Canoe Ventures LLC has confirmed that it will capsize its interactive advertising business and lay off 120 employees as the MSO-led joint venture alters its strategy to focus solely on inserting ads dynamically into on-demand programing delivered to set-tops and IP-connected devices such as tablets, PCs and smartphones.

Following decisions made over the last couple of months, Canoe is also shutting down its New York City office, and its remaining 30 to 35 employees will be based at the venture's operations in Denver. Multichannel News reported the decision Wednesday afternoon.

Canoe CTO Joel Hassell will become CEO of the revised Canoe. The rest of Canoe's senior leadership team, including CEO Kathy Timko and Chief Product Officer Arthur Orduna, will be leaving. An official said the Canoe board is unchanged and that the MSOs bankrolling Canoe -- Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC), Charter Communications Inc. , Cox Communications Inc. and Cablevision Systems Corp. (NYSE: CVC) -- "remain committed to the venture."

Canoe embarked in 2007 and pursued targeted advertising before changing to focus on interactive ads powered by Enhanced TV Binary Interchange Format (EBIF), a software platform that could run on any digital cable set-top. Canoe's MSO partners eventually had EBIF running on 25 million set-top boxes and had been running "request for information" (RFI) campaigns with eight national cable networks, but apparently could not get enough advertisers on board to make the effort pay off. It's not known how many dollars have been spent on Canoe so far.

The revised business focus is "in direct response to what the marketplace told us they wanted," the Canoe official said.

Canoe hasn't set a timeline for the debut of its latest initiative, but the J.V. "was already well down the road toward the launch of national dynamic ad insertion in 2012," Hassell said, in a statement.

Why this matters
While the decision doesn't affect the interactive ad business of individual MSOs, it does deal a significant blow to cable's national interactive advertising efforts. With that effort now run aground, what's left of Canoe will try to help MSOs make money selling ads that can be inserted into set-top-based VoD programming as well as TV Everywhere programming that's delivered over the top.

Dynamic ad insertion on VoD has also had its share of fits and stops, but recent rollouts by Comcast and other MSOs have shown that the platform may be ready to scale and expand as TV Everywhere becomes an increasingly important piece of cable's video arsenal. But given Canoe's flighty history on product focus, cable will need to convince advertisers that the industry will indeed stick with this revised strategy. (See Comcast Signals New Ad Era for VoD.)

For more
Catch up on Canoe's travels through seas both calm and stormy.

— Jeff Baumgartner, Site Editor, Light Reading Cable