Zenterio decimated by sluggish Android TV push, major overhaul underway

While vendors wax lyrical about winning multiple deals on the back of Android TV operator tier, few will admit to the disruptive technology eating into existing deployments. It was refreshing then for Zenterio, the Swedish TV platform developer, to confess that Android TV has taken a sizable chunk out of the company – and oh boy does it wish it wasn’t so late to the party.

Red flags were raised a few weeks back when it came to the attention of Faultline Online Reporter that Zenterio had carried out a major executive reshuffle. Zenterio had to wait until its Q1 2019 results were published before jumping on the phone to us, by which time it had become abundantly apparent why a serious roadmap restructure was required – as first quarter sales tumbled 72.3% year on year to $1.56 million. This is the same Zenterio which to this day remains a firm favorite at one of the world’s largest operator powerhouses in Deutsche Telekom – so what caused the fairytale to take a dark turn?

A resolutely calm Rutger Reman, Zenterio’s CCO & Head of Business Development, spoke to Faultline Online Reporter this week and did his utmost to assure us a plan is in place to steady the ship, with the Zenterio workforce having every faith in new CEO Kristian Toivo, moving up from COO recently to replace long-term leader Jörgen Nilsson. Reman described a transformation from a systems integrator-type company in the set top world to a company more focused on bespoke software and a stringent product portfolio. We probed for details and cited Zenterio’s distinct lack of activity in Android TV operator tier. “Our Android TV ambitions began last year and until recently we haven’t won any deals. We admit there was not enough emphasis on this technology,” admitted Reman.

Clearly Zenterio missed the boat and should have channeled resources towards operator tier hard and fast when it had the chance, suggesting anyone getting into the game now stands little chance. “Perhaps it’s a blessing and a curse having bespoke products like ours. Some customers are willing to pay but others have gone with Android TV,” noted Reman. Rather concerningly, he admitted the recent executive reshuffle involved instating Zenterio’s first ever CTO. Perhaps this oversight was a contributing factor to Zenterio’s decline, although once again Reman hyped up the company’s first CTO as a long-term internal Zenterio employee with extensive system architecture experience. Zenterio’s debut CTO clearly has as hard job considering the company hasn’t made a product announcement since IBC in September last year, winning just one deployment deal in the meantime.

It’s all well and good playing captain hindsight and we are ineffably more interested in what the future holds. Zenterio claims it spent a significant sum investing in product development during the last quarter which dented its overall financial position. Designed for faster delivery and to prepare the vendor for a future focusing on product sales and services, Zenterio expects to attract new customers in the second half of this year. In addition, the company recently reestablished its external consulting business – involving the assignment of 10 engineers to third party technology companies in Sweden.

So, one year on since kicking off its Android TV operator tier ambitions, Zenterio is beginning to see progress and recently picked up two operator deployment deals – one large and one medium – which Reman hopes to shout about from the rooftops very soon.

We tested the waters and name dropped Deutsche Telekom as the prime suspect for this mystery large operator, albeit tongue-in-cheek considering the amount of time and money the German giant has spent building its Entertain TV platform. “I can’t speak for Deutsche Telekom as a group, but recently it wanted us to integrate Netflix, Amazon Prime Video, YouTube and more into its pay TV offering, so we know the demand is there for OTT services. I can tell you that the large operator has over 1 million Linux set tops deployed in the field,” Reman teased.

As we touched on earlier, the new entertainment platform Zenterio TV, powered by Zenterio Cloud, launched nine months ago to little fanfare. This is all about providing tools for content aggregators, in Zenterio’s case adding UI and cloud components, complemented by business KPIs via statistical analysis. The interesting element is that operators can compare user data with data from rival operators, based on Zenterio’s experience working with various operators, rather than being based on actual operator data. Given how this piqued our interest upon launch, we expected operators to be drawn to Zenterio TV too, but the allure of Android TV deployments has clearly proven too tempting and Zenterio has suffered as a result.

As for the full OTT version of EntertainTV, Reman said Zenterio still hasn’t landed this part of the DT contract – which is strange considering the company told us feedback from Deutsche Telekom about StartTV was positive despite the service shutting down prematurely this summer.

Zenterio still holds its head high as the incumbent OS and middleware provider at Deutsche Telekom, but having recently finalized the 4-year product program for the operator, the longevity of its contract there hangs in the balance.