Every set top box manufacturer that grew up in the IPTV world, should, in our opinion, be looking to expand their horizons. Almost every force in the industry is geared up to thinning their margins and making their contribution a commodity. That’s not to say that this is easily achieved, but with operations the size of Microsoft, Alcatel, Nokia Siemens Networks and soon Ericsson, all wanting the set top to take up less and less of the price of an IPTV network, it’s just as well to have a second strategy up your sleeve.
Companies like Amino have always insisted that it doesn’t have to kow-tow to these majors, and that the set top environment in IPTV is more complex than in any other marketplace and that integration skills with DVR, network DVR, VoD, conditional access and presentation software layers mean that few other companies can do the job well. But still the company has perhaps bowed to local operator pressure and bought an entirely different set of skills in-house, in the shape of AssetHouse Technologies.
AssetHouse Technologies is a UK operation that originally spun out of British Telecom, which solved all the problems relating to content management metadata behind the scenes for the BT Vision hybrid IPTV offering.
The company has had two rounds of cash, totaling around $16 million from London Merchant Securities but will change hands for just $2.7 million.
The feeling that it is a fire sale cannot be avoided, but while it may not be worth $16 million, the company may well end up being comfortable worth the asking price, especially as our old friend Andrew Burke, who was CEO at BT Vision in the four years leading up to its launch, has emerged from the Amino Board, and will take the reins as CEO at AssetHouse which will run as a separate subsidiary.
The fate of AssetHouse was very much in the balance with BT Vision, and while it has been negotiating for some time with overseas IPTV operations all over Europe, it has a continuing revenue stream for as long as BT Vision is still in business. Contacts tell us that it was touch and go among BT senior management for a while, but that now that the service is north of 200,000 subscribers, that service appears to be safe after a difficult first year.
British Telecom has always felt it could not compete with the UK’s hugely successful Freeview DVB-T TV service, so BT Vision is really a Freeview box with the EPG integrated with a Quality of Service VoD service.
Internal observers told us that BT Vision would likely be scrapped if it did not achieve 200,000 customers by the year end, but having made it to 120,000, doubling customers in the last quarter of 2007, and having reached 150,000 by February, BT Vision is now unlikely to face the chop and the company is targeting the 4.4 million broadband lines it controls through BT Retail as its core sales base.
The key to the AssetHouse vision however is not just to supply VoD, but to create databases of video assets which can be delivered to any device across any network, and as operators move closer to three way delivery strategies to TV sets, handset and PCs using IPTV, multiple strands of Mobile TV and web delivery, then having a slick asset structure in place will suddenly become more and more important. Getting people to realize this from the standpoint of being a set top supplier will be tricky, and we don’t think that Amino can act as much more than a stream of hot leads for AssetHouse, though that might be enough.
Other major IPTV services around the world, such as AT&T, use major suppliers like IBM or build their own back end structures using Microsoft tools, so that’s what AssetHouse is up against.
“The opportunities here are enormous and are set to change the delivery of rich media to households,” said Burke in a statement. “This is not only an opportunity for service providers to sell more IPTV, it marks the next step in consumer content delivery and distribution. Together, Amino and AssetHouse will close the loop between the set-top box and the merchandising, taking IPTV to the next stage.”
What he is referring to here is the way AssetHouse has specialized in making offers available right out of the TV screen, to push the use of VoD, educating and informing the consumer of the capabilities the system has.
AssetHouse offers an abstracted content management approach that separates presentation logic, from content data and allows IPTV offerings to be managed at the product level. It also allows operators to do things like ingest content for a future date, make multiple languages available on a film, or set up film sound tracks as a downloadable service all because of the abstracted way it treats assets internally, not mixing them up with the core applications.
AssetHouse works with Microsoft MSTV middleware, and Windows Media DRM, so we suppose that it will also work with PlayReady, when that comes out.