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September 06, 2012

Profile of local TV ads firm Amagi

From Businessworld
Amagi’s key message was to explain the benefits of local advertising to television channels and cable and DTH operators. In June 2008, the trio purchased a set-top box from the US for $5,000 only to realise that it used an archaic analog technology that used cables and was server-based. But they decided to make it work on chipsets and consumer digital signal processing. So, they decided to create something that would not only be easy to install but would also be easy for the DTH and cable operators to adapt their set-top boxes to. Once the technology was sorted, they had to sell the idea.

The business model was simple: buy inventory from television channels and sell that to local advertisers. Amagi initially started with retail, jewellery and real estate, and currently works with regional FMCG brands and SMEs who need regional (state-wide) advertising. There are 160 million television sets in India and 600 million viewers, with cable and DTH covering close to 120 million homes. “Geographic targeting in advertising is the future; and not language changed ads,” says Srividhya. Their IP is in the software that goes in the advertisement insertion devices of the cable operator and the software on DTH set-top boxes. They have started licensing their technology to international television networks as well. For television channels, say Amagi’s founders, it would be better to target an audience with regional advertising. They have taken their technology to Asia-Pacific, Europe and Latin America. In India, the company has sold more than 8 million ad seconds, has sales offices in 22 cities, and has tied up with 12 television channels including UTV-Disney, TV-18 and Times TV networks.

...Infosys co-founder N.S. Raghavan is the sole investor and has pumped in around Rs 37 crore, which is being used for increasing sales and channels tie-ups. They have already filed four patents for their technology, and have 1,000-plus advertisers on board.

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