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Kaltura bags Nokia deal – precursor to a takeover or contract goldmine?

Nokia has continued its run of 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. Kaltura’s platform is an end to end OTT service, so perhaps only part of the product is now part of this deal.

The deal involves the combination of 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 technologies including cloud DVR, CDN, monetization models, and social media integration.

This is perhaps the worst time to teaming up with Kaltura, with its Vodafone account seemingly on the ropes, but the collaboration could potentially be a precursor to Nokia eventually acquiring Kaltura down the line. Kaltura’s technologies would certainly benefit Nokia in its IP video delivery business line, which is of course becoming an increasingly pivotal part of Nokia, particularly as the Finnish company is plowing forward with its VR ventures – for which Kaltura has also jumped on board as an integration partner.

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

Dr. Shay David, Kaltura Co-founder and General Manager, Media and Telecom, told Faultline Online Reporter, “global tier one service providers and media companies are the target customers of this partnership. In terms of the offering, we’re talking about a combination of products and services, both companies will bring best of breed capabilities. 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. Combined, the two companies are able to offer an end to end solution that allows to cut time-to-market and increase monetization opportunities in this rapidly changing field. 2017 is all about convergence, all across the market, and this partnership is about facilitating this change.”

Earlier this year, Cisco seemed to steal a large chunk of the Kaltura contract at Vodafone Germany, after the operator launched its new cloud-based multiscreen 4K UHD video service GigaTV. This turned out to be built around Cisco’s Infinite Video technology, instead of being a primarily Kaltura-based project. As Kaltura’s only tier 1 operator customer, it must hold onto Vodafone for dear life, and the integration of Nokia’s IP video products from its Velocix portfolio could be sure fire way to ensure this.

Nokia will be offering Kaltura’s services to its existing customers as part of the deal. If Kaltura could pick up a major 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 telcos’ OTT video operations, of which Nokia has in abundance within its customer list. We would suggest that Nokia could potentially 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 these customers as added extras as the operators look to expand, or begin, their OTT video roll outs. Of course, a single contract in India, for example, would not fill the void left by losing a tier 1 contract in the US or Europe, given the harshly lower ARPUs.

However, operators in developing regions are more focused on getting the OTT video delivered successfully in the first place, while few are yet to invest in recommendation or personalization software – which is one of the main pieces of the puzzle Kaltura brings to the table.

Meanwhile, the major accounts in developed areas like Japan are pretty much walled gardens for small to medium sized vendors. Therefore, maybe Kaltura could prosper most by focusing on retaining its current contracts for now, even if that does mean handing over a slice to Nokia.

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 for 10 out of 12 countries for Liberty Global in Europe.

Paul Larbey, Head of Nokia’s IP Video Business Division, said, “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, Chairman 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, which is even further enhanced by the great products and impeccable services provided by Nokia.”

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