Vendors like to talk about tipping points when they think it will suit their strategy, hoping that their small contribution will tilt an industry in a fundamentally new direction. Imagine Communications is the latest to recruit this phrase just ahead of NAB 2015 where it wants to show that after a year of frenzied and somewhat impressive acquisitions it has now arrived as a major force in pay TV infrastructure, built for success in the era of cloud based Internet video delivery. We are not really talking about a tipping point, more of a journey, but certainly progress along this road has been accelerating while Imagine has been amassing its portfolio.
Imagine Communications, not to be confused with the Irish ISP of the same name, has really emerged from a puff of smoke over the last 15 months. Or to put it another way it has been reborn as a much larger force than it was originally. Although only a year old as currently structured its history goes back five decades with Harris Broadcast, which produced traditional video transmission equipment and software. But more recently Harris Broadcast diversified into TV Everywhere, by acquiring adaptive bit rate encoding specialist Imagine Communications in December 2013. But then Harris did a sort of corporate reverse by splitting into two entities, one called GatesAir holding the traditional TV and radio transmitter business and the more interesting part taking back the Imagine Communications brand to focus on multiscreen and cloud DVR.
Since then Imagine has fleshed out a portfolio to embrace the whole IP content delivery chain and associated service enabling software. The two most notable buys were the advertising business unit of OpenTV, part of the Kudelski Group which also owns Nagra, last October and then in January 2015 multiscreen video head end and delivery vendor RGB Networks.
Also notable was the acquisition in April 2014 of Canada’s Digital Rapids for its IP and file-based media processing systems for live streaming, broadcast, video capture and ingest, as well as workflow management software. That also brought in big name customers, such as CBS, CNN, Comcast, Fox, HBO, NBCUniversal, Google and Netflix.
The final RGB takeover was highlighted as the real key move that completed the jigsaw by Imagine CTO Steve Reynolds, providing many vital components of its new CloudXtream end to end multiscreen package being demonstrated at NAB 2015 next month. This is a complete workflow package, but will be presented in two components, the CloudXtream cDVR and CloudXtream Dynamic Ad Insertion.
The CloudXtream workflow draws on the Selenio video and audio processing, multiplexing and compression platform, as well as the Zenium workflow software, from Digital Rapids. A key piece was the dynamic ad insertion technology from RGB Networks, which also brought software-based encoding, transcoding and packaging for ABR video distribution to IP-enabled devices. Elements of the Eclipse ad software from OpenTV are also there.
The CloudXtream cDVR is aimed at real-time and on-demand viewing on any fixed or mobile device, with support for subscription-based OTT services built in. It is being pitched strongly at MSOs as an alternative to hardware DVRs, which might seem to pit it against the gathering RDK movement. RDK is not of course anti-cloud, but is oriented towards a hybrid model where a home based media gateway plays a major role.
Imagine is betting on the cloud taking over the storage, management and distribution of video, arguing that this is better suited to multiscreen services embracing devices wherever they are and not just in the home. This is the tipping point referred to, but the more likely catalyst is coming from relaxations in regulations covering cloud storage of rights-protected media content.
We do not need to rehash all the history of cloud DVR, earlier better known as network PVR, going back to Cablevision’s famous victory in August 2008 establishing the precedent that operators as well as consumers were permitted to record content under existing rights.
What was not allowed was streaming content over the Internet as is necessary for cloud DVR to work, because this would be deemed a separate channel of distribution that would need additional rights. This is what led to the ludicrous fudge in the US and many other countries, where a separate instance of each piece of content had to be stored whenever a consumer requests it. If say 100,000 million people wanted to record a given popular episode, then 100,000 copies would be stored.
In regions governed by this private copy rule, operators could still deliver benefits to end users such as increased storage capability, while reducing cost and complexity, by relocating hard disks and tuners from set tops into their network. But it prevented them from achieving the bulk of further cost savings by holding just one copy of every piece of content and then just setting pointers when users “record” it.
In Europe the attitude to cloud DVR and private copy has been more relaxed than in the US, but with significant differences between countries and the caveat that operators are also constrained by rules imposed by rights holders as well as regulators. But at least some countries have been leading the way, notably Spain, Switzerland and the Netherlands, with the UK following more cautiously. France and Germany have been notable laggards, as was noted late last year by Vodafone-owned cable operator Kabel Deutschland, which stated cloud DVR services were not economically viable, not because of technology, but because legal regulations in Germany were so strict that they offset any financial gains.
Germany has been naturally cautious on almost all aspects of TV service development, while in France the main inhibiting factor has been paranoia by the principal broadcasters. The precedent there was set in May 2008, when a service provider called Wizzgo launched a cloud DVR platform, the first of its kind in France. A consortium of French content owners including France Television leapt in and brought proceedings against Wizzgo alleging copyright infringement. The case culminated in November 2008, when the Tribunal de Grande Instance de Paris declared final summary judgments against Wizzgo and imposed fines, after which it ceased operations.
But now we do have Swisscom operating single or “shared” copy cloud DVR, along with Telefonica in Spain and at least six other such services. Swisscom and Telefonica both use Alcatel-Lucent’s cloud DVR package, highlighting how Imagine Communications is not entering virgin territory here. Ericsson, Cisco, Harmonic and others also have strong plays, again aided by acquisitions, or in some cases partnerships. Harmonic for example developed a network PVR with Tivo, integrated with its own multiscreen backend.
Given the pace of its expansion Imagine Communications could be likened more to Kit Digital, which grew rapidly in the multiscreen arena before going bankrupt early 2013 and then reemerging as Piksel under new ownership and management in September that year. Since then Piksel has struggled to regain its earlier momentum, but has now managed to focus clearly on OTT service launches, having in January 2015 added a content acquisition package, taking care of rights negotiations and acting as an intermediary by working with content brokers.
Kit Digital was like Imagine Communications in amassing an impressive array of customers, but with the big difference that the latter is much better managed and has shown a surer touch in its acquisitions, which have been more consistent and governed by a clear strategy. It would be a major surprise if it suffered the same fate.