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Kudelski joins Korean DTH leader to build addressable, interactive ads

Nagravision’s parent the Kudelski Group, which of course owns interactive TV software company OpenTV, says it will work with SkyLife, the leading Kore

By PETER WHITE

Published: 20 January, 2011

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Nagravision’s parent the Kudelski Group, which of course owns interactive TV software company OpenTV, says it will work with SkyLife, the leading Korean DTH pay TV provider with 2.8 million subscriber homes, to introduce an advanced interactive advertising system. The idea is to create a joint venture which will develop the technology, aimed at helping operators offer and monetize addressable and interactive advertising.

Addressable and interactive TV advertising are vital to the future of many aspects of broadcasting and pay TV. Operators dream of reproducing the interactivity of the internet, but also of selling advertising to multiple constituencies at once, attracting far more money for delivering advertising to a given number of viewers.

If everyone watching Top Gear receives car advertising, or if everyone who has a car lease about to expire gets a car advert, but others get something else, that’s addressable advertising, content addressable and demographic addressable. It can also be done geographically. If they can order a test drive from the remote, that’s interactivity. The two together are the great white hope of industries which may well shrink – conventional broadcasting in particular, but also many forms of pay TV in some regions.

The one with the biggest problem is DTH, because the operators supplying it don’t always own a return path. If Network Neutrality was a universally acknowledged concept, that would be no problem, the customer would just need a broadband line, but in some markets it becomes a worse problem because rival operators could block return traffic to a DTH operator.

This is probably the reason that interactivity has been so slow to take off in DTH and no one has a conspicuously successful model that we know of (by all means any reader that can point us at one, please do so).

So there’s a lot at stake and the fact that an operator with multiple millions of customer homes is prepared to act as guinea pig, is a good head start for Kudelski.

The two will use existing Kudelski technologies and SkyLife will deploy it to its entire subscriber base. As part of the system each SkyLife set-top box will have reserved hard disk space for advertising features, addressable commercials and interactive ads. So this will be like push VoD with the relevant adverts being delivered probably not online, but in advance as part of the broadcast delivery. The system could be built entirely without communicating back to central servers but this makes viewing habits and demographics tough to collect on customers. Usually a summary of the clickstream (remote control clicks) at least needs to be returned for anonymous analysis and this offers audience measurement too.

The final job of selling spaces on the hard drives throughout Korea will be managed by SkyLife and once the thing has a clear return on investment, it will be jointly sold by the two companies internationally. SkyLife say it reaches about 15% of households in Korea.

“We are honored to have with SkyLife the partner to create such a new business. Korea is again the world test bed for a new technology solution and an innovative business model. Deploying first our joint Advanced Advertising solutions over SkyLife’s households in Korea will be a major step to develop and refine these advanced technologies and business before launching world-wide,” said Andre Kudelski.

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