadcasters could deliver a “watershed moment” for insertable advertising in cloud DVR environments.

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