The iTV Doctor Is In! The Canoe Story, Chapter One: The CEO

Dear Readers:

When Canoe Ventures decided to close down their iTV operation and concentrate on dynamic ad insertion for VOD, they made a decision to throw iTV advertising development and deployment back into the hands of the individual operators and programmers. That was probably the only reasonable business decision for the Canoe partners, given the slow pace of adoption of single-screen iTV advertising by the marketplace.

While the decision was expected by some and shocking to others, it might actually accelerate the operators' role in interactive video by absolving them from a commitment to outdated platforms and data restrictions, allowing them to use the substantial power of their network. It may be easier to connect the cable operators through technology than it ever was in the boardroom--and satellite and telco might even join in the fun.

There's even a model for that with local ad sales, with local market reps breaking the cross-platform barriers to accumulate mass from the local cable and telco systems along with the satellite subs within a given DMA.

In fact, based on some of the 50+ conversations your friendly neighborhood doctor has had with industry execs since February 22nd, the Canoe decision may be liberating. After five years of adhering to a strict set of business and technical rules, both operators and programmers are free to pursue their own agendas.

But there is fallout from the decision, and hopefully lessons to be learned. A number of companies made the commitment to Canoe and now find themselves struggling with the new reality. The following reflects a mix of comments all blended into a single character. In subsequent chapters of The Canoe Story we'll highlight different companies and different players: amalgams from top management, sales, marketing, design, deployment, engineering and more. There is no single CEO in the following story--this is a composite character. All comments and opinions, however, are taken directly from personal OFF THE RECORD interviews.

The CEO

The tweets have subsided. The headlines are gone. All that's left are questions.

On the night of February 22nd, after the announcement of the closing of Canoe Ventures, the CEO of a software company who had a long-term contract with Canoe, was tossing and turning without sleep.

In his meetings with Canoe, the CEO always had an uneasy feeling about Canoe's view of the world. Sky-high McKinsey forecasts and expense budgets to match. Those big numbers might have put a huge target on Canoe's back as the end came near.

But in the world of interactive television, Canoe was too important--too big to fail.

He felt gutted when he heard the news earlier that day, and had been in emergency meetings and conference calls all afternoon with his senior staff, with his customers and with his sub-contractors. Finally he got out of bed and did what he'd been avoiding all day--he went to his computer and opened his five-year forecast. Line 17: Canoe Ventures. With one click he deleted the line, and according to the revised forecast from his CFO, that meant between seven and nine positions would have to be eliminated.

Then the CEO continued down the page and looked at all the projected revenue from companies who were Canoe partners and customers. Three more positions...three more people if we lost line 18. Four more on line 19. Two more on line 20.

That's between 16 and 18 people whose jobs were created for Canoe, and now those jobs are gone unless he can scramble and re-direct. But those are single-screen jobs--EBIF jobs: Canoe jobs.

The CEO had made the decision early on to focus on EBIF. That's what the operators wanted them to do. And the CEO put off his company's other development efforts because, well, you can't do everything. And the Canoe partners were very clear on one thing, and he heard it loud and clear at the CTAM Summit in 2009: if you are a programmer who wants to work with the six Canoe Ventures Partners, go through Canoe. The appetite for "one-off" iTV applications had waned. It had become a standards-based, template-driven world.

But EBIF was slow to deploy, and once it got there it couldn't do much. "Is that all there is?" was repeated so often they could have put it on a bumper sticker. And now that iPhones, iPads and the rest can deliver wonderfully entertaining and engaging experiences that complement television programming, all the Canoe RFI could do was highlight any of three buttons on the bottom of the screen.

Too Little.

Too Late.

And he heard nothing but complaints from the advertisers about using the information from a Canoe RFI. Response by USPS Mail! And only single use of the respondent's name and address. The ad sales folks he knew told him the RFI product was so watered down that they were embarrassed to talk about it.

Then one of his customers told him today, "Canoe set interactive television back a decade."

No. That's not right. The CEO believed in single-screen interactivity, at least for the quick and easy stuff--voting and polling, even RFI if they could use email and fix the data problems. This election season is tailor-made for single-screen. At least it should be. The fancy stuff--IMDb links, pictures, videos, contests and loyalty programs--is probably best suited to the more competent companion devices.

After the Canoe announcement broke, he called his customers. He spoke to the right people and got the only possible answers: "We like you. But we don't know what's going to happen. We're committed to interacting with our viewers and our customers. We like it, they like it. It's popular. But frankly it's faster, easier and cheaper on other platforms than it is on cable."

Cable has to get it together. The CEO knows the big operators are working on smart boxes--smarter than phones and tablets. They can have a universal open platform that scales very easily. They can turn your HDTV into a 52" iPad. But we can't have typical slow cable deployment. The market won't wait.

The closing of Canoe and its impact on the industry has been the topic of magazine cover stories, endless blogs and sell-out panels. But your friendly neighborhood doctor wants to focus on the people involved--and there are many, many hundreds of people who are feeling the impact of the closing of Canoe. In subsequent columns we'll talk to people in the ad sales community, the development and deployment folks, and maybe even an engineer or two. Stay tuned.

 

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The iTV Doctor is Rick Howe, who provides interactive video consulting services to programmers, advertisers and technology providers. He is the recipient of a CTAM Tami Award for retention marketing and this year was inducted into The Cable Pioneers. He is also the co-author of a patent for the use of multiscreen mosaics in EPG's. Endorsed by top cable and satellite distributors, "Dr" Howe still makes house calls, and the first visit is always free. His services include product development, distribution strategy and the development of low-cost interactive applications for rapid deployment across all platforms.

Have a question for the iTV Doctor? Email him at itvdoctor@itvt.com

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