IBC: Microsoft Details Telco TV Advertising System

Microsoft Corp.'s (MSFT) TV unit today announced at IBC a middleware adjunct that will enable its telco customers to open a new revenue stream by providing their own advertising across linear TV, video-on-demand (VOD) and electronic program guides.

The announcement was made in conjunction with the International Broadcasting Convention (IBC) Expo, an annual global electronic media confab.

Today, telco TV providers simply pass along national advertising with the content they aggregate, missing the opportunity to sell ads themselves as their cable competition has been doing for years.

Microsoft also outlined a new program it created to help operators migrate to its IPTV software from competitors’ offerings, and an interactive application it helped enable that combines TV programming along with news, weather and sports information.

While telco TV providers would love to cash in on advertising ASAP, they’ll have to wait a while as the Microsoft system will not be available until about mid-2009. The company would not discuss pricing for it or the cost of the services that comprise the migration program.

The creation of the Mediaroom Advertising Platform was largely driven by two Microsoft acquisitions. The first was the $6 billion buy of aQuantive Inc. in May of last year, followed this past June by the purchase of Navic Networks.

“The Mediaroom Advertising Platform opens a whole new world of advertising monetization,” said Terri Richardson, group marketing manager for Microsoft TV. The IPTV software previously lacked any advertising capabilities.

Richardson said Mediaroom customers will need to upgrade their package to gain access to the advertising platform, once it’s available.

The platform comprises two main components. Richardson calls the first the piece that handles the execution of advertising, meaning the introduction of advertising into programming. The second handles campaign and decision management.

One of the potential values of the Mediaroom Advertising Platform is its ability to collect live and ongoing data on consumers’ usage of a carrier’s IPTV system, along with behavioral-type information to determine ad efficacy.

In addition to the ad platform, Microsoft has detailed a program that it hopes will lure users of other vendors’ TV software to its own. Some of the services are free and others carry unspecific charges, according to Ben Huang, director of product management for Microsoft TV.

The vendor claims it has been approached by telco TV providers who have reached the ceiling of their systems’ capabilities, or want to add services and features not available, who are ready to invest in another middleware package.

The challenge for those looking to change TV software platforms would be running two services concurrently during a migration to Mediaroom. Many operators already have their hands full providing a single TV service.

Microsoft execs would not say if any of their current Mediaroom customers, which include AT&T Inc. (T) had committed to using either the ad system.

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