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18 February 2021

Technicolor, Hoppr tip targeted ads as best shot at fighting churn

The consumer exodus from pay TV is becoming a tale of near-biblical notoriety, but there are always new stories to be found in how operators are battling with their fate. Vendors are perfectly placed to reframe their offerings as silver bullets for declining revenues and subscriber churn, and a new partnership between Technicolor and Australian start-up Hoppr argues that advertising is the key.

About a month ago, Technicolor and Hoppr released a Q&A where two senior execs discussed how operators were increasingly interested in incorporating programmatic advertising capabilities into their business models. They argued that broadcasters have held ad dollars for too long, and that operators have an opportunity to capitalize upon emerging network and CPE technologies to get a place in the ad industry.

This week, we caught up with Technicolor’s SVP of Connected Home, Christian Lefebvre, and Hoppr’s CEO, Cyril Daoud, to lift the lid on exactly how these two vendors are working together to give operators a stake in advertising. In short, Technicolor is hosting Hoppr’s advertising overlay technology on its huge footprint of set tops.

You likely are familiar with Technicolor, but Hoppr was a new one for us. The Australian start-up aims to bridge the gap between digital advertising and network service providers, by giving operators a chance to monetize their IP networks and wide-reaching audiences. Daoud argued that operators’ broadband networks “have been qualified as a dumb pipe for too long” – with the rise of OTT only cementing this view.

Hoppr offers a digital ad agent, Hoppr TV, that does not require any integration with the UI or device vendor – essentially, an app running on overlay. The platform runs on an operator’s pre-existing IP network, which Daoud described as “taking advantage of the ubiquity of triple play services in Europe.”

On dynamic ad insertion technology, Daoud commented that Hoppr TV does not do on-device stitching, and instead just overlays the ads. “It’s the same technique used for social media or mobile advertising, where the apps take advantage of the local ISP network,” he continued. “We are building billboards in the set top and asking agencies to display on it.”

On the backend, Hoppr TV offers audience segmentation, analytics, and ad sales. Audiences are segmented by AI processing user navigation data – how long they spend on a synopsis, or, which titles they watch, for example. Daoud noted that this data is collected with the consent of the user, with a range of non-targeted ads pushed if they choose to opt out.

Daoud argued that what set Hoppr apart was its audience-focused approach. “Most advertising slots are sold based on segmentation, but this is according to the content. We are selling audiences regardless of what they are watching at the time. It means we can push ads pre-roll, not mid,” he explained.

As well as conventional pre/mid/post-roll video ads, Hoppr TV can offer any of the HTML programmatic ad formats that users are more used to seeing on display and mobile, including banner ads and interactive ads.

For ad sales, Hoppr operates its own programmatic ad servers, but also works with a range of supply and demand side platforms, as well as dealing directly with some large media agencies and brands. “We prioritize direct, but have programmatic to fill the remaining sales,” Daoud explained.

It seems that in this partnership, Hoppr is bringing most of the technological innovation, while Technicolor is providing the wide-reaching platform for it to succeed. But Lefebvre assured us that Technicolor is busy preparing its next generation of CPE for the arrival of 8K, with improved CPU power, memory, and security features.

He explained that Technicolor is looking to evolve the set top to keep it as an essential feature of the home. “We are looking to move the set top away from the traditional device for video, to a smart hub where the video is just one use case among others; enriching the bouquet of services that will help operators fights churn,” he explained.

These use cases include IoT, targeted advertising, and even cloud gaming, that latter of which Lefebvre said would be arriving very soon as a result of a partnership with Google.

Furthermore, Lefebvre stressed the importance of ensuring that these new services incurred a low capex for operators. Operators’ networks are already under financial strain from the roll out of 5G, and most of Technicolor’s customers are very hesitant to incur further costs when providing end users new experiences.

Nonetheless, Lefebvre feels that Technicolor’s current range of set tops are still ahead of the competition when it came to operators onboarding valuable offerings such as Hoppr TV. “Hoppr can work on Linux or other set top OSs, but it is much more complex,” he argued. “Android TV has a much more segmented middleware to support APIs and new services, while Linux is a very proprietary system.”

“The video landscape needs to have scalable software and a common platform from which we can focus on generating value,” he continued.

Hoppr TV is set to make its first splash with some European operators on Technicolor set tops, but neither Lefebvre nor Daoud were able to give us any names. An announcement is expected in March.

While Hoppr is offering operators a great value proposition for crumbling pay TV businesses, the same technology could easily be used to fuel the competition. The partnership with Technicolor is not exclusive, and Daoud confirmed that Hoppr offers a multiscreen service that can integrate directly into OTT apps or any Android TV-based smart TV.

This means Hoppr TV could be used to serve pay TV operators’ prime competitors in advertising – namely CTV OEMs and OTT platforms. Perhaps aware the suggestion was souring the mood, Daoud assured us that “most people in Europe and North America still watch through a set top. We are aware of cord cutters, but Hoppr is about building inventory and pay TV still presents us the largest market.”

“We can give operators a brand new stream of revenues, while taking advantage of the millions of eyeballs they serve. Going direct to a TV is a more complicated environment,” he continued.