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Canoe to Launch in 4-6 Weeks

4/04/2009 2:00 AM Eastern

Despite complaints that the cable interactive advertising consortium is moving too slowly, CEO David Verklin said Canoe Ventures is gaining speed, gearing up to launch an addressable advertising product — dubbed community addressable advertising — in the next four-to-six weeks.

While that is a bit later than the venture had originally expected — it had hoped to launch in the first quarter — it is at least progress for the year-old venture.

Verklin, speaking on a panel at The Cable Show here, said the product will allow advertisers to target messages to specific zones.

He used American Express as an example, which will send out an ad for its “Green” card nationwide, and at the same time ads for its “Gold” card to the 370 zones where household income exceeds $100,000 annually. Verklin said that about 18 million homes would receive the “gold” card message, while about 42 million homes would receive the “green” card ad.

Verklin also said that members of the venture will continue deploying Enhanced Binary Interchange Format technology, or EBIF, this year; that allows Internet protocol-TV functionality on virtually any set-top box. Comcast, one of the members of the Canoe venture, has already rolled out EBIF to about 10 million Motorola boxes.

Canoe has come under fire for dragging its heels on interactive advertising. Sanford Bernstein cable and satellite analyst Craig Moffett, who moderated the Cable Show panel, joked that he last year called Canoe a “small and primitive boat.”

“A year later,” Moffett said last Friday, “we could add slow and quiet.”

Time Warner Cable chief operating officer Landel Hobbs said that silence should not be mistaken for inactivity. MSOs have been quietly laying the technological foundation for interactive advertising, creating the standards that will make products possible.

“The key to making this work is technical standards,” Hobbs said. “You’re seeing the foundational stones being laid out there.”

But interactive advertising still has its problems, including just what to do with the data that is being accumulated on cable customers, how to use it and how to get more detail.

Turner Broadcasting Systems sales president David Levy said that obtaining more detailed information on viewers is essential for interactive advertising to work.

Levy said the existing data is “too generic. We have to work together to find something that works for ourselves and the cable operators.”

But despite the difficulties, all can agree on the fact that interactive advertising and the Canoe venture could be critical to cable.

“In the industry, there are a lot of things we debate, but there is no debate about Canoe,” Discovery Communications CEO David Zaslav said. “It’s hard to raise your hand and say that having a platform you can customize isn’t anything but a positive.”

Zaslav also commented on the potential threat of online video to operators and programmers. Discovery, he added, has opted to put mostly short-form clips of its shows on the Internet for free, a move to drive traffic to the television. But he said that while operators and programmers are in the same boat, they can’t ignore that a shift in viewing habits is beginning.

“We have to put our content on platforms people are consuming,” Zaslav said, adding that part of the problem was created by programmers who rushed to put all of their content on the Internet for free. He said that while that model obviously doesn’t work for everyone, all parties should be wary of what they ultimately decide.

“We have to be careful we don’t train people to view on platforms that are going to put us out of business,” Zaslav said.

Authentication appears to be a workable solution and one that Walt Disney Co. CEO Bob Iger supported in an earlier Cable Show appearance.

Burke also threw his support toward authentication, adding that Comcast expects to launch a national test of the technology in the summer.

Burke noted that authentication will be critical for cable companies and content owners, who he said derive 60% to 70% of their cash flow from cable.

September