Princeton Video Image expanding its world of virtual advertising
The company has provided video insertion services for nearly 1,000 live telecasts worldwide, including broadcasts of Major League Baseball, National League Football, professional soccer and motorsports, as well as other live events.
PVI president Dennis Wilkinson who took over the helm at the company last year, previously worked for the PrimeStar DTH satellite broadcast service and is also a 20-year veteran of HBO. The Wall Street Transcipts (TWST) recently sat down with Wilkinson to discuss virtual advertising and its place in future media.
TWST: Would you provide an overview of Princeton Video Image, including history, development, markets, and your own view of the firm's future potential?
Mr. Wilkinson: Princeton Video Image is the leading company in the field of virtual advertising and imaging. We have pioneered the idea of advertising in this space, virtually either in a live sporting event or in a prerecorded entertainment show. We started our business and developed technology that was based on the idea that during live sporting events there are moments during which, if you break for a commercial, you miss an important and integral part of the event, or the game, or the action. The PVI virtual advertising idea was conceived based on feeling that if we could place advertisements on the broadcast only, then it would seem to minimize the need to cut away from these events and miss the action. However, it took a while to develop. But it is beginning to take hold. We now use virtual advertising in football, in baseball, auto racing, soccer, tennis and basketball.
The concept of putting virtual insertions into pre-recorded shows is one that has evolved from our base technology in that we've found a way in which we can actually insert products and images into pre-recorded entertainment shows, and do it in such a way that it looks as if those inserts were there when the show was originally taped. Most importantly, you can take them in and out as the life cycle of the particular show changes.
We've taken our technology into the next level, which is into the interactive TV and the interactive streaming media business. We think this is ultimately the future of advertising. We can actually take our technology and localize it at the PC or the set-top box, and actually target advertisements to that particular home. Our technology offers interactivity. All of this is built around one simple concept, and that simple concept is this: we provide in-programming advertising.
TWST: Where do you plan on taking Princeton Video over the next two or three years?
Mr. Wilkinson: I think the biggest challenge for us over the next two or three years is to continue to push forward and generate uses of Princeton Video technology across all broadcast networks, cable networks, and into the prerecorded entertainment shows. That's the key. At the same time, we feel that we'll make great progress with streaming media on the Internet. This new medium is beginning to take hold and become a relevant and important part of the Internet content delivery. We think that our products in the Internet side will take off, and we are to preparing PVI for the ultimate advertising, which is interactive broadcast advertising applications.
We have established as of May, our technology on the RealNetworks, RealPlayer 8 player, that's being introduced in the fourth-quarter of 2000. We have a strategic alliance with Engage, which is a CMGI company, for the use of their ad server and their ad-sales programming, and their profiling technology which will allow us to do video-streaming in broadband media telecasts on the Internet. This also will allow us to target individual PCs with very specific 'targeted' messages in the streaming media program. And then, at the same time, we're developing our technology to be ported on to interactive broadcast platforms so as to be ready when interactive broadcast is in full operation.
TWST: With regard to the television programming, would the product placement also take the form of a computerized image within the prerecorded TV entertainment?
Mr. Wilkinson: It can. There are a number of different things that we can do. One of the examples that we use is that we're asked by a producer of an hour-long drama that was built around a military set-up, and they asked us to insert two military tanks. They wanted four tanks and they could only afford to put two in, live. They asked us to replicate the other two, so they'd have four tanks. We did that and it looked great. So we can put images in, we can put product placements in, whatever the client feels it needs. We have another business, which I haven't talked about, which is the programming-enhancement business which that would fall under. We do the virtual first-down line for CBS telecasts of the NFL games, regular season and post season. We also have enhancements for baseball and enhancements for horse racing. We have a virtual strike zone for baseball, and we do it with the San Diego Padres.
TWST: Do you have any significant competition in your sector of the market?
Mr. Wilkinson: There's competition, yes. And they are significant. You have to take a look at our focus versus the competitors' focus. We are focused on virtual advertising. We've built our company with the belief that, as I mentioned earlier, in-programming advertising will be much, much, more impactful for the advertiser, and, importantly, it won't interrupt, as advertising in breaks does, the game/event itself. So we're focused, clearly focused. We have a number of different competitors in the different programming areas that we're involved in. None are as direct as we are. For example, we have a competitor called SportVision. SportVision is a New York-based company that introduced the first downline with ESPN about six weeks before we introduced ours with CBS in 1998. They've proclaimed their business focus is in the area of
programming and sports enhancement. So they are a competitor because we bump up with them on occasion when we're bidding for a virtual first downline, or we're bidding for other program enhancements. There's a company called Orad Hi-Tec Systems, which is an Israel-based company that we compete with on certain levels, but they're not focused on the advertising side as we are.
TWST: Do you see virtual advertising on the streaming media, as it were, to be a big opportunity for your company in the next couple of years?
Mr. Wilkinson: Yes, it is. We think that that area of the Internet will grow, and grow, and grow, and we're seeing a great deal of activity as we speak now. I think that that business will grow, and because the Internet is an interactive media, and they are not used to stopping programming for commercial breaks, and the traditional 30-second commercial is not a tool that's being used by the advertisers within the Internet, we believe that it's natural for a virtual product and image placement as advertisements within the context of shows that are distributed in streaming media.
TWST: What are the challenges or risks involved in virtual advertising?
Mr. Wilkinson: There are challenges, there's no question about it. In the beginning, the risks that were felt by the broadcast community were coming primarily from the production side of the business. They were concerned with the possibility that any time you interrupt a live broadcast, there could be problems. What we have done is we have created our technology based on the broadcast standards of the top-four broadcasters in the United States, and we have proven without a doubt, and we have worked with all of them now, that our technology will never interrupt the live program: they are fail-safe maneuvers that the director can do, and he is in charge, both of our technology and his broadcast.
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