Video services

ActiveVideo Buys Into European iTV

ActiveVideo has agreed to snap up Netherlands-based firm Avinity Systems BV , hoping to stake a claim, however small, on the European interactive television sector. (See ActiveVideo Buys Avinity.)

Under the deal, ActiveVideo would absorb the entire Avinity team (between 10 and 20 employees) extending its employee base past 100. ActiveVideo would close its U.K. office, moving its European operations to Avinity's headquarters in Hilversum.

Both companies deliver interactive services and applications to set-tops, or even thin-client boxes, by placing most of the processing in the MSO's headend. In this cloud-like approach, the applications and graphics are rendered in the network, and streamed to the set-top, or another consumer-side device, via a compressed video stream.

Applications they have in mind include video-on-demand navigation, Web-sourced video, interactive advertising, and gaming.

It's not as if ActiveVideo hasn't tried to penetrate the European cable market before. It opened a U.K. sales office in 2003, back when the company was still known as ICTV Inc. However, the firm has never had more than two full-time people dedicated to Europe. (See ICTV Becomes ActiveVideo.)

"We didn't feel we could do Europe… without a significant investment and presence. The way you sell to cable is to be in their face all the time, and we just couldn't do that," says ActiveVideo president and CEO Jeff Miller, speaking from the ANGA Cable Show in Cologne, Germany.

Avinity doesn't represent a huge presence, though. Founded in 2005, it's announced two deployments in its home country, with Tele2 and Reggefiber BV .

Avinity did hook up with Virgin Media Inc. (Nasdaq: VMED) in March at the Cable Congress show to demonstrate how new user interfaces, including those based on Flash, could be delivered to two-way set-top boxes using RenderCast.

But what Avinity needs -- and hopes to get from the merger -- is stature. Larger MSOs have been concerned about Avinity's size and its lack of a multimillion set-top deployment, says company director and co-founder Ronald Brockmann. (He's slated to become managing director for ActiveVideo Europe.)

Miller says ActiveVideo is on track to have its platform in front of 5 million homes by the end of 2009. These days, it has about 1.4 million homes enabled, thanks to deployments with PCCW Ltd. (NYSE: PCW; Hong Kong: 0008) (ActiveVideo's largest installation so far), the Oceanic division of Time Warner Cable Inc. (NYSE: TWC) in Hawaii, and Grande Communications . (See TWC Activates ActiveVideo.)

Avinity's RenderCast platform has been tailored for the European cable and IPTV sector by adding set-top box software from partners such as OpenTV Corp. (Nasdaq: OPTV) and systems that use Multimedia Home Platform (MHP), a middleware component that's now part of the U.S.-focused tru2way platform.

Avinity is also more familiar than ActiveVideo with H.264/MPEG-4, and has experience with the CI Plus security interface.

— Jeff Baumgartner, Site Editor, Cable Digital News

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