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Synamedia back in Sky’s good books

Comcast, through its ownership of Sky, has taken a stake in long-term video technology supplier Synamedia. The new NDS company has, in our view, been the best positioned of the newly spun off video technology firms to arrive in 2018 – and this week’s undisclosed investment is likely to cement that position.

There was no word on what Sky specifically wants from the deal or if Synamedia will be offering its services to the operator, but we know the technology for the Sky Go system is a traditional video operation built up by NDS prior to its acquisition by Cisco, and it also built Sky Adsmart which has gone on to be a great success. What’s interesting is the original security system at Sky was switched from NDS to an Inside Secure DRM Fusion Agent, based on Microsoft PlayReady for portable devices, so this week will be cause for celebration for Synamedia, once again receiving approval from the European heavyweight in an early turn of events.

But what else should we expect from Abe Peled, Synamedia’s fabled Chairman? There is the potential for the vendor to become a central part of Sky’s future video efforts – as the operator begins its transition from a DTH satellite business to an online-only video provider.

Faultline Online Reporter said after speaking with Synamedia at IBC 2018 that most of its future revenue growth would come from online video, over the existing conditional access and middleware licensing contracts (although it has some big customer names). By online video, we mean DRM rather than conditional access, as well as cloud DVR and multicast ABR, but Sky has built a comprehensive streaming ecosystem comprising various technologies built up over many years. It has deep-set relationships with the likes of AWS Elemental, Piksel, Nokia, and more, including Cisco Infinite Video technology. The latter is a hosted system inherited when it acquired 1Mainstream, which comes ready made with extensions into billing, its own CMS and its own delivery mechanisms.

For now though, security remains a priority with password sharing Synamedia’s most recently addressed problem, homing in on an endemic in the video streaming sector which many operators are eager to crack down on – less so than the likes of Netflix where the phenomenon is perhaps more prevalent.

While a new product of sorts, Synamedia’s password sharing push uses elements from Cisco founded on various machine learning and behavioral analytics tools. Synamedia is focusing the underlying platform on the two related but distinct challenges of addressing large scale piracy involving distribution of stolen credentials and the more casual password sharing whose impact is cumulative. In either case, the same body of techniques are used to identify where credentials are being shared in the first place, for example when access to a service is regularly gained from two or more distinct locations, rather than from multiple devices that appear to be owned by the same account holder.

Synamedia’s main slant is to target those subscribers who might be willing to pay more. This is not entirely new, given that the major SVoD providers for example have been aware that their credentials have been shared regularly for some years and have taken modest steps to monetize this.

Synamedia CEO Yves Padrines said, “At a time of accelerated evolution in the pay-TV industry, this investment is a fantastic endorsement of our product vision, R&D roadmap and service portfolio from Sky.”

In November, shortly after Synamedia officially opened its doors for business, private equity firm Vector Capital injected a $100 million second lien term loan into the company to support Permira Funds’ purchase of the assets from Cisco.

We tend to avoid commenting on company hires unless significant, which the recruitment of ex-CEO of Envivio Julien Signes by Synamedia this week certainly is. Signes pioneered the encoding business before Elemental came along and the vendor’s subsequent acquisition by Ericsson, so he will be an invaluable asset, serving as SVP and GM of the video processing division.

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