Sweetened Ericsson bid locks in Tandberg;
what's ARRIS' next move?
Well, now what?
Just when it seemed ARRIS had clear sailing ahead toward its acquisition of Tandberg Television, Ericsson stepped in the way with a surprise (and sweetened) hostile bid.
After lauding the original ARRIS-Tandberg combo due to its complementary technologies and competitive positioning against larger foes (i.e. Cisco Systems and Motorola), analysts now believe that ARRIS is out of the running for Tandberg, which markets advanced encoding gear as well as the OpenStream VOD backoffice platform.
Now, observers and handicappers alike want to know what ARRIS will do next. Some believe it will take the money it will get from the breakup fee (about $18 million) and apply that toward a hunt for smaller game. Such pursuits could include the likes of Harmonic Inc., Terayon Communication Systems, C-COR Inc., or perhaps Concurrent Computer Corp.
Beyond that, the companies under the ARRIS umbrella could "even more likely become a takeover candidate themselves," said Alan Bezoza, SVP of equity research at Oppenheimer & Co., in a research note.
Brian Coyne, an analyst with Friedman Billings Ramsey, who called Ericsson's offer for Tandberg "airtight," said ARRIS remains positioned to go it alone for a number of years, even without a video play.
"While missing out on [Tandberg] is disappointing for ARRIS longer term, we believe the strong outlook for ARRIS' stand-alone business remains entirely unchanged over the next 12-24 months," Coyne said, in a research note. Without a video component, ARRIS, he added, "may now be more likely to sell to a big OEM in three or five years' time at a premium given its strong market position."
Coyne also believes it is unlikely that ARRIS will do "an about-face" and announce another acquisition, citing the high valuations of Harmonic and other potential targets.
And what of Ericsson, the company that surprised everyone? It's all about positioning itself for IPTV, analysts say.
"If the deal goes through, it would certainly help Ericsson transform itself into a major end-to-end wireline and wireless video network infrastructure player," according to Jeff Heynen, Infonetics Research Inc.'s directing analyst for broadband & IPTV. He notes that Tandberg "would nicely bookend" Ericsson's acquisitions of Marconi, Redback Networks and Entrisphere.
— Jeff Baumgartner, xOD Capsule Editor, and CED Editor-in-Chief
Widevine swings Cablevision 'watermarking' deal
Widevine Technologies, according to company CEO Brian Baker, has sealed a deal to provide its digital watermarking technology to Cablevision Systems Corp.
The addition of the technology, which allows operators and studios to trace the path of content from the source and track down pirates, could open the door for better (i.e. earlier) video-on-demand (VOD) windows as content owners require such layers of protection in their carriage contracts, Baker predicted.
Cablevision, he noted, is the first cable operator to agree to use Widevine's watermarking system. VOD content aggregation company TVN Entertainment signed on to leverage the vendor's "Mensor" platform back in 2005.
Mensor uses a digital watermarking technique that embeds specific information onto a digital file. That information can be traced because it is designed to survive recompression and redistribution - common practices in digital piracy. The watermark, invisible to pirates, can indicate where content was last sent, received and viewed.
SeaChange: 'Channel Overlay' app enters the trial phase
SeaChange International officials say they are starting to make some trial headway for a "Channel Overlay" application that helps viewers sift through an increasing universe of on-demand and broadcast content.
SeaChange's app came to light last week when the company announced that it had secured a patent (U.S. No. 7,155,674) that is key to the Channel Overlay system.
A number of U.S. cable sites are testing Channel Overlay today, according to Stephen Kraiman, VP of technology for SeaChange Interactive. Kraiman and George Breen, president of SeaChange Interactive, are credited as co-inventors of the Channel Overlay system.
|Examples of 'Channel Overlay' in action. The shot above shows the app's ability to 'hot-tune' to other linear networks that could be of interest to the viewer. Below: The system automatically accesses titles in the VOD menu that are associated with the program being viewed.|
SeaChange is not saying which U.S. operators are testing Channel Overlay today, but the ones in question are leveraging VODlink, a platform from SeaChange that serves as a complementary element of the resident interactive program guide. For example, SeaChange's DVD on Demand system, which teams DVD extras such as producer commentaries with the traditional VOD title, is baked into the VODlink system. Several cable operators use VODlink today, including Comcast Corp., Cox Communications, Insight Communications, Time Warner Cable and RCN Corp., among several others.
SeaChange has also outfitted Channel Overlay to work with its TV Navigator middleware, which it obtained in 2005 via the $25.5 million acquisition of Liberate Technologies' international assets.
But Channel Overlay is not limited to VODlink or TV Navigator. It could also be equipped to run on other middleware systems. SeaChange doesn't have any specific plans of porting Channel Overlay to the OpenCable Application Platform (OCAP), but "it's certainly a natural," Kraiman said.
As for the app itself, Channel Overlay aims to address a big problem operators must address as VOD content libraries continue to swell.
"Finding what you want is getting progressively harder," Kraiman says of the consumer experience with VOD and a widening range of linear channels.
Channel Overlay, he said, helps viewers zero in on what they might like based on their viewing habits. If a customer likes to watch a particular linear channel, for example, it follows that he or she would also be interested in the VOD fare offered by that particular programmer.
In addition to directing viewers to VOD content, the overlay can also "hot-tune" to other linear channels related to a particular programmer. A Discovery Channel overlay, for example, could provide buttons that tune directly to other networks in the Discovery stable, such as TLC or Animal Planet.
S. Korean VOD equipped for Hollywood's best fare
A recent integration between video-on-demand (VOD) vendor Concurrent Computer Corp. and security specialist NDS Group could pave the way toward new Hollywood films for cable operators in South Korea.
Concurrent and NDS said they have completed the first session-based encryption implementation for that market - with DreamCity Media, a cable operator that provides services to about 95,000 digital subs in Seoul.
The integration teams Concurrent's MediaHawk 4000 VOD platform with NDS's conditional access system.
That combination is important, said Concurrent VP of International Sales Del Kunert, because Korean MSOs previously have been streaming on-demand content "in the clear," so studios have been reluctant to offer them newer titles without that added layer of security. Instead, operators such as DreamCity have been relegated to offering local TV dramas and older movie titles in studio libraries.
Legacy systems in the market, he said, have only been capable of "entitlement checking" - ensuring that people who access the VOD system are legitimate subscribers who have rights to the service.
With session-based encryption now enabled, cable operators such as DreamCity will have an easier time acquiring newer titles and preparing themselves to cross swords with a phalanx of IPTV competition that should soon get approval from the government to offer broadcast content. South Korean cable operators also face competition from DBS, but satellite companies, have been hindered by the area's mountainous terrain, Kunert said.
Concurrent, he said, expects to announce a similar deal with another South Korean MSO as early as this week. Today, Concurrent has VOD deployments there with CJ CableNet, C&M, and Korea Digital Cable Media Center Co. Ltd., which serves a consortium of cable MSOs, including DreamCity.
Kunert said Concurrent believes this initial marriage of VOD and conditional access in South Korea will serve as a VOD blueprint for other parts of Asia, including China, Taiwan and Singapore.
Pace integrates Tahoe,
Vegas models with C-COR VOD platform
Pace Micro Technology said it has successfully integrated its new "Tahoe" and "Vegas" set-tops with C-COR Inc.'s On Demand platform, which is comprised of the company's n5 and n5C servers and nABLE backoffice system.
Pace said it has already completed similar integrations with two other major VOD server/backoffice vendors: Concurrent Computer Corp., and SeaChange International.
The next vendor likely to be on Pace's VOD integration list is Tandberg Television, maker of the OpenStream backoffice system.
'SKOOL' in session
for Rainbow's VOD programming expansion
Rainbow Media Holdings last week announced it would expand its original video-on-demand (VOD) fare with new services based on its "SKOOL" franchise.
|Rainbow has set March 29 as the launch date of 'LIFESKOOL.' Other free-on-demand services from Rainbow also will adopt the 'SKOOL' brand.|
The broader initiative, which will see the phasing out of Rainbow's Mag Rack brand, will adopt the "SKOOL" moniker across Rainbow's entire library of free, original VOD content.
Rainbow is kicking off the expansion with LIFESKOOL, a service focused on "personal growth and development" that replaces content originally offered via the Mag Rack service. LIFESKOOL, set to launch March 29, will replace the following Mag Rack programming categories: Cooking; Yoga and Wellness; Money, House and Home; Relationships; Health and Fitness; Pets; Music; Cars and Motorcycles; Gaming; Kids and Family; and Science and Nature.
Later this year, Rainbow will launch other "SKOOL" brands, including MUSICSKOOL (music lessons and instruction).
LIFESKOOL and MUSICSKOOL will join SPORTSKOOL, a service that Rainbow launched three years ago, and that today is available to about 22 million subs, thanks to distribution deals with major cable MSOs.
Moving forward, all "SKOOL"-branded VOD services will be formatted in high-definition, the company said, noting that the new initiative is led up by Mag Rack and SPORTSKOOL General Manager Daniel Ronayne.
VOD channel aims to drive business to Lightpath
Optimum Lightpath, the business services arm of Cablevision Systems Corp., has launched a VOD channel dedicated to content that extols the benefits of Metro Ethernet.
The on-demand offering, aimed at attracting more business clientele for Optimum Lightpath's Metro Ethernet services, will try to reach potential business customers in their homes.
Accessible on Cablevision's iO channel 660, the fare is available to more than 2 million iO digital cable customers in Optimum Lightpath's service area of Northern New Jersey, Westchester, Connecticut, Long Island, the Bronx and Brooklyn.
Programming includes interviews with telecommunications industry luminaries such as Ethernet inventor Robert Metcalfe and Metro Ethernet Foundation (MEF) President Nan Chen. Other segments feature educational content from Optimum Lightpath executives as well as customer success stories.
Optimum Lightpath said the content in its entirety is also available on the Web.
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