Contact: Scott Denne
BlackArrow becomes the latest acquisition target as legacy media businesses seek ways to cope (and maybe even benefit) from the secular shift in television viewing habits. The 10-year-old maker of technology for delivering ads into video-on-demand streams has sold to Cross MediaWorks, a reseller of local TV ad inventory.
BlackArrow’s platform enables cable and other TV service providers to sell ads into DVR and other forms of streaming video (across both Internet Protocol and QAM standards). In addition to the ad-insertion products, BlackArrow has developed a number of capabilities that should benefit Cross MediaWorks in packaging together ad inventory, including software for affiliate stations to manage their inventory – which could have applications for Cross to sell to networks and use internally – as well as an audience management platform to enable customers to develop targeted media plans.
The company was one of several startups that launched in the first half of the past decade to pursue the opportunity to bring some of the ad-targeting techniques of the Web into the world of television advertising. For most of its life, BlackArrow – as well as peers Canoe Ventures, INVIDI, Visible World and THIS TECHNOLOGY – was simply too early. Once reliably large, TV audiences were bleeding into DVR and across a larger pool of cable networks, but media buyers had yet to feel that they needed to buy differently to reach those audiences.
During that period, the company grew to a respectable business of about $20-30m in annual revenue, mostly through its capability to enable advertisements in DVRs. Now these once-early businesses are looking timely. In addition to today’s deal, Comcast took out both Visible World and THIS TECHNOLOGY earlier this year and Verizon paid $4.4bn to push AOL’s ad technology further into the TV ecosystem.
What’s changed is that viewers are fleeing traditional television for online video and video-on-demand services, the largest of which doesn’t even have advertisements in its content. As that happens, broadcasters and service providers need tools and technologies to optimize the audiences they have. Earlier this month, both Disney and Viacom fell short on quarterly earnings due to weakness in TV ad sales. And as surveys from ChangeWave Research, a service of 451 Research, show, the move away from paid TV services is gaining momentum.
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