SecureMedia, one of the leading US IPTV DRM specialists, has been acquired by one of its biggest customers, Cavalier Telephone. SecureMedia offers its Encryptonite ONE Conditional Access/DRM system mostly to IPTV operators in the US.
Secure Media, makes a point of being the odd one out in IPTV DRM, using the RC4 encryption standard, which it claims lowers the processing requirement at the set top. It also has a completely different way of dealing with encryption keys from most of the AES based systems offered by companies like Verimatrix and Widevine, which are probably the two largest specialist independent IPTV DRM companies, chasing established CA firms which support cable and satellite such as NDS, Nagravision, Irdeto, Motorola and Scientifica Atlanta.
SecureMedia had dreams of offering an encryption system for portable players and handsets which was due a year ago, and of adding watermarking to its systems, as Verimatrix and Widevine have done, but acquisition by a customer is likely to mean that its product strategy is now dictated by Cavalier’s requirements.
No details were given of the amount of money that changed hands, but we can’t help thinking that if SecureMedia was healthy it would have stayed out of Cavalier’s hands, and so investors, which included Macrovision and Sony, are unlikely to have got their money back. Cavalier offers an H.264 IPTV network across fiber to the home with broadband access at 15Mbps, and it was probably cheaper to secure its supplier than to replace its DRM.
Sony was going to use Secure Media in some of its TVs to transmit video to other devices like video enabled remote controllers. Secure Media has existing installations with middleware from Kasenna at Cavalier Telephone, and others with Oregan Networks and when we last talked to them were working on one for Myrio. But since Myrio has had so few new accounts lately this may not have happened.
SecureMedia will remain an independent company, but its hard to see it widening its customer base now it is owned by an operator. Only NDS has managed to remain successful once it was acquired by an operator, as it is majority owned by News Corp.