with Chris Pizzurro, Head of Product Sales & Marketing, Canoe Ventures
Perusing the marketing material of Canoe Ventures, the JV launched by Comcast, Cox Communications, Time Warner Cable and Bright House Networks seven years ago to focus on advanced advertising solutions for the cable industry, you'd think you were driving by a McDonald's. In November, for example, Canoe touted 10 billion impressions served, a major milestone in the business of dynamic ad insertion (DAI) into cable video-on-demand. In April, the joint venture said it had served up 2.56 billion impressions, just in the first quarter of 2015 alone.
Describing Canoe's upward trajectory, Chris Pizzurro, head of product sales and marketing for the group, breaks out the old hockey-stick metaphor. For anyone who has been closely following the trajectory of Canoe's puck, this is a bit of a surprise. Canoe was formed in 2008 to leverage cable industry tech into next-generation advertising products. But the pointy-headed dream appeared dead in February 2012 , when Canoe announced that the bulk of its 129 employees were being laid off and only Pizzurro's small team was being retained to focus on cable VOD.
At the INTX show in Chicago earlier this month, FierceCable gave Pizzurro a cup of surprisingly decent NCTA-purchased press room coffee and sat down with him for a little Q&A. Here's what he had to say.
FierceCable: So how did you get involved with Canoe?
Chris Pizzurro: A little over four years (ago), I was brought on at the tail end of Canoe 1.0, first as a consultant for the VOD business, so I wasn't part of the other existing businesses. Six months or eight months in, that's when the board came in and refocused the company, and they basically said that my product would be the product people are going to focus on.
FierceCable: How does cable VOD dynamic ad insertion differ from the original advanced advertising visions of Canoe, as laid out back in 2008?
Chris Pizzurro: There was a broader focus in terms of various products, but when you look at what the charter originally was, we actually held true to the charter. The products became a whole bunch of things, but the charter was how do you take the assets of the joint venture participants and how do you leverage that collective asset for the programmers' benefit. That was the founding premise of what we do. It's what we do now. We thought, maybe that's through big data. OK, that didn't work out. Maybe that's through addressable advertising. Well that didn't work out. Maybe it's through interactive TV. That didn't work out, either. So, sure, the other lines of business didn't work out. But the actual charter does hold true to what the original premise was.
FierceCable: Why did the Canoe gods pick your vision and your team?
Chris Pizzurro: The board looked both externally and internally. The issues with the other products were both external and internal. They looked holistically at everything and asked their programmers, externally, if we had to focus on one thing, what do you want it to be? And they looked internally, and said what are we willing to support? Are we looking to buy more infrastructure for this? Do we have the infrastructure for this? They were smart enough to look internally and ask, what can we support? I was lucky enough because all roads led to the VOD product.
FierceCable: What was the original vision of the VOD product?
Chris Pizzurro: We had a overall premise both from a technology point of view and a business point of view, and that was keep it as much like linear TV until it isn't. That was a guiding philosophy for everything. On the business side, if there were existing business relationships, or existing things that just worked, we kept it in place. Whether that was a relationship between the programmer and an MSO--if there were things that just worked, we said let's adopt or keep as much of what works as we can until it needs to be changed because the nature of on-demand.
From a technical point of view, we said, lets just focus the technology on getting VOD to parity with who programmers schedule on linear TV, because it wasn't there yet. The second layer on top of that was, how do you leverage existing technologies? We're not here to create new business models, we're not here to create new technology. It was all about just leveraging existing things out there.
That's where companies like Black Arrow come into play. We said, if there's already someone who's there and we can leverage in different ways, we're going to partner with them, we're going to integrate with them, and we're going to do whatever it takes, instead of saying we have this big widget. You have to buy the widget from us and force it down everyone's throat. It's a very open architecture.
FierceCable: Explain the seemingly intertwined relationship between Canoe and Black Arrow.
Chris Pizzurro: Two things we do is one, assemble the footprint across MSOs. And once that footprint is assembled, we wholesale the capability to the programmers. When it comes to assembling the footprint at various MSOs, we don't tell an MSO what equipment to buy or what to do. All we say is, here is a base set of features and functionalities that we need the technology to do. And you guys purchase and do whatever you want to do as MSOs.
Black Arrow to us is a vendor, supplier, partner of various MSOs and how they're building out their stack to our specification. We do the same thing with the programmers. We say, here's this wholesale capability. But if you have a campaign manager that you already use to put campaigns into your linear system or your Internet system, we can leverage that also, you don't have to use our campaign manager. Again, it speaks to the philosophy of just leveraging tools people already have.
On the programmer side, we have an integration with a company called FreeWheel and their campaign manager. We integrate with Google, we just announced we're doing an integration with Broadway Systems on the linear side. To us, Black Arrow or FreeWheel or Google, they're all just partners who our partners already use. Through that philosophy is how we've gotten so far, so quickly. We offer ourselves as an ecosystem solution and not some turnkey system you need to buy.
FierceCable: You published a recent report that said VOD DAI is more engaging than linear TV. Why would that be?
Chris Pizzurro: The consumer is very engaged. As opposed to linear, where you may susceptible to channel changing and those sorts of things that have been in the market for years. Or as opposed to DVR, where you'd be susceptible to fast-forwarding or rewinding. In VOD, for the most part, someone navigated through a menu to find your program. So right away they're in a different state than just, I'm going to flick on the TV and see what's on. So it's heavy appointment viewing. They've made a conscious effort to find a program through the menu. Then when they get there, they tend to sit and watch. They put the remote down. And they watch their program all the way through. It's basically a mini-movie.
FierceCable: How many people work for Canoe?
Chris Pizzurro: Still the same 38 we had when we restructured the company three years ago.
FierceCable: What's the latest count on impressions?
Chris Pizzurro: Our latest count that we published for Q1, we did 2.5 billion ad views in Q1. When you compare that to all of 2014, we did 6 billion for the year. So we're already on a trajectory to blow away last year.
FierceCable: What does that mean to monetization?
Chris Pizzurro: Frankly, I don't know. I leave that to others. It's such a moving target. I just know from our point of view, we expect at least 2X this year over last year in terms of impressions and therefor revenue. My goal is at least 2X and frankly blowing that away. I kind of leave those predictions to other folks who want to make them.
We know, at least from our business point of view, we have 65 networks running on the system. I already have 120 who are under contract. So we already have another 60 in the pipeline that we'll be bringing on. That steady growth is guaranteed. That hockey stick is guaranteed--just bringing on new networks. Period. That's not to mention to mention more MSOs, more clients, more impressions, more ads.