Cameo Lands Universal Pictures Deal

Universal Pictures is tapping Irving, Calif.-based Cameo, for an experimental way to market to consumers: showing TV commercials on their PCs.

At first glance, the concept isn’t new: many rich media ad firms like Bluestreak, eyeWonder and many others already offer conversion services to encode a television spot into streaming video, which can appear in an ad on a Web site. Still more firms specialize in adding streaming video ads to email.

But Cameo — which is a subsidiary of hard drive marker Western Digital Corp. — takes a different approach, which it says acknowledges the fact that few users have broadband Internet connections. Through its system, video files are downloaded in the background while a user is connected to the Internet. That way, when they’re played back from a user’s desktop PC, the video is shown at high quality, without the slowdowns or compression typical for streaming media.

Cameo achieves this through a downloaded application, CameoCast, which plays TV commercials when a user starts up their PC, as a screen saver, or whenever a user just wants to watch video.

The company says its player can display video at 30 frames per second and 540 by 360 pixels, with data rates of over 1 megabit per second — about 20 times greater than streaming via most dial-up connections.

Through Wednesday’s announcement with Universal Pictures, a division of Vivendi Universal, the film studio becomes Cameo’s first customer, and a participant in the company’s beta effort. Through the beta-phase agreement with Universal, Cameo agrees to show trailers and stills from upcoming movie, DVD and VHS releases, pay-per-view events, and other promotional materials.

“Cameo technologies and applications represent a unique and powerful way for Universal Pictures to engage our audiences directly on their PCs,” said Universal’s vice president of new media marketing, Kevin Campbell. “Through Cameo, Universal’s promotional content can be delivered and played on PCs at the highest video quality possible, rather than sacrificing a full entertainment experience for viewers through a small streaming Web window.”

The full product — and a full commercial partnership with Universal — are slated to come next month, Cameo said. The company did not disclose terms of either the beta test or full-fledged advertising deal with the studio.

Cameo said it envisions its advertising clients eventually being able to target individual users through standard demographic data, and via users’ specified interests. Interaction with the videos — which can be clicked on, rated or forwarded to friends — is collected in the aggregate, analyzed and delivered to the client. The pluses of increased customer data and communication, Cameo says, outweigh the fees that marketers would pay the firm to host their video.

“Cameo’s customers — content owners and marketers — are looking for new ways to engage audiences and create awareness for their brand and content,” said Cameo president Matt Milne. “The CameoCAST product achieves this through a model similar to broadcast TV — free to users, supported by content owners.”

Cameo isn’t alone in the space, however. Earlier this year, consumer packaged goods giant Unilever signed an advertising deal with Fort Lee, N.J.-based Amicada, which functions similarly to Cameo — commercials are downloaded in the background and stored locally, on a user’s hard drive The startup distributes its player via deals with Internet service providers, which offer the software to customers in return for a piece of the ad revenue.

Amicada hopes to encourage users to view the commercials by offering users incentives like redemption points or discounts on their ISP bill — which Cameo does not.

But while Amicada has partnerships with ISPs (such as Blink.com) as a distribution channel, Cameo is hoping to gain users through its parent, Western Digital. Through extising communications and software update channels, Western has delivered the software to 300,000 of its customers, and has the option of pre-installing the application on its drives in the future.

At any rate, questions linger about whether consumers will buy into a proposition that compensates consumers for looking at ads — earlier startups like AllAdvantage and mValue fizzled out after incentivizing users to receive banner ads. And that’s to say nothing of a venture like Cameo, which doesn’t offer an explicit incentive at all.

But according to the company, the failure of banner ad-centric plays like AllAdvantage shouldn’t happen with video, since the medium is more compelling than banners — and users actually actively seek it out. Indeed, among those who do seek out and view videos online, movie trailers are the most popular form of content, according to a recent Arbitron survey of streaming video consumers. But Cameo believes that streaming isn’t good enough, and says there’s a large, underserved audience of people who would be willing to use its product to better view movie trailers.

“We know from consumer research that PC users who seek video entertainment on the Web would prefer to have it delivered directly to their PCs at a quality level that only Cameo can deliver,” Milne said. “For example, we believe that many of the millions of monthly visitors who view movie trailers streamed from Universal’s Web sites will choose to have these trailers automatically delivered to their PCs and played in broadcast quality.”

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