The Cable Industry Starts “Canoeing”

The cable industry started to push for progress in the addressable advertising space. Over the past two or three years, they have been working on a set of addressable advertising standards, known as DVS 629. Now they are trying to put these standards under real-world test with the public announcement of the Project Canoe on March 10. The “Canoe” is now officially a joint venture of the six major cable operators, namely Comcast, Cox, Time Warner Cable, Cablevision, Charter Communications, and Bright House Networks. The six cable MSOs chipped in a total of $150 million to kick off the venture with Comcast reportedly investing the most: $50 million.

In a nutshell, Canoe will help pave the way for the cable MSOs to sell addressable ads on a common platform across many different cable systems. The exact role of Canoe is still less defined, but we speculate that Canoe will eventually evolve into an ad sales unit (like Comcast’s SpotLight) and act as an intermediary between ad buyers and publishers, in this case, the cable systems. What is uncertain is whether the joint venture will take on the responsibilities of supporting ad delivery infrastructure and ad tracking: the former function is currently taken up by individual cable MSO and the latter one is outsourced to Portland, OR-based Rentrak.

We have long argued that the cable industry should move faster to address all the key challenges it faces in serving more targeted ads. In our latest advertising report, we highlighted five major challenges particularly for the non-linear part of the cable business, including:
-Lack of compelling content on VoD
-Difficult to meet future on-demand bandwidth need
-A diverse network infrastructure and CPE platform
-Lack of ad delivery standards
-Less experienced ad sales force and complicated selling process

We are pleased that the cable industry is gradually filling the gaps on these five fronts, and the Canoe venture will address, at least partially, the last three challenges listed above. In our view, they should move faster, and they have to, because new media, the Internet video in particularly, has shown its potential to not only steal ad dollars from TV broadcast networks but also cut into the capability of the cable TV industry to generate more ad sales. The cable industry perhaps already regretted secretly about their slow reaction to the telcos’ fiber strategy; they should not miss the boat again this time.

Maybe changing the joint-venture’s name to “cruiser” will help.