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1 June 2017

Netgem barges into German IPTV market to duel Zattoo

French multiscreen TV vendor Netgem is teaming up with small German B2B platform provider Purtel to build a white-label IPTV product for operators – a deal which marks Netgem’s entrance into the German video market and summons a direct threat to Swiss internet TV provider Zattoo.

PurTV, powered by Netgem’s Cloud TV software, is being marketed as a way for fixed network operators in Germany to evolve into triple play providers by adding a TV offering to their existing internet and telephony businesses.

Netgem has adapted its Cloud TV software, which is at the heart of its flagship TelcoTV product, specifically for the IPTV and cable market in Germany. PurTV combines linear TV with SVoD, TVoD, time-shift functionality, and is available on mobile devices and on its hybrid 4K set top for DVB-C broadcast and IPTV distribution in unicast and multicast streams.

Although purTV is targeted directly at German operators, a budding relationship with Netgem could eventually lead to Purtel picking up its first customer outside of Germany. This would mark a significant achievement for Purtel, which was founded in 2003 but has never broken outside of its home country. Although Germany being Purtel’s core and only market is unsurprising due to IPTV being far more popular there compared to other countries in Europe, due to the proliferation of HbbTV – the standard which harmonizes the delivery of IPTV, broadcast and broadband entertainment services.

Purtel’s primary business is VoIP-based telephony, as well as providing products and services for the integration of automated processes, the provision of routed CDRs (Call Detail Records), billing and API interfaces.

The collaboration means Zattoo now faces fresh competition from two companies with a wealth of experience in the sector – Purtel with significant experience in navigating the German market and Netgem with the expertise in IPTV products.

In Germany, Zattoo supplies its white label platform to Telefonica Deutschland, as well as regional operators EWE TEL and M-net, which has been used to launch mobile TV apps, offering linear TV channels via consumers’ in-home WiFi networks, using set top hardware from Abox42.

M-net’s IPTV platform TVplus, which launched in March last year, is hosted and managed by Zattoo from the head end to the apps, allowing customers to watch live content simultaneously on up to three different devices via a connector – with access to more than 100 live channels. M-net claimed at the time this allowed it to launch a service without investing in expensive and complex technologies.

We know from our own research that broadcast catch up in Germany is just about holding pure play OTT services at bay for now, but it won’t be long before even smaller regional operators will have to begin investing more extensively in OTT to stem customers losses.

Zattoo has built its end-to-end platform over 8 years, replacing CDN distribution with direct network peering that allows for a managed quality distribution of the video streams in unicast IPTV. Although Zattoo confesses that OTT video delivery through a top CDN provider is a “compelling alternative”.

Purtel MD, Dr. Markus von Voss, said, “We are Netgem’s first German technology partner and this partnership will enable us to offer our clients purTV and work with them to deliver a high performance TV-as-a-service solution to complement their existing services.”

MD at Netgem, Sylvain Thevenot, added, “The German triple-play market is the largest in Europe, and still very fragmented, with 1.5 million homes in particular addressed by local ISPs without a 21st Century TV experience. Our CloudTV solution makes it financially and technologically possible for operators to rapidly deploy innovative entertainment services to these households. Today, is this first deployment of our CloudTV solution tailored for Germany, and it marks another milestone in Netgem’s market development plans.”

Netgem announced its first customer win in the Middle East earlier this year with Ooredoo in Oman, and we expect it to add a German operator to its growing customer list very soon.

Netgem recorded 2016 revenues down 6% year on year to €74.3 million ($79.2 million), while increasing gross profit by 7% to €27.5 million ($29.3 million) for the year.