Video services

BT Trials Ad-Funded Video Service

Fancy downloading some free movies?

BT Group plc (NYSE: BT; London: BTA) is hoping someone will be tempted by that offer, because it's using its existing video download platform, BT Vision Download Store, to conduct a three-month trial of an advertising-funded video delivery service. (See BT Vision Trials Ad-funded Content.)

The operator launched BT Vision Download Store, a pay-to-download video service that can be used by any of the U.K.'s 14 million broadband users, in July 2006, about five months before its IPTV offering limped into service. (See BT Stumbles Into Video World and BT Focuses Its IPTV 'Vision'.)

Now BT is using the download platform to test out the demand for free, advertising-funded content, and see if targeted ad insertion can be successfully deployed. BT has made three movies available for free download: Mischief Night, Played, and The Punk Rock Movie. [Ed. note: Oscar candidates all, surely!]

That's not all the user has to request, though, as anyone wanting to watch the movies will also have to download software from Israeli startup Hiro Media and fill out a form that will enable the Hiro system to insert the most relevant adverts (which can't be skipped) into the movie.

The advertisers involved in the trial include retail financial services firm Norwich Union, roadside vehicle recovery service RAC, and the British Territorial Army.

Hiro's ad insertion technology is also being used by NBC Universal to deliver adverts with free content from its Dotcomedy portal.

Heavy Reading analyst Adi Kishore, author of the recent report, Monetizing IPTV: The Next-Gen Video Advertising Opportunity, says this is another example of a service provider trying to emulate the model deployed by the online giants.

"Targeted advertising is a lot further along on the Web -- Google (Nasdaq: GOOG) ads, for example -- and it has been the Holy Grail for the TV sector for quite some time. The U.S. cable companies are doing a lot of work in this area," says Kishore.

He adds that this is the kind of business model that large operators such as BT can afford to check out.

"This makes a lot of sense, and it's good to see BT trying some new things. That's the advantage that big operators have. They can play around with various financial models, and it makes sense to try and get a second revenue stream anytime you have an audience. "Everyone is looking to monetize their content in as many ways as possible," notes the analyst. "If BT can generate any substantial revenues from this sort of service, that could lead to more attractive pricing offers."

So does BT have anyone using its Download Store? The carrier had not responded to requests for user data as this article was published.

What we do know, from the service's site, is that the most popular download from the store at present is a low-cost short film (3 minutes) of a somewhat adult nature called Rubber Johnny (Googling that title may not be advisable) while Spike Lee's The Inside Man, with Denzel Washington, holds the No. 2 position.

The carrier's regular BT Vision IPTV service, a subscriber-based offer available only to BT broadband customers, has attracted many more customers since Premiership soccer coverage was made available, with BT saying it has now had more than 100,000 orders (though it's not known how many have actually been activated). (See Soccer Kickstarts BT's IPTV Growth and IPTV Growth Gets Euro Pop.)

Adding interactive services and personalization to IPTV services is regarded as vital if service providers are to generate meaningful margins from their TV-over-broadband offerings, and the telecom sector's major vendors are shaping up to offer the full range of hardware and software capabilities that the major carriers might need for their multimedia service strategies. (See AlcaLu 'Ads' to Its TV Program, AlcaLu Buys IPTV Apps Specialist, and Ericsson: Tandberg Is Key to IPTV.)

— Ray Le Maistre, International News Editor, Light Reading

For more on this topic, check out the Heavy Reading report: Monetizing IPTV: The Next-Gen Video Advertising Opportunity

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