(Updated with Web site URL)

blackarrow.gifSan Mateo start-up BlackArrow has raised $14.75 million to develop a way to insert advertisements in TV and Internet video programming, and it shows the ads even if people try to skip over ads with their DVRs.

It has been secret until now. But this is pretty serious cash for an unknown company. It is, after all, a pretty serious proposition.

killtivo.jpgHere’s how it works: Take ABC, a network that sells 30-second advertising spots. Roughly a quarter of US households have digital video recorders, and that percentage is growing — and they’re skipping the 30-second spots in greater numbers. Advertisers are now saying that’s uncool, and so ABC says, “Aha, but we can offer enhanced ads — those that are played during the pause, ffwd modes” in video-on-demand and DVR households. So after the original show airs on TV, ABC syndicates the show to their own video web site, potentially other websites. The 30-second TV spots are removed and replaced with a group of pre-roll, mid-roll, post-roll ads, as well as companion ads (those that occupy real-estate around the video window) that are shown in the various playback modes. BlackArrow handles the brokerage and placing process by providing these new forms of ad inventory.

The funding comes from Intel Capital (yes, there is a trend here lately), Mayfield and Polaris Venture Partners, as well as Comcast.

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