Mobile World Congress of all places played host to our long overdue catch up with Technicolor this week, gaining an unexpectedly detailed insight into the company’s roadmap. The long-term plan reads more like a suicide note than a masterplan at first, although Luis Martinez-Amago, President of Technicolor’s Connected Home division, did a decent job of convincing us otherwise.
We say unexpected, given that our more recent coverage of Technicolor has been reduced to the gradual dismantling of a vendor which still to this day has some fundamentally important technologies.
Martinez-Amago was quick to discredit the rumored attempts by Technicolor to sell off its CPE business, which quickly prompted conclusions that the unit was unsellable and therefore irrecoverable. “I was brought in 3 years ago to drive an operational business. Operational and patents are two contrasting businesses which clash (hence the sale of patents and R&I assets to InterDigital), and the CPE sector is a big volume, low margin business, which is why I decided to limit deployments to the top 50 service providers globally only,” said Martinez-Amago.
But surely that means Technicolor has terminated countless contracts, some of which we are sure most vendors would bite its arm off for?
“Correct,” he replied, “we used to serve 140 or 150 customers and now we are limited to the top 50. We have cut ties with quite a few but we have streamlined the business and are set to achieve 40% cost savings without impacting revenues. People say I’m nuts for turning down these deals.”
But there may be method in his madness. Martinez-Amago has streamlined the Technicolor business at a critical stage in its life. So what comes after the 3 year plan? – streamlining once again to the top 25 service providers? “That’s not how it will work. We will continue to serve the top 50 over the next decade. We want to be the last man standing.”
Despite the confidence in his 3 year plan (internally called project Dolphin), there’s little doubt Technicolor will look rather different in 10 years’ time and whether it continues to deliver CPE to operators, currently as the number 2 in the market behind Arris, is open for debate. The video side of the connected home business might be built entirely on Android TV in a few years, while it’s also feasible that Technicolor could, as we have suggested before, become a pure Visual Effects (VFX) business in several years’ time.
InterDigital – which is about to close a deal for Technicolor’s Research & Innovation (R&I) business – also weighed in with its visions for the video market, bragging to Faultline Online Reporter that it can run it better than Technicolor and this sentiment was something the two companies agreed upon. What InterDigital might not have been aware of is that Technicolor had planned to sell both its patent licensing and R&I business together from the outset, but decided to hang on the latter to honor certain ongoing projects.
“We are still learning the video business, but we see our three markets of wireless, video and IoT converging over the coming years, putting us in an excellent position,” said Patrick Van De Wille, InterDigital’s Chief Communications Officer. Van De Wille was not budging when pressed about specific projects to come from its new R&I unit, now boasting 400 engineers.
Moving on, Android TV was again a hot topic at MWC and Technicolor is now claiming a 75% win rate in deployments. “The age of companies having their own middleware is over. They will either choose Android TV or embrace a syndication project like Comcast with X1,” said Martinez-Amago. However, he stood firm on one point, projecting that none of the tier 1 US operators will ever roll out Android TV. It’s a shame that AT&T has already said publicly that it will.
We disagree with this outlook, expecting a major US Android TV operator tier deployment before 2021, so Faultline Online Reporter put this same question to several more vendors during our trip and unsurprisingly every single one agreed that a major US operator will cave in the coming years, albeit with varying estimates on time frames. The most confident answer came from UK vendor Massive Interactive, fresh from its takeover by Deltatre, as CEO Chip Canter guaranteed us we will see a major US Android TV announcement by next year, strongly suggesting the UX company has a project in the works, although nothing more was said on this matter.
Now billing itself as “the world’s largest independent OTT technology provider” (we established it means in terms of number of customers), an initially relaxed Canter soon saw red when we mentioned the dirty word commoditization, which is rife in OTT, from ingest and packaging right down to billing; in many cases a direct side effect of consolidation. He vehemently defended Massive’s business, saying commoditization in the UX space was not an inevitability of the recent takeover, reeling off figures like expecting a 20% head count growth by the end of next year.
We were assured the Massive brand will live on and when it was suggested that nipping and tucking of the company’s product line was another inevitability (given that Deltatre is largely private equity owned), Canter promised that streamlining was not the plan. The little detail he could provide involved integrating the Massive front end capabilities into the Deltatre Diva platform which has become a staple for many broadcasters in the live sports space, Canter said, one example being Discovery’s Golf TV. “You’ll start to see the threading at NAB and then more clearly come IBC,” he said.