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Entropic Buys Into Video Transcoding

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner

Entropic Communications Inc. (Nasdaq: ENTR) will no longer live on Multimedia over Coax Alliance (MoCA) alone. The chip-maker is expanding its horizons through a US$10 million investment in Zenverge Inc. , a six-year-old company that specializes in video transcoding silicon.

Entropic is the lead investor in a $20.5 million Series D round in Zenverge announced Monday. Entropic President and CEO Patrick Henry has also been appointed to the Zenverge board.

In addition to giving Entropic an undisclosed stake in privately held Zenverge, the money will go toward the development of products aimed at MSOs and other service providers that convert incoming video signals into formats that can be displayed on PCs, tablets and smartphones that are within reach of a home's Wi-Fi network -- akin to what a Slingbox does today, but without the out-of-home access element.

The companies initially will focus on a video-transcoding "sidecar" product that will connect to set-top boxes. Future implementations will be baked into network-attached storage (NAS) devices and set-tops or video gateways, says Vinay Gokhale, Entropic's SVP of marketing and business development.

Entropic isn't saying when the sidecar will be launched (Entropic and Zenverge are working on deals with OEM partners), but the resulting device will connect to set-tops using a backbone based on MoCA 2.0, a new version of the coax-based home networking platform that supports speeds up to 800 Mbit/s.

The Slingbox is a cousin to what Entropic and Zenverge have in mind, but another close relative is Televation, a video-transcoding device that Motorola Mobility LLC developed for Comcast Corp. (Nasdaq: CMCSA, CMCSK). That product, announced in June, also uses Entropic MoCA silicon, but is matched up with a video transcoding processor from ViXS Systems Inc. DirecTV Group Inc. (NYSE: DTV)'s upcoming Nomad product, which also uses Entropic and ViXS chips, will let customers transfer DVR-recorded content to mobile devices. (See Moto, Comcast Team on In-Home TV Streamer .)

Entropic likes Zenverge's ability to convert multiple streams concurrently (Zenverge claims that its media processor can transcode up to four independent hi-def streams or 16 standard-def streams at the same time), but Gokhale says his company will "work with ViXs in other ways as [opportunities] arise."

Why this matters
The deal signals Entropic's move into video transcoding and represents its first significant investment in something other than MoCA, a market in which it's leading the way with more than 50 million chipsets shipped. (Broadcom Corp. (Nasdaq: BRCM) is its primary MoCA competitor, but is more focused on SoCs for set-tops and gateways.)

The investment also firms up Entropic's connection with Zenverge, extending a product partnership that the companies announced in June.

For Zenverge, its work with Entropic will help extend its video transcoding tech to major service providers, including Verizon Communications Inc. (NYSE: VZ) and DirecTV, that use Entropic's silicon. Motorola Ventures, another company with ties to big MSOs, participated in Zenverge's $30 million C round in early 2010.

For more
Read more about MoCA and MSO interest in piping live channels to tablets and other mobile devices over home networks.

— Jeff Baumgartner, Site Editor, Light Reading Cable

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User Rank: Light Beer
12/5/2012 | 4:52:44 PM
re: Entropic Buys Into Video Transcoding

Apart from Entropic's move, it should be interesting to see how the ViXS and Zenverge competition plays out.

Jeff Baumgartner
Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 4:52:40 PM
re: Entropic Buys Into Video Transcoding

Broadcom confirmed that it's still selling its encoder and transcoder for cable boxes, the BCM7043, but acknowledged that newer designs integrate that technology. JB



Jeff Baumgartner
Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 4:52:40 PM
re: Entropic Buys Into Video Transcoding

Vinay, as you might expect, was pretty diplomatic about that, noting that it's the nature of the silicon industy for companies to work on some projects together while competing on others.  But I'd like to know who else is in the running here. Broadcom may in fact still be selling transcoding chips as a one-off option in addition to the SoC approach; I'm checking to see if that's still the case. JB




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