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26 May 2022

Synamedia in recommendations snatch and grab for Utelly

The modular Synamedia Go product suite has been buffed up this week, following the acquisition of Utelly’s recommendation prowess. No price has been given for the ten-person team, but the UK firm was apparently such a good fit for the new SaaS approach that the deal was signed. Faultline talked to Scott Kewley, Synamedia’s VP Commercial Product Management, to learn more.

Utelly provides customers with a ‘content discovery platform,’ which handles metadata aggregation, search and recommendations, and content promotion. Scanning multiple metadata sources, including Gracenote, TiVo, IMDb, and Netflix, and using some AI-based tools, Utelly claims the system boosts ARPU, improves net promoter scores, and increases customer retention.

Faultline did wonder why a firm as well renowned and capable as Synamedia had not already developed this sort of aggregation capability? Kewley said that while Synamedia is investing in lots of areas, it cannot do everything. “We wanted to go fast, and so the decision was around speed. Of course, we could have built this, we have hundreds of engineers after all, but the timing was perfect.”

There was interest from other parties in acquiring Utelly, said Kewley, who explained that he first ran into the firm when working at TV Player, around four years back. Since joining Synamedia, the launch of Synamedia Go has taken up a significant chunk of time for Kewley, who said that content aggregation has become a major focus.

“All of our customers, without exception, are struggling with this problem,” said Kewley. “When we started talking about content aggregation, the Synamedia capability only went so far. So then, it was a question of investing into the problem, embracing a partnership, or an acquisition.”

This led to a fortuitous meeting with Romain Eude, Utelly’s founder and CEO, and this time around, a deal made sense. Kewley said that Synamedia is used to building things itself, and so the acquisition is a bit unusual. However, customer PoCs have proven very positive, and Synamedia was drawn in by the synergies with its advertising strategy.

Kewley clarified that there was not much overlap between the two companies’ customer bases, when asked whether this was a deal to snap up a rival. Kewley’s view is that Utelly operates in an area Synamedia wants to expand into, hurrying the company into acquisition ahead of expectation that rivals might make a similar move for Utelly.

Synamedia has not yet decided on the branding, but Kewley said the business will be run as a unit within the Synamedia organization. Kewley stressed that Utelly will firmly underpin the Go.Aggregate module of Synamedia Go.

“They are a very lean team, and that is what is amazing about them – it’s a great product with a small team. We should bring a sales and marketing capability that they don’t have to the table,” said Kewley, adding that Utelly is profitable and that this was far from a stress-sale for a start-up.

As for the overarching strategy, Kewley said that video services are going through a number of challenges – and this is where the content aggregation and discovery opportunity is most clear. “With content moving from old distribution channels into apps, and the subscription model coming under more pressure, and the growth of ad-funded rivals, this is creating a major user experience problem – when all those services are put together into a bucket.”

“The content owners want to have good monetization opportunities, so this is about seamless content discovery and performance measurement – so you can understand what content works. Our platform-play for selling ads across both old broadcast and new digital is important, and solved by the Synamedia Go module approach,” said Kewley. Being seen as a futureproof platform is key to this strategy, noted Kewley, adding that the market has only been solving pieces of the overall problem.

The conversation moved into more speculative territory, on this point. Faultline has postulated that consumers might quickly move on from the concept of a rolling SVoD subscription – which largely evolved as a direct equivalent to the fixed-term contracts and monthly payments that were the norm in pay TV.

Market saturation, price increases, and the impact of inflation might push consumers toward fewer simultaneous subscriptions, with the acceptance that this would result in a higher fee for the service. This is where content recommendations come in, as a now-$30 a month SVoD service stands to gain a lot more from retaining that customer for longer. Instead of hopping between three or four services throughout the year, the service that holds a customer for another month or two stands to swell its ARPU.

But such a dynamic stands in opposition to the concept of content aggregation. The utopian vision of having all the best content on a unified homescreen accessible with just one click is anathema to an islanded world reliant on walled gardens. In the aggregation world, the SVoD services need to be as cheap as possible, so that they are always included in those aggregated views – especially as advertising-based rivals begin to challenge for viewing time.

Kewley recalled his time at Virgin Media, when the UK cableco became the first operator to sign a Netflix deal for its set tops. Here, there were significant rights negotiations for the positions of the apps within the homescreen, with the positions getting much cheaper as more clicks were necessary to open the apps.

In that world, Kewley said, the work of discovering content was placed on the consumer – reliant on their own research or word of mouth to know what to look for. With aggregated UIs, the onus is now on the content owners to put their best foot forward, to ensure they become a default choice for consumers. However, warned Kewley, with bundling deals being struck, there is a risk that the whole model could flip back to the old ways of pay TV.