Strengths:                   

New Rembrandt promotes a massive use of Virtual Advertising thanks to a unique technological solution, which, together with a new business model, offer a new vision of the opportunities offered by virtual advertising: “the value of Virtual Advertising is not in being able to send different advertising content to different TV audiences – as stakeholders currently believe: it is in being able to deliver different advertising content to different user profiles.”

Weaknesses

For the first 20 years, the main obstacle was the lack of computing power of machines that were affordable and small enough to use on the field.

More recently, the biggest obstacle has been the complexity of the camera calibration process, that is calculating the deformation of images caused by imperfections in the camera lens. The virtual content rendering system must modify (i.e. distort) the virtual content with the exact same parameters with which the camera distorts the image of real objects on the field.    Another complex problem is the fact that people (players, referees) and various objects may be standing between the camera and the advertising billboards. These areas of billboards occlusion must be identified in real time and with the greatest precision so that the virtual billboard does not appear to be placed over people who are in fact in front of the real billboard. According to scientists and academics, computers’ ability to recognize these outlines automatically is still several years away.        

Opportunities

Using New Rembrandt, all the events that are currently filmed and broadcast or streamed can see their revenue increase thanks to the higher value of advertising when it is personalized based on the user’s profile. This revenue is multiplied because it is not based on additional audiences but on personalized advertising. Considering that user-targeted advertising is worth about 3 times untargeted advertising it will be possible to multiply the current revenues from pitchside advertising (14bn$) by the same amount.

The Virtual Advertising addresses a niche market in terms of the number of direct users, but the involves stakeholders can address hundreds of millions of users and viewers interested in sports events. Infront estimates that it is a potential billion- worth market. Both satellite TV and IP TV subscribers are still continuously increasing. Particularly IP TVs subscribers are expected to record a CAGR of 10%, big companies are moving towards the streaming market.

By winning the time-to-market race, Duel would reach a technological leading position in Europe, over the sports sponsorship billposting industry, which is worth 30% of the huge whole sports sponsorship market. The news confirms the interest of leading web actors in sporting events, considered as a source of strong revenues from user subscription or from advertising.

Clearly, Facebook, Twitter, and Amazon (which will soon be followed by others) have understood the advertising value of sports events, which can maintain users’ attention for tens of minutes, if not hours. The fact that the user maintains their attention makes it possible to formulate and propose a sequence of messages. Web operators will, therefore, be attracted by a system that can deliver messages that are personalized for each user in sequence. The 330bn$ forecast market for 2020 will be made of so many messages that competition for users’ attention will be intense, with the added complication of ad blocker technology. Just look at what happens in France today:
                   

“Amazon’s site in France could be losing up to $5.5 million annually to ad blocking, according to estimates from Paris-based ad blocking analytics tool provider AdBack. Amazon is at the top of a varied list of sites in that country feeling the effects of internet users’ efforts to declutter their online experiences”
(source : emarketer March)

In this context, Rembrandt can offer a large amount of space using non-invasive messages that are naturally inserted in the images of the event presented to each user.

Threats

The value of virtual advertising today is not perceived according to its potential and that of Internet tools. This value is calculated by multiplying the advertising for different television audiences.

This limited view of its value reduces the interest of stakeholders because:

  • in major international events, the purchase of advertising space is de facto limited to a small number of major sponsors. Since these sponsors advertise products sold worldwide, they are not particularly interested in diversifying advertising messages;
  • for other events that only attract a limited international audience (typically national club events, or international matches when broadcast in third countries), LED panels are seen as being already sufficiently flexible, as they can alternate advertising messages for the various TV audiences;                 
  • producing and selling different advertising in different countries also requires brokers to have a sales presence in more than one country or to share the revenue with local brokers.

This erroneous and limited perception of the potential value of V.A. reinforces the natural resistance to change, in particular by brokers, who are worried that the new technologies that underpin V.A. can challenge dominant positions that have been built over the years.

What is missing is an understanding of what virtual advertising can offer in a context in which web streaming is becoming the dominant mode of delivery of video content, including entertainment and, more specifically, sports.