General

ViaClix and the Monetization of Television

Based in California, this company has focused on some projects in the Middle East, until now.

by Gerry Blackwell [July 18, 2008]

Everybody, it seems, wants to share their advertising revenue with ISPs. If half the advertising opportunities came to anything, the ISP industry would be transformed.

Here comes another—from Los Gatos, Calif.-based ViaClix Inc., a four-year-old company that has flown under the radar until recently. ViaClix owns patents on technology for integrating TV and internet to "blend" web-style interactive advertising with broadcast TV.

ViaClix president and chief operating officer Jay Elliot offers this startling example. You're watching a cooking show on television and admire the frying pan the host is using. No problem. Just click on the image of the pan in the live video—it's also a web link—to go to a page where you can buy it online while you continue watching.

You can see why content providers might get excited about this. It's the logical next step for lucrative paid product placements.

"We can integrate with any TV system—cable or satellite pay TV, IPTV, or broadcast," Elliot says. "We don't care what technology the carrier is using."

Content providers, ad agencies and cable and satellite pay TV providers are among target segments the company is going after, and it claims to be talking to major players in all of them. Another is ISPs—those already operating IPTV services and those that want to.

The value proposition for ISPs? You know the answer: you'll share ad revenue with content providers and, presumably, ViaClix. "For ISPs, it's an opportunity to create some additional revenue streams," Elliot says. "It's a great marriage for them."

The team
Elliot, who came aboard at ViaClix recently, has an impressive track record in the high-tech industry, with stints at Intel, IBM and Apple, where he was an executive vice president. He's also founder and chairman of Migo Software, a PC utilities software developer.

ViaClix founder and CEO Lida Nobakht has an impressive CV as well. An MIT-trained engineer, she's credited with inventing some of the core technology used today in computer disc drives.

The company is already working with clients in the Middle East. In fact, its only outside funding to date comes from three customers in Dubai and Kuwait. Two are quite large, Elliot says. He describes one as a system integrator and soon-to-be IPTV service provider. He can't or won't name any of them.

"There's a real opportunity now for us to get into the U.S. market," Elliot says. "We're negotiating a couple of opportunities. It's going to happen pretty soon, I think, over the next month or so." One of those is a small ISP with an existing Web-based video-on-demand service.

The program
So what exactly does ViaClix bring to the table?

There are two parts to what the company does. First, there's set top box (STB) technology that delivers internet access to TVs and—the novel part—lets users create personalized channel guides blending TV and web content. The blended channel guide is patented technology.

The user in effect creates a personal home page with links to favorite web pages, TV channels, and any other available digital media content. The guide could be categorized—business, education, travel, health, news, video games. Under each, there would be links to content from various sources and in various formats.

ViaClix already has STB products with this technology built into them. The technology is mostly software but there is a chip-level component, which could be integrated into other pay TV STBs. Or ViaClix could license technology from pay TV providers and build its own products for sale at retail as retrofit units.

The other key piece of intellectual property, crucial to the business model and value proposition ViaClix is proposing to ISPs: server-based technology for blending web-based messaging, including interactive advertising, with live video. The ViaClix server will sit at the pay TV operator's head end.

"I believe the biggest value is in that full head-end system that integrates the worlds of TV and messaging," Elliot says.

At least one of the Mideast customers will be using the ViaClix server product in its IPTV service. Part of what the server does is track click-throughs and report demographic information to advertisers.

Page two: The ISP opportunity >