Dolby has revealed the first new product to stem from its acquisition of THEO Technologies in summer 2024—a deal which was deliberately dressed up as the secret ingredient to spice up the Dolby.io streaming platform and its unique cross-selling potential.
THEOads is the latest innovation, based on server-guided ad insertion (SGAI) technology. This is pitched as a new approach to ad insertion in live streaming that aims to balance monetization with an uninterrupted viewer experience—building on THEO’s reputation in solving the persistent challenges of latency, compatibility, and engagement across devices.
Traditional approaches to livestreaming ads often disrupt the viewing experience, leading to audience drop-offs. During a live webinar this week, Dolby’s Dan Coffey, Director of Product Owners, emphasized that ads should never be a reason for viewers to leave a stream. Poor ad experiences, including disruptive interruptions and inconsistent playback across devices, can be costly for content providers in terms of both revenue and engagement.
The SGAI approach of THEOads offers client-side ad insertion (CSAI) with novel formats, but without the usual drawbacks associated with CSAI, such as increased latency and high operational costs. The technology builds on principles that companies like Disney have been using for years but makes them more accessible and adaptable for a broader range of streaming services.
A demo showed how ads can be synchronized frame-perfectly across devices while being optimized for different screens. Rather than forcing the same intrusive ad break across all platforms, THEOads dynamically adjusts the ad format based on the device.
For instance:
- Big Screen TVs: Instead of a full-screen takeover, which can feel jarring, an L-bar format keeps the live content visible while an ad plays in a side panel, complete with a QR code for a second-screen experience.
- Tablets and Laptops: A double-box format keeps live content running in one window while an ad plays alongside it. This setup is ideal for maintaining engagement during slower moments in sports or other live events.
- Smartphones: Traditional full-screen ad replacement is still an option, but THEOads ensures seamless integration so that viewers don’t experience awkward breaks or excessive buffering when ads start.
Eager to stress the flexibility of the software, THEOads can extend beyond ads, such as showing highlights alongside live content, allowing for instant replays without interrupting the main event.
This feature is particularly beneficial for sports streaming, where missing live action due to an ad can be a dealbreaker for audiences, yet speakers during the webinar reminded attendees that THEO is also present in live casino gaming, auctions, and other interactive streaming environments, where THEOads will be well suited.
Crucially, THEOads supports both SCTE-35 markers and a scheduling API, giving content owners full control over when and how ads are triggered. This adaptability ensures that even streams without embedded ad markers can deploy THEOads for monetization. The ability to insert ad breaks at key moments—rather than arbitrary intervals—maximizes revenue potential while keeping the experience smooth.
Beyond direct advertising, THEOads also allows for image overlays that display relevant information without obstructing the primary content. This could be used for real-time statistics in sports, betting odds, or even live polling, adding new engagement layers for viewers.
Beyond advertising, THEO has been refining its player technology to solve low-latency streaming challenges, particularly for legacy devices. George Choustoulakis, Staff Delivery Engineer at THEO, pointed out that while open source players perform well on the latest hardware, many consumers still use older streaming devices, TV sticks, and set tops that have been in homes for a decade or more.
This is where the THEOplayer shines, as a player engineered to handle legacy challenges and ensure consistent performance across a fragmented device ecosystem.
THEO’s HESP (High Efficiency Streaming Protocol) plays a crucial role in achieving consistent low latency across devices. A demo showcased how four different devices maintained identical latency, highlighting HESP’s ability to ensure synchronized viewing experiences.
The HESP protocol scales efficiently over traditional CDNs, making it highly suitable for sports betting, live gaming, and interactive experiences where milliseconds matter.
One standout demonstration involved a Multiview streaming experience tested at a motorsports event in Belgium. The setup allowed users at the track to switch between multiple live camera angles with minimal latency. A viewer sitting in the audience could seamlessly switch to a different camera to see action happening elsewhere on the track, for example.
A key advantage of using THEO’s commercial player over open source alternatives is future-proofing. Coffey noted that when new streaming technologies—such as LL-HLS or LL-DASH—emerge, open source players often lag in adoption. A commercial player like THEO’s ensures that content providers can immediately integrate the latest protocols without lengthy development cycles.
Integration is also simplified with universal APIs and consistent frameworks, making it easy for developers to transition from one framework to another. The player is designed to work with third-party services such as Conviva for analytics and DRM, giving providers flexibility to build customized workflows.
Dolby sees THEOplayer as the heart of the streaming experience, controlling navigation, video playback, and overall QoE. The merger allows streaming providers to experiment with latency, ad tech, and content interactivity without needing to overhaul their existing infrastructure.
The entire suite—ranging from THEOlive for low-latency streaming to THEOads for monetization—provides a modular set of tools that can be tailored to different use cases.
Rather than simply inserting ads, THEOads is being positioned as a tool for redefining how ads are presented, synchronized, and optimized across devices.
The only other product demonstration we have seen for server-guided ad insertion came from Harmonic at IBC 2024, as one of several new capabilities added to the company’s VOS 360 Media SaaS suite. A more direct competitor to THEO is Bitmovin, which has also made noise about SGAI, as a method for inserting ads without leaving streams wide open to buffering, interruptions, and susceptibility to ad blockers.