If there's one thing smaller cable operators like, it's the new revenues from advanced services such as video-on-demand (VOD) and applications like local ad insertion.

    Vendors such asC-COR Corp. (Nasdaq: CCBL - message board) and the Comcast Media Center (CMC) have created special pre-integrated systems to address adding VOD to small MSOs. And now AdGorilla TV has stepped in with a system that gives small- and mid-sized operators an opportunity to get a piece of the local ad pie without breaking the bank.

    For small operators looking to get into that game, "the biggest barrier has been cost," says AdGorilla CEO and Founder Dan Ryan. "When you get down to about 5,000 subscribers, spending $60,000 or more for ad insertion gear just doesn't make any sense."

    Ryan, an 18-year cable vet, knows a thing or two about the special economic challenges faced by smaller operators. Most recently he founded Precis Communications, a provider of cable services to small communities in Utah, Arizona, and Nevada. He also served in the Rocky Mountain Group of Charter Communications Inc. (Nasdaq: CHTR - message board), handling a region with 260,000 customers in 12 states. He ended up with Charter in 1999 after the MSO purchased Rifkin & Associates, a mid-sized operator.

    AdGorilla, which is hawking its "RevGen" wares this week at The Independent Show in Monterey, Calif., entered the analog ad insertion market in March, starting with a four-channel, entry level system that runs about $5,500. The modular design allows operators to expand to as many as 12 channels per box.

    AdGorilla has set up two models depending on how much an operator can handle on its own. An operator can buy the equipment and sell the ads, or have AdGorilla's AdPro division handle the ad sales, download the spots, and schedule them into the local avails. Of the 100 or so RevGen systems installed so far, roughly half are full turn-key customers, Ryan says.