Will Canoe's Collapse Ignite the iTV and Addressable TV Business? Yes!

From 2017 to 2020 the iTV and addressable advertising business promises to be the single most explosive growth category in the television and advertising industry With the recent and notsosudden collapse of Canoe Ventures industry pundits and executives are questioning the future of interactive and addressable television advertising My conclusion is that this is a wakeup call for the industry and will be a spur for expansion and growth In my annual Advertising and Marketing Data and Forecasts I project steady growth for iTV and addressable advertising for the next halfdecade followed by quothockey stickquot acceleration through the end of the decade as advanced settop boxes are fully deployed as applications become readily available across multiple platforms as control over and monetization of usage data is defined and as both distributors and networks as well as marketers have welldefined economic incentives Jack Myers Media Business Report Jack Myers Media Advertising and Marketing Data ampamp Forecasts 2010 2020 INTERACTIVE TELEVISION ADVERTISING REVENUES 000000 amp160 amp160 amp160 TOTAL amp160 REVENUES CHANGE 2010 50 1500 2011 70 400 2012 119 700 2013 262 1200 2014 484 850 2015 1090 1250 2016 1962 800 2017 3531 800 2018 5296 500 2019 7150 350 2020 9652 350 Source Jack Myers Media Advertising and Marketing Data ampamp Forecasts 20102020 Two weeks ago Canoe formed in 2008 by the six largest US cable operators Comcast Time Warner Cable Cox Communications Charter Communications Cablevision Systems and Bright House Networks closed its New York office and laid off 120 employees including CEO Kathy Timko leaving about 30 employees in Denver to focus on VOD ads as its sole product After three years of testing and development plus the investment of several hundred million dollars Canoe had enabled the delivery of interactive TV ads to more than 25 million cable homes nationwide across eight cable networks AMC Bravo Discovery E History G4 Style and USA NetworkNewly appointed Canoe Ventures CEO Joel Hassell formerly the company39s CTO saidquotCable39s ITV business will continue through the ad sales teams and video business units at the individual MSOs as they pursue business opportunities with these capabilities within their own footprintsquot It39s a smart move for the industryLast June Jack Myers Media Business Report in a report on Canoe39s lack of progressadvised readers quotThe key question confronting the industry during the next several months is whether Canoe Ventures will be the organization designated to lead iTV and addressable advertising growth through this decade quot I questioned the quotsincerity of the cable industry39s commitmentquot and suggested that while generating significant publicity Canoe has failed to achieve the ambitious goals outlined early in the company39s developmentBut as spelled out by former Canoe CEO David VerklinquotIf you are in a business that is growing in low single digits you want to pay attention to advanced TV which is one of few growth opportunities out there Selling linear 30second commercials without advances is a recipe for serious challenge on Wall Street and Madison Avenue The linear 30 has to evolve on TVquotCriticisms of Canoe39s advertising platform included it was too expensive as an incremental addon to existing advertising campaigns the audience footprint now and into the foreseeable future did not represent a scalable business TV salespeople are not the best advocates for ITV nor are they trained in the skills required to adequately represent and manage ITV campaigns Agency TV buyers are not the appropriate targets for advancing arguments for ITV campaigns to corporate chief marketing officers and brand managers who often must be engaged and involved in the decision to approve ITVWhile the shutdown of Canoe is a PR black mark for the cable industry it is just one in a long line of failed cable industry initiatives to advance interactivity beginning with Warner Communications39 QUBE in the 1970s and Time Warner39s Full Service Network both of which failed to meet even the most conservative business goals although technologically they exceeded many current ITV achievementsWhile Canoe was the largest collaborative infrastructure ever attempted by the US cable industry the focus on interactive development requires a clear economic incentive for cable operators which Canoe did not provide Advanced settop box applications will become more universally deployed as they are in Cablevision systems Marketers will shift larger shares of their ad spending to digital opportunities that deliver a targeted twoway communications path Cable distributors and TV networks led by ComcastNBCU will have the economic incentive to make interactivity and addressability a priority Similarly advanced technology will enable large media agencies to structure arbitragebased economics that assure profitable addressable advertising modelsIn the next 24months the battle for control of settop box data will be resolved While Google is reported to be selling the Motorola settop box business they recently acquired it39s more likely they will seek to advance their Google TV platform and datausage right through deals with cable and satellite operators dramatically rampingup addressable TV activity Whether it39s mined by Google Accenture Cisco or any one of several companies settop box data is treasure waiting to be tappedLast June Verklin just weeks away from announcing his resignation from Canoe commented quotWe need to ignite the market and it is a challenge Our final piece is marketplace ignitionquot Ironically the departure of Canoe from the iTV and addressable advertising business may be the spark that finally ignites the fireThis next twoyear period will be one of turmoil disruption and debate in the iTV and addressable advertising business followed by 36months of organizational focus and accelerated growth From 2017 to 2020 the iTV and addressable advertising business promises to be the single most explosive growth category in the television and advertising industryYou are receiving this email as a corporate subscriber to Jack Myers Media Business Report Redistribution in any form except among approved individuals within your company is prohibited As a subscriber you have full access to all archives and reports at wwwjackmyerscom If you require your ID and password contact maryannjackmyerscom

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Will Canoe's Collapse Ignite the iTV and Addressable TV Business? Yes!

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Will Canoe's Collapse Ignite the iTV and Addressable TV Business? Yes!

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