|
 No surprises:
Ericsson gives Tandberg TV deal the go-ahead
As expected, Ericsson will move forward with its intent to buy Tandberg Television despite falling short of a stated condition that holders of 90 percent of all Tandberg shares accept the deal.
On Monday (March 19), Ericsson said it had received the okay from shareholders representing 87.4 percent of Tandberg Television shares. Ericsson said an acceptance level below the 90 percent mark could be due to possible corrections and changes following registration with the Norwegian Central Securities Depository.
By waiving the earlier condition, Ericsson has all but paved the way toward completing its unsolicited $1.4 billion bid for Tandberg, a move that trumped an original cash and stock offer by ARRIS.
ARRIS officially dropped out of the bidding last week. It received a termination fee of $18 million, though it spent in the range of $9 million to $10 million toward its original bid for Tandberg.
Tandberg announced last Monday (March 12) that its board of directors unanimously accepted the Ericsson offer.
— Jeff Baumgartner, xOD Capsule Editor, and CED Editor-in-Chief
Analysts not ready to bite on SeaChange software strategy
SeaChange International may be opening up its market opportunities by opening up its VOD software and backoffice, but some analysts are still a bit wary of that strategy.
Brian Coyne, an analyst with Friedman Billings Ramsey cited “conflicting views” on SeaChange’s outlook – optimism about the company’s VOD service opportunities, but tempered by questions surrounding its transition to a more software-oriented revenue model, as well as weaker margins shown in the company’s Q4 numbers.
He reiterated his firm's "Market Perform" rating and $8 price target on SeaChange shares, which closed Friday (March 15) at $7.95, up 4 cents.
The opening up of SeaChange’s “Axiom” software and related backoffice systems reflects the competitive conditions of the VOD sector. Concurrent Computer Corp., one of the last holdouts, announced in January that it would open up its backoffice. Still, the expeditious nature of SeaChange’s decision can certainly be traced to its new master agreement with Comcast Corp., which has restarted its Next Generation On Demand (N-GOD) initiative. Comcast, SeaChange noted last week, is the first MSO to partake in the vendor’s VOD software subscription program. The others so far remained unnamed.
One goal of opening up Axiom is to ensure it can run on third-party servers – and address a key desire cited by some larger service operators. SeaChange, however, has yet to announce any integration deals with outside server vendors.
Opening up Axiom represents “a big opportunity for us, and one of the things we’re seeing with some large operators is that they would like to have consistency for the management and the monitoring of their services,” said SeaChange SVP of Strategic Planning Yvette Gordon-Kanouff, during SeaChange’s earnings call last week.
If operators operate multiple VOD sites that also use different types of software, for example, they are also seeking to have “commonality” in that software whenever possible, she added, she added.
In Q4 numbers posted last week, SeaChange said revenues were up 21 percent year-over-year – to $40.1 million – helped in part to gains at its broadband and VOD division. Quarterly revenues for its Broadband segment (VOD and ad insertion gear and software) were $20.1 million, up 41 percent year-over-year.
However, roughly $2 million of VOD-related revenue was deferred as of Jan. 31, 2007 to reflect the bundling of 12-month software subscription services with five system orders. Those deferred revenues will be recognized "ratably" over the subscription period, SeaChange said.
SeaChange Chairman, CEO & President Bill Styslinger said the company had secured five new software subscription customers. Other than Comcast, SeaChange has yet to pinpoint who makes up the balance.
“These wins are proof that the software subscription program is gaining traction and will be a successful business model,” Styslinger said. “We had hoped to be able to recognize that revenue; however, it had to be deferred.”
As for other trends, he pointed specifically to new “day and date” deals operators are securing with studios, as well as wider availability of nDVR-type apps such as Virgin Media’s “Catch Up TV” or Time Warner Cable’s “Start Over.”
“We believe the trend to record broadcast television and to make it immediately available will continue for the foreseeable future, and will drive the need for more sophisticated software and more storage and streams.”
Flash server in SeaChange’s future
On the product front, Styslinger said SeaChange plans to introduce a Flash-based server in the second half of 2007. That device aims to eliminate the need for slower and less durable disk drives.
SeaChange showed off a prototype of its Flash server at a recent Time Warner Cable engineering conference “and found a warm reception for it,” Styslinger claimed.
Speaking of VOD software deals...
Tandberg Television sent out a somewhat cryptic announcement that it had won a VOD software order valued in excess of $23 million, from a “leading” but undisclosed cable TV operator. A Tandberg official said the deal was with a U.S.-based operator, but did not disclose further details.
VOD insiders speculate that Comcast Corp. is that unnamed MSO, citing the resurgence of its Next-Generation On Demand (N-GOD) project (recall that Comcast, as part of its earlier N-GOD efforts, had matched the OpenStream system with servers from Broadbus —now part of Motorola Inc. — and Arroyo Video Systems — now part of Cisco Systems— in its South Bend, Ind., system.).
Tandberg said the minimum purchase commitment is $23.7 million for products and services to be delivered in 2007 and 2008.
Tandberg obtained OpenStream after purchasing N2 Broadband in 2004 for $118 million.
OpenTV sees red in Q4, but revenues climb
OpenTV Corp. posted a Q4 net loss of $3.4 million (3 cents per share), versus a year-ago profit of $2.9 million (2 cents per share). Net income in Q4 2005 reflected a $3.1 gain related to the sale of an investment in a private company.
Aided by higher middleware shipments, the interactive television software and apps specialist also recorded revenues of $26.7 million, up 10 percent from $24.2 million in the year-ago period. For the year, OpenTV notched revenues of $101.9 million, up 17 percent versus all of 2005.
OpenTV revenues were a touch better than some analyst estimates. Oppenheimer & Co. was expecting revenues of $25.8 million.
“While we were encouraged by middleware growth, we continue to be disappointed by the lack of earnings leverage to their model,” said Oppenheimer analyst Alan Bezoza, in a research note. Oppenheimer maintained its “Neutral” rating on the stock. It presently has a “Buy” rating on OpenTV rival NDS Group.
Kudelski Group recently grabbed voting control of OpenTV, a move that is expected to put the company on better competitive footing with NDS. In the wake of that change, Kudelski and NagraStar vet Alan Guggenheim has been named president and CEO of OpenTV. Former Time Warner Cable CTO Jim Chiddix most recently held the post of chairman and CEO.
OpenTV said its middleware has been deployed in about 81 million set-topss, led by customers such BSkyB, EchoStar Communications and Sky Italia. Middleware revenues in Q4 jumped from $17.6 million to $21.3 million.
Guggenheim, during an earnings call with analysts, said OpenTV is “charting a course for accelerated growth and profitability over the next three to five years as the opportunities in middleware, advanced advertising and participation technologies unfold.”
MobiTV, NBC Universal bring primetime VOD to wireless
MobiTV Inc. and NBC Universal (NBCU) are pairing up to bring primetime on-demand TV programming to wireless networks.
In addition to the full-length primetime VOD lineup, the companies will offer selected short-form programming from Bravo, the SCI FI Channel, USA Network, Telemundo and mun2.
The five new ad-supported channels will debut on the MobiTV service in Q2.
Consumers will be able to access full episodes of select NBCU primetime shows starting at $1.99 for a 24-hour viewing period, although these rates are subject to change by participating wireless carriers, MobiTV said.
For subscribers with a broadband Internet connection, NBCU will offer a live feed of its CNBC programming, via MobiTV's online TV service, as part of the subscription plan. CNBC and MSNBC were among the first networks launched on the MobiTV service in 2003, according to MobiTV.
Advertisement
For New Product Information, visit CED's Product Showcase Today!
Click Here.
We are making changes and additions (including international deployments) to our
Web-based "living" deployment chart. If you have a new deployment to report for the VOD Scorecard and the Web-based deployment chart, please contact CED Editor Jeff Baumgartner.
|
