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ITV spent £7 million in 2011 improving ITV Player and preparing for its Pay Player.

“Our online strategy is improving from a pretty difficult and poor start point,” Crozier said. “We need to keep investing in technology.”

Release | Slides

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Canoe’s New York office space will be shuttered within the next several months, and 120 employees will be let go, including Kathy Timko, who had served as CEO since last summer. A significantly slimmed-down operation that includes about 30 engineering-focused employees based in Denver will continue on and will be headed by Joel Hassell, who previously served as Canoe’s chief technology officer.

Canoe was formed in 2008 by six cable service providers — Comcast (NSDQ: CMCSA), Cox Communications, Charter Communications (NSDQ: CHTR), Cablevision (NYSE: CVC) Systems and Bright House Networks and Time Warner Cable (NYSE: TWC) — with the intention of using advanced cable set-top boxes to revolutionize TV advertising. The goal was to create technological standards for targeted ads that could be sold across cable systems so that, as one Canoe official said early on, “dog food commercials would only be seen by dog owners.” The standards would include interactive features, so that targeted cable subscribers could, say, ask for more information about a new car they just saw advertised with a click of their remote.

But three years into the project, Canoe could only render a scaled-down version of its plan involving only around 25 million homes — well shy of the 100 million-plus that it was targeting at the outset. And while the initial concept had called for Canoe to sell across different cable operators, Canoe’s competing cable owners, including Time Warner (NYSE: TWX) and Cablevision, wound up grabbing whatever interactive TV opportunities came their way and doing the selling themselves.

Meanwhile, tepid demand among advertisers and the programming partners of the major MSOs for interactive TV products also played a role in the decision to shift Canoe’s focus. A report issued by Deloitte Touche earlier this week put the current market for interactive TV ads in the U.S. at under $200 million — out of a TV ad market that’s collectively sized at around $60 billion. “This is very much in response to what the marketplace wants,” a Canoe spokesperson told us Wednesday.

The Deloitte report, which polled 50 senior media executives, summed it up this way: “The existing system is not broken.”

According to the Canoe spokesperson, the decision to give up on interactive ads was the result of meetings over the last several weeks that included Canoe management and executives from the MSO overlords that founded it four years ago.

“Today, Canoe Ventures is evolving to focus its business on providing a platform for MSOs and national programmers to monetize on-demand content across multiple platforms — both video-on-demand inside the home, and TV Everywhere outside the home,” Hassell said in a statement. “This is in line with Canoe’s founders’ original vision, which is to make cable television households the most attractive platform for advanced advertising. It also aligns with the priorities of Canoe’s direct clients – national programmers.”

While Canoe wasn’t able to get all its constituents on the same page, it did in some ways show proof of concept. Just last week, it released the results of a study it jointly conducted with the American Association of Advertisers, in which a panel of 4,200 cable subscribers revealed increased product acceptance when shown interactive ads from brands like Honda, Fidelity, GlaxoSmithKline and State Farm. According to the year-long study, 19 percent of adults 18-49 said “yes” to interactive offers, while 36 percent expressed a likelihood to purchase.

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The paper cites ITV (LSE: ITV) CEO Adam Crozier’s July 2011 pledge that: “We plan to have a pay mechanism in place around the turn of the year so that we can test what people will pay for (online).”

That doesn’t mean ITV has delayed. Crozier was only putting a January date on the contracting of a payment provider.

An ITV spokesperson tells paidContent: “We can confirm we now have a pay mechanism in place, using MGT’s PayWizard, which will enable us to begin to trial our consumer propositions.

“There is nothing further to announce on those propositions at this time, we will first be conducting closed trials as is standard practice. Our wider pay strategy is also progressing well with deals with subscription platforms LoveFilm and Netflix (NSDQ: NFLX) secured in the last month both contributing to our goal of driving new pay revenue streams.”

ITV began saying in mid-2009, as the economic downturn affected its core income stream of ad sales, that it wanted to find more direct income from consumers, using something like “an Oyster card for the internet”, referring to the London Underground payment access card.

The broadcaster hired Robin Pembrooke as online director, has improved its website and has seen ITV Player video views, together with advertising, grow healthily. Martin Goswami is aboard as director of pay and distribution.

Goswami has inked the recent deals which have placed ITV archive shows on Netflix and Lovefilm and its ITV Player on BSkyB (NYSE: BSY). Those are deals for which subscription TV providers pay ITV, but they do not yet satisfy the other plank of iTV’s pay strategy – the one where it hopes consumers will use micropayments to pay for content or services.

ITV executives have spoken in the past in general terms about possibly charging for online Coronation Street extras and the like. It ITV isn’t yet detailing whether it has specific ideas in the pipeline for the trials.

The launch of the UK IPTV joint venture YouView this year should provide ITV an opportunity to charge to viewers in the living room, not just on their computer. But that prospect is tied up in whether the system will achieve a successful launch at all.

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After months of negotiating, which paidContent reported on in August, BBC iPlayer and ITV (LSE: ITV) Player will be added to the Sky+ box’s Anytime+ service later this year.

But Sky, which had wanted to syndicate the broadcasters’ shows and not their branded services, has softened on its determination to own the customer experience…

Both the BBC and ITV services will be explicitly branded “iPlayer” and “ITV Player”, will live in their own areas with distinct looks and feels, and editorial control for their front pages will rest with the broadcasters. They will look more like their equivalent web products than like Sky’s typical system of blue menus.

Previously, Sky customers had to actively record BBC and ITV shows using their Sky+ PVR. The Sky Anytime, pseudo-VOD service had also pushed a selection of shows to PVR overnight. Now customers will get access to most BBC and ITV shows from the last seven days, and often longer. Sky has also signed a deal for ITV archive shows.

Such services have fast become a baseline necessity for any modern TV service. Virgin Media’s rival pay-TV service had both iPlayer and ITV Player with its TiVo (NSDQ: TIVO) and previous boxes. Smart TVs are shipping with these services already integrated and interim internet TV boxes like Roku are all shooting for similar.

The risk was that customers would start to see greater VOD value in free-TV options like smart TVs than on pay-TV services like Sky.

It was important that, ahead of Tuesday’s Q4 earnings statement, Sky shows investment analysts it has a coherent VOD strategy.

Currently, Anytime+, which lets viewers watch shows by plugging a broadband Ethernet cable in to their PVR tuner box or by buying a WiFi dongle, includes on-demand shows from MTV, Discovery, FX, History, Disney (NYSE: DIS), UK TV and National Geographic Channel, as well as Sky’s own-brand channels.

Channel 4′s 4oD, Channel Five’s Demand Five and S4C’s S4/Clic VOD services are as yet absent from Anytime+.

Meanwhile, Sky is dropping its requirement that Anytime+ viewers must have a Sky broadband connection.

Anytime+ is now used by 1.2 million Sky customers, but Sky wants to hike that to five million.

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The company’s core work is producing TV bulletins for ITV (LSE: ITV), Channel 4, Channel 5 and video footage for others like CNN, NBC (NSDQ: CMCSA) and PBS. But it has been launching its own branded web video channels as well as producing online video series for web-native clients, much of it through YouTube.

That diversification has meant ITN’s ad sales operation has been fragmented across each new syndication platform. So it is now taking on Rightser to manage its content and sell its ads across the whole of the footprint.

The news underscores a trend for more scale in online ad sales around video, and is also perhaps a sign that ITN’s online audience has grown big enough to merit the investment.

The new digital strategy, called One ITN, will see Rightster become the new platform provider for ITN Productions to serve all of its online content across different portals such as Facebook and at least two YouTube (NSDQ: GOOG) channels (ITN News and The 411 entertainment news channel) and its own portal, ITN.co.uk.

These are channels where ITN already gets good traffic: it says that it currently ranks as the biggest news provider in the UK on YouTube in terms of views.

Financial terms of the deal have not been released. But key to the deal is the hope that this will bring in more ad revenue for ITN, which does not have any paywalls around any of its online content at the moment.

A lack of scale in many long-tail content plays is one reason why digital advertising has continued to play second-fiddle to other advertising mediums like TV, which, for all its faults, at least has large, concurrent audience numbers that media buyers for large brands need when justifying ad investments.

We have also seen other industries, like publishing, make moves to tackle this as well: earlier this month, AOL (NYSE: AOL) announced that it would be selling ad inventory for Bonniers’ Parenting.com by putting it together with its own parenting content channels — a move that Bonnier hopes will get more big-name advertisers buying into ad space on its site.

The deal being announced today is an extension of an existing relationship between Rightster and ITN. The two were already partnering together for specific live event coverage that the broadcaster expected would get spikes of traffic: the two worked together to livestream the Royal Wedding to 20 countries via Facebook; Rightster is also providing the backbone for ITN’s streaming of the Leveson inquiry in the UK into media practices and ethics in the wake of the phone-hacking scandal.

Another aspect of the deal is that Rightster runs what it calls a “multi-cloud” system, meaning that if content delivery fails at any one point, the system will switch to taking it from another to keep the streams flowing.

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It is pooling TalkbackThames’ digital team and Screenpop, Fremantle’s innovation and mass participation unit, for a new division that will focus on viewer engagement with TV shows.

Previously, TalkbackThames, which makes X Factor UK, commissioned a Tap To Clap feature from online indie producer Live Talkback to go inside the official mobile for this winter’s recent series of the song contest.

Screenpop company has previously made a video quiz for Sun Online and a viewer quiz for an interactive version of the resurrected TV gameshow Going For Gold.

FremantleMedia’s combined new unit is headed by Screenpop MD Peter Cassidy and will service the company’s other constituent production companies plus the FremantleMedia Enterprises overseas division.

The company says it is targeting “development of interactive formats and entertainment concept with a focus on mobile and second screen applications, direct to consumer transactions, social media and games”.

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YouView, the troubled joint venture backed by the BBC, ITV (LSE: ITV), TalkTalk, Channel 4, Channel 5 and BT (NYSE: BT), received £20.2 ($31.2)m from shareholders in the period from 8 July 2010 to 31 March the following year.

During that time YouView, which has struggled to develop a viable set-top box to take to market ahead of a delayed target date of the London Olympics, has spent £19.74 ($30.5)m.

The first Companies House filing for YouView shows that £14.5 ($22.4)m was notched up as “cost of sales”, which refers to money spent on developing the product as it as yet has no set-top boxes to sell.

A further £5.2 ($8.03)m was spent on “administrative expenses”. YouView spent £1.1 ($1.69)m on staff, which numbered 15 at the time.

The highest-paid director who was chairman Kip Meek, who has since left the venture, received £97,000 ($149832.04) for less than eight months’ work.

Operations officially commenced with the signing of a shareholder agreement on 10 September 2010.

In February last year YouView confirmed that the launch will be delayed until “early 2012″, with the London Olympics set as a hard deadline for hitting the high street.

The company has been beset by development issues with set-top box partner Technicolor pulling out in March last year, the departure of Meek and the axing of nearly all staff involved in PR and marketing.

Lord Sugar replaced Meek as chairman last March at the urging of shareholder Richard Desmond.

TalkTalk is the only venture partner to have revealed any details of a potential launch timeline, announcing in November that it will run a public trial probably from the end of March or early April.

YouView’s partners have committed to each paying an equal share of a £115 ($177.63)m budget covering development, launch and the first four years of its operation. The marketing budget is £48.4 ($74.76)m.

This article originally appeared in MediaGuardian.

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The deals are not for new or recent TV shows, which all UK broadcasters now offer only through their own-branded catch-up services, but for older, archive shows.

• ITV: Lovefilm already had a deal for archive shows produced by ITV Studios, for which ITV was able to license its own rights, like Inspector Morse. The new deal also gives it archive shows once made for ITV by independent producers, like Secret Diary Of A Call Girl and Cold Feet. It is a 12-month deal.
• BBC Worldwide: Content includes older episodes of Doctor Who, Life On Mars and Spooks. BBCWW tells paidContent: “It is a full range of content from classic archive to contemporary series. It will include some content that has gone out on iTunes but not the most recent iTunes releases as per the BBC’s programme release policy. Where we supply content to ad-funded services, those titles may be older than the content that appears on a subscription service.”

The shows are available through the multiple boxes on which Lovefilm is now present.

But none of this is premium fare. The BBC Worldwide content was like that previously licensed to SeeSaw and currently licensed to BlinkBox. Netflix (NSDQ: NFLX) itself is believed to be currently licensing the same set of ITV archive content from ITV. It is largely the equivalent of TV DVDs.

“One of our transformation plans is to distribute content on both free and pay platforms. This is part of the pay strategy,” an ITV spokesperson tells paidContent. But Lovefilm is paying to licence the catalogue to make available to Lovefilm subscribers, viewers will not pay ITV directly.

The Landscape…

For new shows aired in the last seven days, UK broadcasters prefer streaming through their own services – BBC iPlayer, ITV Player, 4oD, Demand Five, S4/Clic and SkyGo, which are now available on multiple devices – to an aggregated offering.

BBC Worldwide, ITV and Channel 4 had intended to form a JV, Project Kangaroo, to exploit post-catch-up archive shows commercially through a single gateway, but it was prohibited by the Competition Commission.

That has left an opportunity for aggregators to come in and scoop up the archive shows. SeeSaw, which used technology already built for Kangaroo, has failed and closed. Now Netflix and Lovefilm are signing up old shows in acts of brinkmanship. Netflix executives will meet UK industry members next week.

But, while broadcasters prefer to go it alone on their best content, neither is yet ready to offer the new shows that most viewers want to watch, and so the dream of a single aggregator goes on…

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