Packet Vision ran into a problem with its targeted ad insertion project with the Inuk PC-based Internet IPTV service that serves about 150 thousand college and university students in the UK due to the use of MPEG-4 compression.
MPEG-4 has a latency of one or two seconds between I-frames that contain an entire screen. Between the I-frames only the incremental changes are transmitted. The ad insertions start with the I-frame but the ad being over written may have already run up to two seconds before the inserted ad starts. This creates a rather jarring experience where the viewer sees the ad to be over written for a bit before seeing the new ad.
This was not as significant a problem with MPEG-2 because the latency between I-frames is about 1/2 second, which does not create as bothersome an overlap with the over written ad.
Packet Vision worked with Tandberg TV, the company providing the encoders to Inuk, to carefully encode the broadcast streams from Channel 4 in the UK and to mark the insertion points. Tandberg TV made sure that ads started with an I frame so that a clean splice is made. This has provided a much better viewing experience.
This looks like a problem that is inherent in MPEG-4 that all encoder and ad insertion systems will need to solve. Packet Vision and Tandberg TV have done pioneering work to get targeted advertising to work in Telco IPTV services.
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