Desperate to develop alternative revenue streams for a video business being hammered by competition from IPTV services, Cablevision (NYSE: CVC) has entered into a deal to sell its new addressable advertising products to ESPN and the Walt Disney Company.
The deal, which was first reported by Ad Week on Monday, was confirmed Tuesday morning, during ESPN's upfront presentation to advertisers in New York.
Under the multiyear agreement, ESPN and its broader parent company, Disney, will have the ability to access first-party, census-level audience data, culled from nearly 7 million Cablevision set-tops in the New York market.
The Cablevision data will be combined with ESPN's own database of more than 40 million users and maintained on an aggregated basis, with individual viewers/users remaining unidentifiable.
"The comprehensive consumer insight from this collaboration will enable us to develop a multiplatform model that works on a national scale and ushers in a new chapter in the data and effectiveness story for our advertisers," said Ed Erhardt, president of ESPN global customer marketing and sales.
Added Ben Tatta, president of Cablevision media sales: "We have seen the impact of census-level audience data on advertising measurement and effectiveness first hand--it is truly transformative. Bringing together two leading first-party data sets provides advertisers unprecedented granularity and robust intelligence about the unique value of the ESPN impression."
On April 30 Cablevision announced the deployment of a new addressable advertising product, Total Audience Application (TAPP), that provides census-level data on campaigns delivered over its set-tops. That product is under trial by major ad-buying shops, including GroupM, Horizon Media and Starcom MediaVest Group.
The MSO hopes new revenue streams, including those from advanced advertising, offset declines in its video business.
Thanks largely to competitive pressure from Verizon FiOS (NYSE: VZ), Cablevision said during its Q1 earnings call on May 4 that its video-customer total dropped by 28,000, to 2.65 million, in the first quarter 2015, down from 2.68 million in the fourth quarter of 2014.
Cablevision CEO James Dolan said that Cablevision is seeing a decline in its video-product margin. He compared this business trend to a convenience-store business. "Our philosophy is that video is akin to the eggs and milk in a convenience store," he said. "You have to have it, but you don't make money on it."
- read this Cablevision press release
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