Fiber sells ads in cable-TV network
mitch shapiro
The cable-TV industry`s first fiber-based advertising interconnect is expected to deliver advertising spots to cable-TV systems serving more than a million and a half subscribers in the Chicago area by early 1997. Combined with new digital ad-insertion equipment, the fiber network may boost annual growth in the market`s cable spot-advertising market from roughly 10% to more than 25%, predicts Ken Little, vice president of National Cable Communications (NCC).
NCC, the nation`s largest cable spot-advertising firm, serves as the sales arm of the Chicago Cable Interconnect (CCI), a partnership formed by the city`s cable-TV operators. CCI partners include Tele-Communications Inc. (TCI), Continental Cablevision, Prime Cable, Time Warner Cable, Multimedia Cablevision, Jones Intercable and US Cable. TCI is the market`s largest operator, serving more than 515,000 subscribers. Continental claims more than 360,000 subscribers, while Jones--which has put its Chicago systems up for sale--serves more than 250,000 customers.
A key factor in making the fiber interconnect a "relatively economical buildout," explains Little, is the fact that Chicago cable operators already "had enough backbone fiber in the ground" to dedicate two discrete fibers on their internal network to the interconnect. Linking the various operators` fiber backbones to each other, Little says, involved another 70 route-miles of fiber, with a minimum fiber count of 12. Some stretches of the network, where operators expect heavy traffic from other applications, have fiber counts as high as 48 to 96 fibers.
Little says the project took 24 months from the start of planning to network activation. Including digital ad-insertion and switching gear, it cost $4.1 million. Little estimates fiber costs at $1 million, with the remaining $3.1 million split approximately in half between ad-insertion equipment and ADC Video Systems` DV-6000 digital transmission system. Channelmatic is supplying the ad-insertion equipment, while Sony Electronics is supplying the video network`s 10 video file servers.
Using wavelength-division multiplexing (WDM) that employs both 1310- and 1550-nm optical windows, the ADC gear delivers 32 video channels per fiber (16 per window). Initial channel loadings, however, will be only 12 channels per optical window, or 24 channels per fiber. By sending two dedicated fibers north and south from a central insertion point, the network can deliver a unique package of targeted advertising to each of the five zones for the 16 networks now carried on the interconnect.
The interconnect includes 24 switching points that feed signals to 52 cable headends divided into five geographic zones. Portions of the network that serve roughly one million subscribers are linked by a redundant ring.
The network includes three types of sites--active, passive and terminate. Active sites, in addition to having ad-insertion equipment, demultiplexers, receivers and decoders, will also be equipped with repeater shelves that include transmitters, optical splitters and WDMs to extend the network. Passive sites use optical splitters and WDMs, and terminate sites use only WDMs and the necessary decoding equipment. Video signals are received at each headend and switched into the audio/video stream before it reaches the channel modulator.
Ease of execution
Historically, the cable-TV spot-advertising market has been a weak sister to its broadcast counterpart. Cable`s fragmented, franchise-based service areas and the lack of real-time connectivity, says Little, made it "hard for advertisers to have spot ads executed in large markets." As a result, some advertisers and ad agencies tended to shy away from the cable spot market.
Without a network, explains Little, it might have required simultaneous insertion of 52 videotapes to run a single spot ad in all of Chicago`s cable systems. And even then, he adds, precise execution at each headend would be difficult to accomplish, monitor and verify.
According to Little, ease of execution is the main reason for setting up digital fiber-based ad interconnects. He expects the Chicago network to "increase business substantially and to attract new groups of advertisers and ad agencies." Although it may have taken "as many as 60 days to bill an advertiser" in the past, it can now be done "instantaneously and accurately." The fiber interconnect will also allow local systems and advertisers to make more-frequent changes in the ads they run.
With the fiber network in place, NCC will be responsible for regional and national spot advertising, which accounts for 25% of the spot business. These spots will be inserted automatically at the 24 switch points, leaving individual operators free to focus their efforts on the local spot market.
Little says the potential exists for an economical fiber ad interconnect "in any market where enough cable operators have deployed an internal fiber backbone." More typical today are interconnects that use a combination of "bicycling" of videotapes, leased T1 circuits, fiber or satellite distribution. The Chicago project was also helped, he says, by the fact that the market is "condensed" in terms of where cable headends are located.
Detroit fiber interconnect
Little says he has also talked to cable operators in Detroit about a possible fiber interconnect. Noting that a deal had not yet been consummated as of mid-September, he says preliminary engineering work is under way "to understand what fiber has been deployed" to date, so as to gauge the feasibility of a fiber-based interconnect. The Detroit interconnect covers roughly one million subscribers, served by Continental, TCI, Time Warner and Comcast Corp.
According to Wayne Hindmarsh, Continental`s director of advertising sales in Michigan and chairman of the board of governors of the Detroit interconnect, the Detroit market is roughly 70% of the way to a full transition to digital ad-insertion equipment.
Hindmarsh says half of Continental`s eight Detroit headends are linked by fiber, with the other four receiving their advertising spots via T1 circuits. The Detroit interconnect is "still looking at the engineering," he says. And since Detroit`s headends are spread over a larger area than those in the Chicago market, Hindmarsh predicts that some headends are simply too remote to justify a fiber link.
Greg Hall, director of technical operations for TCI Media Services, says TCI "has been aggressive" in deploying digital ad- insertion systems, which should be serving more than half of its subscriber base by year-end 1996.
The Chicago market "is a bit unusual," says Hall, in that almost all of the city`s cable operators have deployed their own fiber backbone over the past few years. He contrasts this with other markets, where TCI and other operators are still grappling with trade-offs between cost and speed of delivery.
In San Francisco, for example, the cable interconnect will be using a third party`s network to help link all of the market`s 32 insertion points. Though TCI`s advertising group represents all the area`s systems, says Hall, it is difficult at this point to justify dedicated fiber links to every headend in these systems.
Other major markets where TCI has a large presence usually employ a mix of fiber and T1 circuits, says Hall, citing Pittsburgh as an example. In Houston, he says, most traffic is transported via T1 lines, while in Dallas the current practice is to physically transport digital storage media from one insertion point to another. q