How Lukup Is Making TV Ads & Content On DTH Interactive

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3 Nov 2010
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One limitation of DTH as a digital medium is that, unlike IPTV or the Internet, there is no return path and both the content and advertising is largely in a broadcast (one-to-many) format, apart from the TV shows that integrate mobile SMS. Lukup, a company founded by Kallol Borah, is attempting to bring some amount of interactivity to the medium. However, there are challenges, beyond technology – of changing TV channel, media buyer and advertiser mindsets. MediaNama spoke with Borah on how they’re delivering interactive advertising on DTH:
MediaNama: How does your platform for delivery of Interactive Content on TV work?
Kallol Borah: The best possible example of an interactive service is the Active Service from Tata Sky, but you see it on a different channel, which has an Active Mall or Active Games. We are trying to put interactive content on the TV channel as well, so you see it as an interactive overlay on a regular TV channel. If you look at Indian DTH operators – Reliance, Dish TV, Airtel - all of them have a different platform. We have created a system for interactive content that can run on multiple DTH Digital Cable platforms that is connected to the broadcast systems of the DTH operator, which when broadcasted, can result in the display of interactive content as an overlay content on the TV channel.

MediaNama: But how do you make it interactive, because DTH has no return path.
Kallol Borah: It is limited to people using their remotes to view more information, to navigate through menus, with a branded bug on the channel, an L Shaped pullout. You can see interactive content in multiple formats. If a user uses his remote, you click on the remote and the branded bug expands to show the dominos menu on the channel itself, and..

MediaNama: Where does your platform reside – In the set top box or at the head-end, or at the broadcast source?
Kallol Borah: There are three parts. The interactive content is created on our server side system, and it is inserted at the head-end of the DTH operator. The interactive content is on air, so it does not download on the set top box, and there is a part of our platform which essentially is an application that displays the content on the TV channel. Nothing sits on the Set Top Box, everything is in the air, and fed into the operator head-end, because the content would be too heavy to download.

What it means is that (for example) Airtel streams the Dominos ad from the head end for 10-30 minutes. A software downloads on the Set Top Box from the broadcast stream, and it will fetch the content which is on air, and display it on the channel. If it wants to run 3-4 different advertisements on different channels, the same process repeats – our application which downloads it on the runtime will fetch the content and display it at runtime. Because the content is broadcast from localized head-ends, you can location based targeting.

MediaNama: Is this something like the Spot TV model, which Vubites and Amagi are doing?
Kallol Borah: I think the systems that they’re doing is based on the CueTone technology, which has been there for a while. What they’re doing is that they’re buyng spots from TV channels and then they split the inventory on location, and sell to local buyers. Those are typical TV commercial spots, ours is interactive.

MediaNama: Who are your clients? Operators or channels?
Kallol Borah: We partner with DTH operators for the bandwidth, get the approvals and the assistance to broadcast interactive content. We then partner with TV channels to give us some inventory on a revenue share basis, and then we sell to agencies and advertisers. There is a three-way revenue share. We’ve tied up with Airtel, which is 6.8 million homes and we’re looking to scale the reach to around 30 million homes by the end of this year, which is 120-150 million people. In terms of channels, it is available on UTV – Movies, Action and Bindass, and we are working with six more channels from other genres, music, youth, one GEC, one kids channel. We are live on 3, but we have approvals from 8.

MediaNama: Why do you even tie up with the channels? Why not just DTH operators?
Kallol Borah: We need to tie up with the channels because the content on which the interactive overlay runs is on the channel. The DTH operator or the cable operator does not have the right to overlay the TV channel with anything. They don’t have the rights to overlay once the channel pays a carriage fee.

MediaNama: How do you price the inventory?
Kallol Borah: The pricing of the inventory is based on the GRP (Gross Rating Point) of the channel and its effective reach on the operator platform. Then we apply a digital CPM rate on the impressions that we make. We don’t track clicks, because for that we will require a return path.

MediaNama: What do the agencies say? Are they willing to pay more or less?
Kallol Borah: We are dealing with huge interest from the agencies, but there were a couple of things they were concerend about – should it be handled by the digital team or the mainline TV team, because it is on a digital medium and a priced in digital terms. The second thing that was challenging was the pricing. If someone is paying Rs 1000 for channel X, then they ask why should they pay us Rs 1200, or Rs 1150. There was a logic getting in a buy-in on a pricing model, because there has been no pricing model for interactive inventory on TV.

MediaNama: So do you price it according to existing ads or are you asking them to…
Kallol Borah: No we price it independent of the rate on the channel. Our pricing model has nothing to do with the rate of the on the channel.

MediaNama: Do you mean higher or lower?
Kallol Borah: It’s comparing apples to oranges.

MediaNama: Someone who is spending is going to make that comparison…
Kallol Borah: The delivery model is different. A normal TV commercial will run for a 10 second spot. This will run for a 30 second spot, and people will watch the overlay whether it is branded content on the channel or ads that come on the channel. It takes a little time to react to the content by picking up the remote. We provide 30 second spot as a default spot. Secondly, once you start engaging with the interactive content, that engagement is for up to five minutes. The promotion is going to be on air for 5 minutes. The rates are slightly higher than the effective rate of the channel. But if you look at the fact that it is a 30 second spot and is on air for 5 minutes, then it is much cheaper. It is much more competitive and inexpensive, compared to the 30 second commercial.

MediaNama: Why did you go down the route of replacing advertisements, instead of trying to make channel content more interactive, say with stats during a Cricket match?
Kallol Borah: When you say interactive content, we mean both advertising and channel content. For example, if MTV is running a show which is sponsored by a brand. We will enhance the viewing experience with not pure advertising, but branded content.

MediaNama: So do you have any channels on board for that?
Kallol Borah: We have, and we’re creating something I hope will go live from October 1st. So there is definitely interactive channel content planned.
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