BigBand Networks has had a rough 12 months, what with internal downsizing, managerial changes and contraction in its QAM business. However, the company’s fortunes just took a turn for the better today with the announcement that AT&T Services will deploy the BigBand Media Services Platform (MSP) as part of its U-verse TV local ad insertion solution. BigBand expects AT&T to become a material customer for the first time in the second half of 2011.
John Reister, vice president/Advanced Technology, Office of the CTO at BigBand, says the AT&T win definitely is an expansion of its business in the Tier 1 telco arena.
"We’ve been a close partner of Verizon’s for maybe five years,” he explains. “They deploy our products in just about every one of their central offices, where (the products) do video grooming and upconversion, placing video signals onto the fiber. But for advertising, this is the first announcement for us of a major telco."
BigBand’s MSP-based advertising solution prepares and splices local ads into national program feeds. Most advertising on cable – about 14 minutes out of every hour of programming – comes from national advertisers and is sold by the program networks. But in every hour of programming, two to three minutes of advertising is sold by the cable operator as local avails. According to Reister, that amounts to approximately $4 to $7 per month per subscriber in ad revenue.
Although video providers aggressively are pursuing such new technologies as dynamic VOD advertising and interactive advertising, BigBand’s solution for AT&T deals only with linear advertising, at least to start.
"Linear advertising today, if you include the full 14 minutes, is around $70 billion in the United States," Reister says. “I think VOD ad revenue is on the order of one or two percent of that. Linear dwarfs everything else. But the MSP platform evolution is toward personalized advertising."
BigBand’s MSP includes the preparation and transcoding of ad assets, ad splicing into linear TV streams, event reporting to traffic and billing systems, and management using BigBand’s Video Management System software.
The MSP product performs MPEG 4 ad insertion. "AT&T uses Microsoft Mediaroom, which is all MPEG 4,” Reister says. “There hasn’t been a lot of MPEG 4 ad insertion done in the industry. We’re proving it’s a viable technology. As we get into multi-screen, it’s going to be critical."
Another key factor about the MSP solution is that it splices ads into encrypted streams without requiring decrypting, splicing and re-encrypting. "In IPTV, they take the streams off the satellite and immediately encrypt them, which in many cases is a requirement of content owner," he says. "The streams now move through the operator’s network and stay encrypted all the way to the set-top."