Microsoft Brings Web Video and Ads to Home TVs

Microsoft is adding an ad-supported Internet TV service to its Windows Media Center platform for home-based media viewing and management. The beta feature will initially bring approximately 100 hours of full-screen and on-demand MSN Video content to Media Center users’ monitors and televisions, and will be available on both PC and Xbox systems. Content on the standard definition and high definition Web video service will include full-length TV shows, news and sports clips, live performances and movie trailers.

Microsoft will not leverage its own Digital Advertising Solutions unit to monetize the new service, nor will it traffic any of the ads through adCenter or recently acquired Atlas. Rather, in a pilot relationship slated to last at least six months, the company tapped video ad network YuMe to sell and serve pre-roll and other in-stream ad placements. The duration of the YuMe deal will depend on the results of the pilot.

The first advertiser to make a buy on the Media Center Web video service is Infinity, which will run a broadcast spot. The deal was brokered through OMD.

YuMe has struck similar deals with several other client-side video services, including BitTorrent, Vuze and Pando. While Microsoft didn’t immediately respond to a request for comment, YuMe CEO Jayant Kadambi suggested the firm won the business because of that experience and because of Microsoft’s own sense of urgency about bringing the Internet TV offering to market.

“Microsoft is trying to add to its portfolio of ad and content formats it supports… on a rapid basis,” said Kadambi. “The partnership helps them move quickly into this area. We have experience going to agencies and advertisers for high quality ads in both SD and HD formats.”

Ad formats will initially consist entirely of :15 and :30 pre-roll spots. Two months into the beta the companies will introduce more interactive formats that “allow people to click and engage… with the advertisers a little more,” said Kadambi. He added advertisers will be able to use YuMe’s ad templates to design response mechanisms compatible with the Windows Media Center remote control in a manner similar to a DVD menu.

Reporting options for Media Center campaigns will include the number of views on both PCs and Xbox consoles, along with additional interaction metrics such as whether an ad was watched in its entirety.

The announcement comes a day after Microsoft introduced a new version of the MSN Video player that serves ads according to the length of time a person has been watching video, rather than the number of videos viewed. Microsoft said the strategy would let people “channel surf” without being constantly interrupted by ads, and would provide a more predictable user experience.

Kadambi said YuMe will be able to offer a parallel ad approach within the Media Center Internet TV service. “They get the same experience on the Web side as they would watching the video through a TV extender like an Xbox,” he said.

Microsoft is expected to present Internet TV for Windows Media Center at the Digital Life conference today, and to deliver it to users tomorrow as part of an automatic update. As a result, said Kadambi, “The embedded base of clients and people who will be able to see this is automatically really high.”

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