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Telcos Eye HD Local Ad Solutions

Telcos are increasingly interested in developing local advertising platforms that can insert local ads into MPEG-4 AVC high-definition programming and in setting up ad-insertion systems that will ultimately allow them to deploy advanced advertising platforms, according to Ramin Farassat, vice president of product marketing at RGB Networks, which provides ad insertion technology to both cable operators and telcos.

The interest is significant because an aggressive move by IPTV providers into the local cable advertising business would create more competition for local cable systems at a time when an economic slowdown is already putting pressure on their revenues.

Until recently most telcos had been focused on gaining penetration for their IPTV offerings and had generally been less active in the local cable ad sales business.

But at last week’s Telco TV 2008 trade show in Anaheim California, Farassat said “the telcos were very interested in ad insertion because they are looking for additional ways to increase their revenue from the IPTV infrastructure.”

In those discussions at Telco TV, advanced advertising platforms and technology that would allow them to handle the more complex process of inserting ads into MPEG-4 high-def programming were particularly important.

“They have the bandwidth and the technology to deliver HD and they understand that if they were to add an ad insertion architecture on top of that it would be wrong to ignore HD ad insertion,” Farassat said. “There is a huge amount of revenue associated with that and it is potentially a serious differentiator” from cable operators who are only now beginning to significantly expand the number of HD networks where they insert ads.

About six months ago, RGB introduced a carrier class Modular Video Processor (MVP) ad insertion platform that is targeted to the telco market. At Telco TV 2008 RGB demonstrated the MVP performing ad splicing into MPEG-4 AVC streams encoded by the Tandberg EN8090 Series MPEG-4 AVC HD encoder.

Working as an integrated solution, the Tandberg EN8090 encoder added SCTE-35 cue tones to the MPEG-4 AVC programs. RGB’s MVP product then detected the cue tones and seamlessly and accurately inserted local ads into the programs.

RGB is also working to ensure similar interoperability with other vendors. “We are currently working with a number of different ad server companies to ensure everything is complaint and works together,” said Farassat.

One key advantage of their ad insertion platform is that it can deal with the more complex encoding structure of MPEG-4 AVC HD content, Farassat argues. Because splicing ads into MPEG-4 streams is not the same as MPEG-2, having a system for dealing with MPEG-4 HD content will be increasingly important as operators move to MPEG-4 to conserve bandwidth.

The RGB ad insertion platform is also designed to allow companies to expand their ad insertion efforts step by step from linear networks to systems that dynamically deliver targeted ads based on the household’s demographics and ultimately interactive TV and other advanced advertising platforms.