What We Do

Channel Islands’ Business Model

Over the last ten years, programmers and distributors have been preparing themselves for Addressable (Targeted) Advertising and Interactive TV.  A decade ago several companies arrived on the scene with innovative products and services, however adoption has been slow.  Other than some recent traction with users of pads and smart phones, the promise of these offerings has been disappointing.

Resistance to Addressability & Interactivity

Aside from the obvious barriers due to privacy and compliance, large advertisers don’t see enough benefit from addressability to make it worth their while.  The prospect of higher-value impressions doesn’t offset the increase in CPMs coupled with the burden of training, upgrading systems, re-negotiating contracts, etc.

The resistance from interactivity comes more from the consumer side of things.  A TV set is not a PC, and consumers typically don’t treat it as one either.  Initiatives such as the ”Red Button” (for more information) have been so bleak, that most of these systems have been decommissioned after the enormous expense of deployment.

Another problem is the programmer’s worry about “getting lost in the story”.  If people are “clicking” on apparel or accessories during a show (with the intent of receiving more information or making a purchase), it’s possible the viewer may get lost in the story and ultimately change the channel after such inquiries have been made.  This is the worst possible outcome for the programmer. This is the reason why one industry analyst has commented, “The dogs aren’t eating the dog food.”

In the mean time, the Internet is steadily gaining market share against traditional television viewing as a result addressability and interactivity!  There is a huge disconnect!

Our Solution

It’s not that addressability has no place in the television market; it is quite the opposite.  There is a huge need for addressability, however it must be packaged anonymously.  What’s truly needed are new and robust “applications” for television that happen to be powered by Addressable Advertising infrastructures.  Such “apps” shouldn’t even mention the term addressability!

To fight the resistance to interactivity, consider the PC experience vs. the television experience.  Experts observe the PC is a “lean forward” experience while TV is “lean backward”.  In short, the PC experience assumes the consumer is prepared to navigate.  The television experience assumes the consumer has no desire to navigate unless forcefully compelled to do so otherwise (by requiring a channel change or a skip through commercials).  Therefore, compelling a consumer to “lift a finger” while watching big-screen television is a prohibitively expensive proposition.

The solution for interactivity is to have “apps” that are so tightly integrated within the television eco-system (from Madison Avenue through the Broadcast Data Centers to the Affiliates and then to the disparate Client Devices), that the consumer does not need to lift a finger.  Everything is integrated to the point that these “apps” will run automatically.

Channel Islands – Our Approach

Channel Islands patents and builds “apps” that run on top of Address Advertising Systems.  (Channel Islands has its own Addressable Advertising System, however the “apps” will run on other addressable systems as well.)

The first ”app” Channel Islands is bringing to market is called “Wiggle Room” which provides coupons or loyalty points to viewers who don’t fast-forward while they’re watching advertisements from a DVR.

Here is how “Wiggle Room” is consistent with television idiosyncrasies as described above:

  1. The “Wiggle Room” App is built on an Addressable Advertising System, however it is never referred to as Addressable Advertising.  This “App” is marketed as a Coupon or Loyalty Reward Distribution platform.
  2. The rewards are provided to viewers automatically.  As long as there is no fast-forwarding, the coupons, discounts, loyalty points and even jackpots are distributed automatically – without a single finger lift.
  3. The “Wiggle Room” system seamlessly integrates with Campaign Management systems for broadcast networks and operator (MVPD) networks alike.  There is very light client software in set-top-boxes, however Smart TVs, PCs, Phones and Pads require simple downloads.  “Wiggle Room” is a completely integrated system (from Madison Avenue to Broadcast Data Centers to the Affiliates and ultimately to the various Client Devices).

In the end, Channel Islands offers next-generation “apps” that resides on top of Addressable Advertising systems, offering value to all stakeholders in new and innovative ways.

Avoiding End-Around Solutions

There are a number of “End-Around” solutions that exist today that are getting some traction in the market.  These solutions require viewers to use their Smart Phones to detect audio watermarks embedded in the audio content in order to accumulate reward points or coupons.  Given these solutions require consumers to activate a detector, it’s an approach that is counter to the typical “couch potato-style” television viewing.  This is why these solutions tend to gain market acceptance early on (when high-value rewards are first offered), however quickly plunge when effort vs. reward scenarios normalizes.

The Future

Channel Islands is in the process of building new “Apps” for Addressable Advertising systems.

Stay Tuned!  You’ll see a lot more from Channel Islands in the coming months!