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Vidiom Founders Launch iTV Startup

Jeff Baumgartner
10/2/2008
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The founders of Vidiom Systems Inc. have bought pieces of that company back from Advanced Digital Broadcast Holdings SA (Swiss: ADBN) to spawn a new interactive television (ITV) services and software firm called enableTV Inc. that aims to play a key role in the growth and development of the tru2way market.

Under the deal, financial terms of which remain undisclosed, enableTV has picked up the engineering and testing service contracts from Vidiom and several employees working on those projects, says Timothy Wahlers, enableTV's president and CEO and a Vidiom founder, confirming a report this week by Interactive TV Today.

enableTV has also bought Vidiom's Vision Workbench application development toolset; the vCert automated testing suite; and a "mini-guide" product called TV Dashboard. Also, the company bought the license to sell and distribute an OpenCable Application Platform (OCAP) stack -- the middleware component of the tru2way platform -- that Vidiom developed for OCAP Developers LLC, a joint venture of Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Time Warner Cable Inc. (NYSE: TWC).

Osmosys SA , an ADB subsidiary, has its own OCAP stack.

It's in that category, the OCAP stack, that enableTV will face some stiff competition, despite the company's connection to the two largest U.S. cable MSOs. In addition to Osmosys, other vendors with tru2way middleware on the menu include Alticast and Vividlogic . Panasonic Corp. (NYSE: PC) and Samsung Electronics Co. Ltd. (Korea: SEC) have also developed in-house OCAP implementations for their respective tru2way televisions.

"We're going to get enormously competitive on price in that [OCAP stack] marketplace," Wahlers insists, noting that cable's adoption of tru2way is on the verge of achieving some serious scale.

The deployment goals outlined in the tru2way "memorandum of understanding" negotiated by Sony Corp. (NYSE: SNE) and the six largest incumbent cable MSOs earlier this year all but assure that tru2way will be supported fairly broadly by next July. (See Sony Supports tru2way, Revealed: The Tru2way MOU, More Firms Go the Way of Tru2way, tru2Way Tallies Two More, and EchoStar Inks Tru2way Accord .)

Another asset: Solekai Systems
enableTV also has a deal on the table to purchase the cable-focused business of Solekai Systems Corp. , which runs a test lab in Boulder, Colo. In addition to a mini-headend simulator called DV-TIDE, Solekai recently developed a test tool for a new CableLabs -specified Tuning Adapter that enables inherently one-way CableCARD-based digital TVs and some stand-alone TiVo Inc. (Nasdaq: TIVO) digital video recorders (DVRs) to access channels an operator delivers using switched digital video (SDV). (See CableLabs Issues Tuning Resolver Specs , Solekai Issues SDV Test Tool, and CableLabs Stamps SDV Tuning Adapters .)

"I saw an opportunity in the service side," Wahlers says of the asset purchases and the creation of his new company. "I still saw an important role that Vidiom could play in contributing to the ecosystem of interactive TV, particularly in the cable market."

Although some may view development tools and training as the "butt-end" of the iTV business, "it's something that we've embraced and chased because we thought it was so critical," notes Wahlers, who founded Vidiom with Walden Miller in 1997.

enableTV, which is getting off the ground with about 60 employees, is in the process of moving its headquarters to Solekai's Boulder-based facility. enableTV also operates an office in Portland, Ore., home to about 18 development engineers.

Wahlers and Walden are funding enableTV privately, but the company has tapped Stage 1 Ventures LLC to help it raise more capital for the development of new products, including some tied to targeted/addressable advertising. enableTV also has plans to bring its iTV service and integration expertise to small- and mid-sized cable operators and to expand into the IPTV and hospitality entertainment sectors and to international digital TV markets.

Although cable's interactive television ambitions have been plagued by fits and starts, Wahlers, who has witnessed most of them during his 22-year career in iTV, believes they are close to hitting their stride.

"Five years ago we [Vidiom] resisted the idea of venture funding because of the expectation of a two- to three-year turnaround. I knew it wasn't going to happen at the time. Now I'm saying the opposite," Wahlers notes. "Now I'm looking out 18-to-24 months and I'm saying now is the time to invest in products and technology in this space."

Wahlers would not disclose revenue targets for enableTV, but says the company "will be profitable" at its present size.

What's up with ADB?
ADB purchased Vidiom in early 2006 to help kick-start its cable strategy for North America.

ADB did not specifically spell out why it sold off parts of Vidiom to its original founders, but, in August, the company did note in its first half 2008 financial report that it would continue to invest in U.S. cable and "develop a complete product and services offering" for that market, "targeting its self-sustainability and profitability." The asset sale appears to show that ADB is simply starting to implement that plan.

Although several elements of Vidiom are now in the hands of enableTV, ADB will still handle application testing and maintain its link to HITS Advanced Interactive Services (AxIS), a tru2way platform tailored to small- and mid-sized operators that involves the Comcast Media Center (CMC) and a handful of other partners. (See Vidiom, CMC Forge Deal, Buckeye First to Test 'HITS AxIS' , and CMC Plays Host to iTV.)

The remaining portion of Vidiom is representing Osmosys products, including its OCAP stack, in the U.S. ADB, Vidiom's parent, has built a CableLabs-certified tru2way set-top for the domestic cable market that's outfitted with the Osmosys OCAP implementation. (See ADB Scores tru2way Certification and ADB Aims for US Set-Top Market .)

— Jeff Baumgartner, Site Editor, Cable Digital News

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