Faultline reached the Dreampark stand at IP&TV World Forum in London, and strangely found that there were no executives to give us another briefing on the Swedish IPTV middleware group. We waited around and then skulked away, only to find that most of the senior execs must have been huddled in a corner somewhere with Motorola execs, hammering out the details of a deal whereby Motorola would buy what we see as the youngest of the old IPTV middleware players. No price was given on the deal.
Back in 2006 the company burst on the scene, co-incidentally in a deal with US DRM specialist Widevine (now part of Google) and IPTV set top innovator Kreatel (long since acquired by Motorola) in Denmark with the Swedish Space Corporation, which in turn distributed broadcast TV to city and regional networks across Sweden, Norway and Denmark.
Since then Dreampark has studiously avoided chasing tier 1 telco pipedreams, but usually manages to chase down and replace ailing IPTV software, now up for second generation replacement, especially in and around Scandinavia.
Last week we reported that Dreampark has replaced Multivision with its DreamGallery as the middleware incumbent at tiny Alcom in Finland, another deal where it shares a customer with Motorola’s Kreatel. As far as we can ascertain Multivision has long ceased updating its IPTV middleware product Modulution and has moved out of the market. This type of 10,000 homes system has been meat and drink to Dreampark over the past 5 years, and Motorola could potentially lead it to break through into higher value deals, further up the food chain.
We had always tipped Motorola to acquire just this type of company back in 2005/6 when it began making set tops for Microsoft Mediaroom IPTV customers, but shared very little of the high margin software business or the high value implementation work (though it did take a prime role at Verizon’s FiOS). Would it come out with a full bloodied IPTV suite, we asked back then, so that it was not reliant on Microsoft Mediaroom for contracts?
Recently Motorola has bought US DRM specialist Secure Media and Israel’s Bitband distributed VoD server business, to go with its Kreatel IPTV set top business acquired back in January 2006. By April 2007 Motorola had added a partnerships deal with Israel’s ECI Telecom for providing the IP DSLAMs that IPTV needs, and had also acquired USD encoder business Tut Systems and VoD applications house Vertasent, as well as VoD innovator Broadbus which invented a way of serving VoD files from huge caches of RAM. Unfortunately Broadbus’s good work was almost immediately overtaken by the emergence of Edgeware, another Scandinavian IPTV company which has a strategy for VoD appliances throughout the network, using Flash Memory based servers. Later Motorola re-invented this piece of history saying that Tut was always acquired for its cable contribution in Edge QAM rather than its encoding capability, as it went ahead and acquired encoding specialist Modulus Video, which had been the first encoder designer able to encode video for AT&T’s tough U-Verse HD picture in picture requirements.
Motorola continued adding this kind of IP focused capability in and around the IPTV theme with the addition of Terayon Communications (video processing), Ucentric (home gateways), Leapstone (a service delivery platform).
And while Motorola went on to sell many more Kreatel IPTV set tops, way into the millions, and take the number one spot here, the rest of the acquisitions have, for the most part, continued as separate businesses which in many cases have withered on the vine.
Which is why, in our view, Motorola’s first round of purchases in and around the IPTV market were confused and without genuine focus. This time around it might be different and we think we can begin to ascertain a pattern.
This is thrown into sharp relief by a report from Informa out this week which says that by 2013 there will be more Over the Top video viewers than IPTV customers, and although that report was muddle headed (it contrasts free to air broadcast catch up over the top video, with one particular brand of pay TV), it does show what we all knew already, there is going to be lots and lots of Over the top video, and Motorola wants to get in on the act this time.
One opinion that we heard at the IP&TV World Forum show this week was ‘that you wouldn’t launch a multicast QoS IPTV service now would you, if you wanted to launch a pay TV service and use IP, you’d use adaptive streaming and the internet.’ It’s one that we’d mostly agree with. Old style IPTV involved a huge upgrade to access networks, new types of DSLAMS, expensive and overly complex set tops, a re-invention of conditional access, and the creation of an entire new middleware industry.
Very little of this needs to be carried out for the next Over The Top revolution and in particular TV everywhere approaches from pay TV operators, can already benefit from the improved access network infrastructure that has been so essential for the global spread of broadband over the past five or six years.
The potential number of Over the Top operators is going to be higher, and they are going to be of two types – the ones that Motorola knows well, cable and other pay TV operators, as well as broadcasters ‘ each offering different types of Over The Top TV ‘ either catch up services from Broadcasters or everything up to full cable TV bouquets.
At IBC last September Motorola showed what seemed little more than a framework under the brand of Medios, which was to be targeted at what it calls multi-screen management ‘ your TV via conventional means and your PC and tablet via the internet, as well as smart phones.
The aim was to integrate web content with walled-garden content on both managed and unmanaged networks. What it showed at the time lacked conviction, it was the normal asset management, security, and service assurance modules with little in the way of personalization and search and no platform for operators to monetize OTT video. That’s largely because they have few plans to actually monetize it. It seems that half of the pay TV operators in Europe have a plan to build a route to take video to tablets, at least in the home, and there is little in the way of a business model ‘ this is a churn reduction exercise for pay TV, and a landgrab for broadcasters which first and foremost requires that people watch the better content from broadcasters in catch up mode, and think about advertising to monetize that later on.
In the light of that we can see that Secure Media was one of the cheapest software only DRMs on the market to acquire, out of those already accepted by Hollywood; BitBand represents a way of placing video appliances on the edge of telco networks, in a distributed CDN configuration, so that they don’t use up precious core bandwidth sending video needlessly across their networks, and Dreampark offers the software to manage the process both in the middle of the network and the experience to manage the UI on the playing device. So it has bought three IPTV companies, but is unlikely to win a single classic IPTV implementation.
Our thoughts are that Motorola bought the wrong VoD player in Bitband, and should have taken a longer look at the roadmaps of companies like Edgeware, which might suit that style of CDN class VoD integration better, but that apart from that this is genuinely an opportunity for Motorola to get a piece of the action this time around, having only received set top orders in IPTV in the past.
So while Dreampark claims to be the most deployed IPTV middleware in Europe, it is far from it when measured by the number of screens that it supports. It’s probably the least deployed when measured by active homes. And it is this which points to a cheap price for the company, much like Secure Media, a company that CAN do the job, which costs the least.
Dreampark HAS already embraced HTML 5.0 and has made a big feature of its Scalable Vector Graphics for HD UI design, so, as we said, it’s in good enough shape to be the finished middleware article.
Dreampark announced at the IPTV World Forum that has just landed one of its classic Scandinavian contracts, with Faroese Telecom offering IPTV using it. The Faroese Islands only have a population of 50,000 and we’re pretty sure that not every hone there has electricity, never mind a TV.