Video software

Ericsson & Google Do TV Together

What do Ericsson and Google have in common? They both want a bigger stake in the TV software market. And if neither has what it takes to go it alone, they're hoping that together they can improve their odds.

Ericsson AB (Nasdaq: ERIC) and Google (Nasdaq: GOOG) have announced today that they're pairing the former's MediaFirst television software platform with the latter's Android TV operating system. The goal of the partnership is to create new set-top options for service providers with software that merges pay-TV and over-the-top content. (See Ericsson, Google Team on Pay-TV.)

As explained by the two companies, service providers will now be able to partner with Android device manufacturers to layer the MediaFirst platform on top of the Android OS. The combination will allow service providers to deliver both "new hardware-based functionality" to their subscribers and integrated OTT programming. There are no details on what that new hardware functionality might look like, but presumably the companies are referring to innovative video recording and whole-home networking features among others.

At a network level, the integration of MediaFirst into Android devices will also make available cloud-based 4K Ultra HD TV streaming, variations of video-on-demand services and cloud DVR.

For service providers that want a turnkey set-top option, Ericsson plans to create pre-integrated solutions with Android devices that support "hybrid configurations for satellite, cable, terrestrial, and fixed and mobile broadband TV."

Notably, Ericsson and Google don't mention the retail market in announcing their new partnership, but if the Federal Communications Commission (FCC) succeeds in opening up access to pay-TV apps, the collaboration could also lead to direct-to-consumer products that include pay-TV services integrated with the overall user experience supplied by Ericsson, Google and any chosen hardware partner. (See The FCC & TV Apps: It's Complicated.)

Want to know more about video and TV market trends? Check out our dedicated video services content channel here on Light Reading.

Back on the service provider side, any joint Ericsson/Google product still faces plenty of competition in the pay-TV market. Rivals include TiVo Inc. (Nasdaq: TIVO), Espial Group Inc. , and to some extent Comcast Corp. (Nasdaq: CMCSA, CMCSK) through that company's licensing of the X1 platform. (See Meet the New TiVo, Espial to Acquire Arris TV Software Platform and Comcast Boasts Global Plans for X1.)

Ericsson so far has had limited traction with its MediaFirst platform, although it undoubtedly hopes the tie-up with Google will improve matters. MediaFirst was built by the same team that built Mediaroom, a TV service delivery platform that Ericsson acquired from Microsoft Corp. (Nasdaq: MSFT) back in 2013. MediaFirst launched in 2015 and so far Telus Corp. (NYSE: TU; Toronto: T) is the only customer known to be deploying it.

In related news, Ericsson just announced that it has now integrated MediaFirst with the cable set-top software stack known as the Reference Design Kit (RDK). (See Ericsson MediaFirst Move Boosts Pay-TV Cred.)

For Google, the deal with Ericsson reinforces the company's clear desire to sell to the service provider market. Google has also said that it's targeting operator customers with its OnHub wireless router. So far, Frontier Communications Corp. (NYSE: FTR) has signed on to offer OnHub to subscribers. (See Google Is Promoting OnHub to ISPs.)

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

Joe Stanganelli 9/13/2016 | 5:11:37 AM
Re: Revenue This Silicon Valley tidbit remains just as relevant as ever:

Mitch Wagner 9/11/2016 | 6:39:19 PM
Re: Revenue Social media business model: Lose money on every transaction, make it up on volume. 
Joe Stanganelli 9/11/2016 | 2:32:23 PM
Re: Revenue @msilbey: Sounds like this is one way of many that Google is looking to take on Amazon, then (which also seeks the same thing between Prime, Echo, Amazon Pantry/Amazon Fresh, and more).
Joe Stanganelli 9/11/2016 | 2:31:10 PM
Re: Revenue I think one of the standard advanced business models in Silicon Valley tends to be: "Steal users from everyone else; then figure out actual monetization later."

Which is at least better than: "Do whatever seems cool, then get acquired before having to figure out monetization."
msilbey 9/8/2016 | 3:38:45 PM
Re: Revenue Ericsson and Google would be working with a third-party hardware manufacturer, so any revenue would come from software. If I had to guess, I'd guess that Ericsson's platform gets sold on a licensing basis, and that Google takes a cut from any Android apps that are bought in addition. (With Google maybe also taking a licensing cut depending on how much it has to do to support the Ericsson platform?)

Google's goal is to control the hub in the home, so ultimately I imagine it's testing the waters for a new or updated Android app store designed around the living room TV.
msilbey 9/8/2016 | 3:33:18 PM
Re: The content piece? Google wants its shot at controlling the hub in the home, whatever that hub may be. It's not going to happen at Comcast, but many other operators do want someone else to be in charge of the software development piece so they can offer better services that combine both pay-TV and OTT. 

Trouble is, I don't see Google being the choice that operators - at least in the US - opt for. TiVo's got a lot of traction in this space, and Espial's not in bad shape either. Google might be able to drum up consumer support if it had a retail play, but that would assume FCC regulations change in Google's favor, and that Google/Ericsson can successfully manage a partnership with a third-party device maker in the retail channel. Lot of "ifs" there.  
cnwedit 9/8/2016 | 2:26:50 PM
The content piece? So if they are creating or have created a device that lets me accsss all my pay-TV content and all my streaming video subscriptions as well, that's great for me as a consumer. 

But is it great for the pay-TV providers? Will they buy that? 

Would you ever see Google being a content aggregator?

Mitch Wagner 9/8/2016 | 1:31:10 PM
Revenue It will be interesting to see what the revenue model for this is. Does Ericsson hope to derive revenue from software or hardware? 

Likewise, does Google hope to make money directly on the software, or will it give the software away and hope to make money on ads later, as it does with Android?
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