Cisco Buys Into TV Everywhere (Again)

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