visions of establishing its own version of a 5 million-subscriber national sales interconnect can become a reality for Charter Communications Inc., due to its newly signed multiyear agreement with Video Networks Inc., ad-sales chief Wes Hart said last week.
In addition, the multimillion-dollar Charter-VNI agreement will allow the No. 4 MSO to streamline its video-distribution and back-office processes, while moving it toward paperless transactions with ad agencies, the companies said last Wednesday.
Hart-vice president of Charter Media, the MSO's ad-sales unit-said this project will "mimic a hardwired interconnect," while also trimming the costs of its current reliance on phone lines.
VNI CEO Michael Eckert said his company will also help Charter to "solve its problems of communicating with systems that are widely dispersed and its commercial-distribution problems."
Satellite delivery of spots via VSAT (very small-aperture-terminal satellite technology) will lower the MSO's distribution costs, he said, while VNI's end-to-end managed-network solution will gradually enable the MSO to streamline its sales process and eliminate videotape and paper.
VNI vice president for local market sales Dana Michaelis said the company's involvement "will kick in late summer or early fall." Hart more precisely said this system "should be 80 percent functional by the beginning of the third quarter and fully functional by the end of the third quarter."
Charter signed the deal, he added, after having been pleased with the successful implementation of VNI gear at its Wisconsin systems-which were originally part of Marcus Cable-since the first half of 1999. But now, the number of headends will be multiplied by 10, from 40 then, Hart noted.
Those Marcus systems were better able to service theirlocal clientele, they enjoyed cost savings from a less labor-intensive transaction process and they "doubled their ad revenues from faster change-out of inventory" and from making cable-time buys easier, Hart said.
Faster copy changes and the like have made local cable more attractive to accounts with time-sensitive copy-for example, in the political, retail and movie categories-he noted.
"Automation of the back end of the transaction process will occur first with the systems and ad agencies," Eckert said, adding, "Later in the year, automation of the front end will follow, from calls for avails to contract and contract changes."
All told, "at minimum, 372 Charter headends will be affected," he noted, adding that the count could rise to more than 400 due to acquisitions.
Charter will keep working with its existing digital ad-insertion and backroom systems, with some modifications, VNI chief technology officer Joel Fabiano added. Moreover, VNI's system can translate Charter's disparate traffic-and-billing systems "to communicate seamlessly with each other," the companies' joint statement noted.
As the MSO's digital-cable rollout progresses, Fabiano said, digital-into-digital ad-insertion upgrades will be made "in a seamless way," as well.
Hart said Charter's interconnect concept is unrelated to either National Cable Communications' consolidation plans for the top 50 DMAs or CableUSA Inc.'s proposal for a nationwide interconnect covering the top 30 DMAs.
VNI worked closely with NCC last year to make national spot buying more buyer-friendly by implementing electronic data interface in 100 of that cable-rep firm's markets, the executives said.
"We're linked [for EDI] to agencies representing 80 percent to 90 percent of spot cable," Eckert said. In the next step, planned for later this spring or summer, "VNI will introduce similar products into the local cable market," he added.
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