2011's Online Video Acquisitions Set the Stage for an Interesting 2012
Acquisitions in 2011 set the stage for an interesting 2012, as major companies announced the purchase of key streaming media tools geared towards various parts of the media consumption supply chain.
Some of the acquisitions focused on delivery platforms, including web acceleration and aggregation of viewer eyeballs, while other acquisitions sought to fill gaps in the growing universe of devices on which consumers choose to view premium media content.
One of the first acquisitions of the year was Cisco's announcement in February that it planned to acquire Inlet Technologies. Cisco paid approximately $95 million in cash, including retention-based incentives, to acquire Inlet, and announced plans to integrate Inlet into the Cisco Videoscape, a "comprehensive TV platform for service providers that brings together digital TV and online content with social media and communications applications to create a truly immersive home and mobile video entertainment experience".
"The acquisition of Inlet will enable our customers to leverage the network as a platform to deliver innovative video experiences to consumers on any device," said Enrique Rodriguez, senior vice president and general manager, Cisco's Service Provider Video Technology Group, in a press release.
Inlet's adaptive bitrate (ABR) encoding technology has been used to stream media across managed and unmanaged networks, a natural fit for Cisco, given the latter's core competency in managed networks and its ownership of Linksys for home and small business unmanaged network/network access. The Inlet acquisition means Cisco's Videoscape could touch many parts of the delivery chain, all the way to the end user's home network.
Polycom's acquisition of Accordent allows the integration of synchronized content and asset management of streaming media content to complement Polycom's voice- and video-over-IP collaborative conferencing solutions.
The Accordent acquisition, for which Polycom paid $50 million in cash, comes about one year after Logitech acquired another videoconferencing company (LifeSize) in part for its VideoCenter product. Yet Polycom sees asset management as the key Accordent differentiator for Polycom's unified communications solutions.
"We believe Accordent has the most elegant video content management solution on the market," said Sudhakar Ramakrishna, Polycom chief development officer. "This transaction positions Polycom at the forefront of end-to-end video and content management."
Telestream, who acquired Anystream in 2010 was itself acquired by private investment equity firm Thoma Bravo, LLC, at the end of 2011. What's interesting about this acquisition is that it's an alternative way to accelerate growth in an already hot marketplace.
Telestream has been profitable for more than a decade, since 2001 and had self-funded three previous acquisitions, including Popwire and Anystream. So the move appears to be a good deal for Telestream, which will continue to operate with the same management team as an entity independent of Thoma Bravo.
"The video ecosystem continues to grow and expand as customers require increasingly complex tools to manage their end-to-end video workflows," said A.J. Rohde, vice president at Thoma Bravo. "Thoma Bravo sees significant opportunity in the digital media market, and Telestream is well positioned as a strong platform for increased investment in the industry."
There are few other companies in the space sitting in Telestream's enviable position of being profitable for an extended period of time, so expect to see a bit more movement in 2012 towards this alternate way to obtain growth capital, a sign that the industry's continued growth is attracting significant institutional investment.
Another part of the market that's hot is web acceleration, especially in the mobile platform segment of the market. Akamai, a provider of content delivery network (CDN) services is paying $268M for Cotendo, whose web acceleration services have been used by AT&T and others in the three years since Cotendo was founded.