Ericsson and Nokia do media deals, but with different aims in mind

First quarter results from Nokia and Ericsson highlighted all kinds of contrasts between the old rivals (see separate item), and the media segment is a case in point. In a market which both companies saw as a source of juicy growth, Ericsson is now looking to exit, and is currently announcing deals which are clearly designed to inflate the price. Nokia  is also talking up new partnerships, including one with US over-the-top TV platform Kaltura,  but these efforts seem geared to building a media business organically as part of the FInnish firm’s moves into “strategic adjacencies”.

Ericsson is planning to sell a variety of TV assets – Tandberg TV, Azuki, Mediaroom, Red Bee, Fabrix nPVR, Envivio encoding, Technicolor Broadcast – in a fire sale for a $1bn asking price. At the NAB (National Association of Broadcasters) show in the US last week, it announced a range of deals related to those same TV assets, presumably in a bid to stoke interest and push up the price.

Telstra of Australia became the first public new customer for the renamed Media First system (formerly Mediaroom), since Ericsson acquired it from Microsoft. The deal is only really at the production level, covering what Ericsson describes as virtualized video processing (cloud-based workflow and encoding).

This follows the announcement, in September, of a deal between Ericsson and Intel to shift media data centers entirely to the cloud. At the time, it said it would collaborate with Intel to build a cloud-centric media infrastructure for virtualized media applications, combining Ericsson’s HDS8000 Hyperscale datacenter system and Intel Rack Scale Design. This would enable media data centers to carry out processing, delivery and cloud DVR, based on microservices.

Telstra will install MediaFirst Encoding Live, MediaFirst Encoding On Demand, MediaFirst Packaging, and MediaFirst Management Controller.

Another TV deal came from Latin America’s Televisa, featuring Ericsson’s AVP Encoder.
Televisa will use it to increase its investment in HD services distributed through ATSC broadcasts in Mexico. The only other country in Latin America to use ASTC is Guatemala, so this will not really affect Televisa’s over-the-top service Blim, which runs as an SVoD throughout the entire continent.

Yet another Ericsson deal announced last week was with the Inspur Software Group, a cloud computing and big data service provider, which will partner with Ericsson to give it access to more business in China. hosting Media First cloud services for customers in that country. It has already lined up its first customer in Shandong Cable Network, an existing Ericsson customer for the past four years, which is taking the next step to its VoD by taking its preparation to the cloud.

Of course, all these deals will have been in the works before Ericsson announced its strategic review, which will see it exploring sale or partnership options for media, IT and cloud businesses, and a doubling-down on traditional customer bases. So there will be uncertainty for the new customers and partners, until a new buyer is announced. At least that buyer will gain a coherent content discovery strategy, something which has been lacking at Ericsson, though this is only for broadcasters. The Swedish firm is bringing together a large trailer library in Internet Video Archive, complete with metadata and images. It has worked on this with ColorTV, a video indexing specialist, and Austrian recommendation specialist XroadMedia. Ericsson’s discovery ecosystem will be delivered through a single API in real time, the company says. The offering offers 14,000 sources of video globally and a portfolio spanning 10m films and titles.

Over at Nokia, the Finnish firm has continued its run of media-related announcements amid a period of significant business transition, with the news that it is partnering with US OTT video technology specialist Kaltura, to offer a joint personalization and monetization platform.

The deal will combine the Kaltura TV Platform and Nokia Velocix suite of products, to offer operators and media companies a modular system for supporting OTT video deployments – covering cloud DVR, content delivery networks (CDNs), monetization models and social media integration.

Dr. Shay David, Kaltura’s co-founder and general manager for media and telecom, told Wireless Watch’s sister service, Faultline Online Reporter: “Global tier one service providers and media companies are the target customers of this partnership. Nokia will bring video network management capabilities, cDVR , video optimization and packaging, as well as strong SI capabilities. Kaltura has best of breed converged OTT IPTV back end system and front end apps, including all the components necessary for media companies and telcos to build a top tier next gen TV offering.”

He added: “2017 is all about convergence, all across the market, and this partnership is about facilitating this change.”

The collaboration could potentially be a precursor for full acquisition down the line. Kaltura’s technologies would certainly benefit Nokia in its IP video delivery business line, which is becoming increasingly strategic, particularly as the Finnish company is plowing forward with its virtual reality ventures, for which Kaltura has also jumped on board as an integration partner.

The partnership, and any possible future takeover, could also help Nokia get into Kaltura’s existing accounts, which include HBO, NBCUniversal, Warner Brothers, Paramount TMZ, Vodafone, Philips and Siemens, among others.

And if Kaltura could pick up a major operator account through Nokia’s huge global reach, it could be a game changer for the company. The press release suggests that the offering will be targeted at OTT video operations within telcos, of which Nokia has an abundance on its customer list. Nokia could give Kaltura a helping hand into Asian markets, where the prevalence of OTT video on mobile devices is at its most prolific.

Nokia says it has landed over 50 accounts in the Asia Pacific region, including NTT Docomo, KDDI and Softbank in Japan; SK Telecom and KT in Korea; Bharti Airtel, BSNL, Idea, Videocon, Tata Docomo and Vodafone in India; plus a handful in Indonesia, the Philippines, Australia and others.

For the less well developed regions, Nokia will likely be pushing its IP video delivery products to customers as added extras as the operators look to expand, or begin, their OTT video roll-outs.

Nokia’s Velocix CDN, inherited when it acquired Alcatel, has some major Tier 1  deployments, most recently at Sky in the UK for driving its OTT video traffic. It also claims to provide the CDN in 10 out of 12 countries for Liberty Global in Europe.

Paul Larbey, head of Nokia’s IP video business division, said in a statement: “Today’s TV landscape is constantly evolving into a personal experience for each and every user on their preferred devices. Joining forces with Kaltura allows us to ensure that our customers keep pace, and enjoy new revenue streams from advanced OTT services.”

Ron Yekutiel, Kaltura co-founder and CEO, said in the announcement: “Media companies, content owners, operators and service providers are all delving into the OTT TV world, looking to reach their audiences and keep their attention. Key considerations for any current TV offering include monetization flexibility, excellent cross-device user experiences, and the ability to scale quickly and cost effectively – Kaltura’s TV platform addresses exactly these main elements.”