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Cisco looks to kick its cross-platform video strategy into another gear with purchase of media publishing firm ExtendMedia

Cisco Buys Into TV Everywhere (Again)

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
8/26/2010
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Cisco Systems Inc. (Nasdaq: CSCO) amped up its TV Everywhere strategy Thursday with a deal to buy ExtendMedia Inc. , a company that handles video and media management and publishing for Tier 1 carriers such as AT&T Inc. (NYSE: T) and BCE Inc. (Bell Canada) (NYSE/Toronto: BCE). (See Cisco Buying ExtendMedia.)

Cisco intends to integrate ExtendMedia's content management systems into its own IP video hardware and software, targeting carriers that want to extend video services to myriad devices, including TVs, PCs, smartphones, and tablets such as the popular iPad.

"We're obviously seeing a transition to IP video architectures in the marketplace, with the service providers looking to deliver on the increasing consumer expectation to be able to access video wherever they are, on whichever device they want," says Kip Compton, who leads the video and content platforms unit of the Cisco Service Provider Video Technology Group (SPVTG).

The buy of Newton, Mass.-based, privately held ExtendMedia is expected to close by the end of the year. Cisco would add the company to the SPVTG, a unit that's responsible for set-top boxes, video encoders, content distribution systems (CDSs), and video-on-demand (VoD) products. It's the second big move for SPVTG recently, as Cisco hired former Microsoft Corp. (Nasdaq: MSFT) exec Enrique Rodriguez in May to lead the unit. (See Former Microsoft Exec Joins Cisco's Video Group .)

Cisco intends to keep ExtendMedia focused on service providers and expects to hire nearly all 52 employees. However, it's not yet saying which executives, such as founder and president Keith Kocho, would stick around.

The deal arrives as operators such as Comcast Corp. (Nasdaq: CMCSA, CMCSK), Verizon Communications Inc. (NYSE: VZ), and Dish Network LLC (Nasdaq: DISH) ramp up their TV Everywhere services, and cable operators begin to pursue IP video strategies. (See Dish: TV Everywhere Site Is Portal to Growth .)

The acquisition would put Cisco in more direct competition with a range of publishers that have TVE aspirations, including Brightcove Inc. ; Limelight Networks Inc. (Nasdaq: LLNW), which recently expanded into the game with its purchase of Delve Networks; and Comcast-owned thePlatform Inc. (See Limelight Takes Aim at thePlatform, Brightcove .)

thePlatform issued a statement on the acquisition, noting that it has been predicting further consolidation in the white-label online video platform market, because serving the premium video market requires scale and resources -- which is why thePlatform got acquired by Comcast in 2006.

The statement also notes that thePlatform managed to maintain its independence. Aside from Comcast, its customers include Cox Communications Inc. , Cablevision Systems Corp. (NYSE: CVC), Time Warner Cable Inc. (NYSE: TWC), and Rogers Communications Inc. (Toronto: RCI).

The ExtendMedia purchase would appear to rub up against Cisco's 2009 investment in Digitalsmiths Corp. , another company that handles provides multi-platform indexing and publishing. (See Cisco Invests in Digitalsmiths .)

But Compton says ExtendMedia (once known as Digital Renaissance) and Digitalsmiths operate in different markets, with ExtendMedia targeted to SPs and the other more focused on other media company types.

Cisco isn't saying whether ExtendMedia, which was founded in 1991 and has raised about $33 million, is profitable.

— Jeff Baumgartner, Site Editor, Light Reading Cable

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ycurrent
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ycurrent,
User Rank: Light Beer
12/5/2012 | 4:25:24 PM
re: Cisco Buys Into TV Everywhere (Again)


as content goes multi-screen, publishing and management become a feature of e2e IP video delivery/CDNs; content management does not need resource scale, but content delivery and support certainly does.

Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 4:25:24 PM
re: Cisco Buys Into TV Everywhere (Again)


Based on a report, it looks like investors are getting back what they put in, and not much more. Multichannel News, citing someone familiar with the deal, says Cisco is paying $30 million to $40 million.  ExtendMedia has raised about $33 million during its history. Cisco isn't releasing the financials, but expect them to show up in a future SEC filing. JB

Pete Baldwin
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Pete Baldwin,
User Rank: Light Beer
12/5/2012 | 4:25:20 PM
re: Cisco Buys Into TV Everywhere (Again)


Because the first thing you thought when you saw this announcement was, "I wonder what Juniper thinks about this..."


Juniper has sent a statement pointing out that, in their opinion, service providers want the freedom to pick gear from multiple vendors, "not a siloed stack of capabilities that lock them into a single vendor."


Maybe they wanted to jog our memories about the VXA Media Flow Engine appliances announced this week.

quicktime
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quicktime,
User Rank: Light Beer
12/5/2012 | 4:25:16 PM
re: Cisco Buys Into TV Everywhere (Again)


Data Network vendors are evolving like tradition telecom network vendors and trying to provide end-to-end solution. Maybe service providers need multiple vendors to lower theirinvestment cost in the data deliving platform. But considering the complexity of today's network, end-to-end and managed service is a choice for them to push all new services to market as quick as possible.


 

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