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Startup Company Profile #11: RBG Networks

RGB Networks is gunning to take a big bite out of the video processing segment, taking on BigBand and incumbent Terayon. Not coincidentally, RGB was started by the founder of Imedia, the video processing up-start acquired by Terayon in 1999 for $100 million. That Imedia solution is at the heart of Terayon's still-popular CherryPicker product line.

RGB (which stands for red, green, and blue, the three basic colors of video) was founded five years ago. In 2003. the company received an undisclosed amount of first-round funding from venture capital firms Kleiner Perkins Caufield & Byers and Accel Partners. Follow-up funding totals $32 million, including a series C round in June that valued RGB at $110 million. Based in San Mateo, Calif., RGB now counts over 50 employees, mostly engineers.

The company's flagship product is the Simulcast Edge Processor (SEP). Launched in August 2005, the SEP-48 is a slim 1RU "pizza box" that can MPEG decode, NTSC modulate and upconvert multiple video streams. RGB founder Adam Tom says the box is 24 times denser than competitive offerings, supporting over 80 TV channels in two rack units. With Motorola as a distribution partner, RGB shipped more than 400 units in the first six months, generating $9 million in sales. The SEP-48 is now delivering digital TV services to some 4 million U.S. cable customers through deployments with several big, undisclosed MSOs.

RGB's Broadcast Network Processor (BNP) is a video processing solution for grooming, statistical multiplexing, translating, and digital program insertion that is able to support a whopping 512 streams in a single rack unit. Interestingly, both the SEP and BNP are based on the same FPGA-programmable hardware and differ only through software. RGB is also readying a universal edge QAM for release by the end of 2006 that will support 128 QAMs per RU and be M-CMTS compliant.

With this product set, RGB may also stand for Red-hot Gorilla Bait. Its video technology will be very attractive to infrastructure giants eyeing cable.

    Start-up: RGB Networks
    Innovation factor: 9 (out of 10)
    Likely Acquirers: Motorola
    Handicap: 3-1 odds on Motorola, already a key RGB reseller.
- Michael Harris, Chief Analyst, Cable Digital News
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