Streaming Media
When it comes to
mergers and acquisitions in the streaming industry and M&E marketplace in
2023 and an accounting of the year’s most consequential deals, it makes the
most sense to open at the close: Disney’s early-November announcement that it
would fully subsume Hulu into its empire with a buyout that completed an
acquisition initiated in pre-pandemic 2019.
article here
Disney Takes Full
Control of Hulu
By the end of the
year, the much-trailed merger of Disney+ with Hulu had gone ahead, with Disney
buying out Comcast’s 33% stake in the streamer for $8.6 billion. Disney has run
Hulu since 2019 when Comcast ceded its authority to Disney and effectively became
a silent partner.
Now it can go full
steam ahead on combining the pair into a super-app to better compete with Max
and Netflix in the U.S. Outside the U.S., Hulu programming has already been
bundled with Disney+.
As part of its Q3
2023 earnings results, Disney announced it would release the new app in beta
for bundle subscribers in December, with the official launch coming in spring
2024. “We remain on track to roll out a more unified one-app experience
domestically, making extensive general entertainment content available to
bundle subscribers via Disney+,” Disney CEO Bob Iger said during the earnings
call. “We expect that Hulu and Disney+ will result in increased engagement,
greater advertising opportunities, lower churn, and reduce customer acquisition
costs.”
The single-app
experience will be taken further, says Guy Bisson, executive director and
co-founder of Ampere, “As Disney transitions to a full DTC model for ESPN, it
will also launch a ‘full-Monty’ bundle of Hulu, Disney+, and ESPN—with ESPN
also remaining standalone as an option.”
Via Licensing and
MPEG LA Unite
In May, Via
Licensing and MPEG LA combined to form the Via Licensing Alliance (Via LA) and
establish the largest codec patent pool administrator in the industry. The
merger creates a “pool of pools” for audio and video, consisting of nearly
50,000 patents in 130-plus countries, with more than 500 patent holders and
10,000 licensees. Via LA is an independently managed subsidiary of Dolby Labs.
MPEG LA’s
achievements included launching the licensing program for MPEG-2, which even
nearly 30 years on is still being used to encode video. It also set up a pool
related to the Versatile Video Coding (VVC) standard. A number of VVC patents
are now under the authority of Via LA’s VVC Patent Portfolio Licence. Via
Licensing dates back more than 20 years. Its major achievement was establishing
the licensing pool for AAC.
The plan is to
consolidate dozens of patent pools covering a broad range of technologies, with
the aim of simplifying the licensing process. According to Heath Hoglund, Via
LA’s president, “Via LA combines the best capabilities in the licensing
industry to deliver efficient, transparent, and balanced intellectual property
solutions to thousands of partners around the world.” Affiliates of General
Electric, Philips, and Mitsubishi Electric will convert their partial ownership
in MPEG LA to partial ownership in Via LA.
That’s what the
press releases say. Of course, there’s a lot more to this story. The move may
be intended to deal a knockout blow to rival pool Access Advance, of which
General Electric, Dolby, Philips, and Mitsubishi Electric were founding
members. In December 2023,
Access Advance touted that Amazon, Dell, and Lenovo PC joined its HEVC program.
Access Advance also operates a VVC program, which Sony joined in December 2023.
Any VVC licensee will almost certainly have to take out a license from both
pools to avoid any infringement lawsuits.
HEVC Advance has
arguably held the balance of power in the patent pool game after nine
members of MPEG LA, including ETRI, the Korean Broadcasting System,
and NTT DOCOMO, joined forces with it in 2020.
It may be
that MPEG LA’s April 2023 settlement with Samsung—in a case that contested
patent payments due to Samsung—paved the way for the merger. In addition, two
other companies that left MPEG LA and contributed their patents to Access
Advance’s HEVC Advance pool (ETRI and SK Telecom) are suing MPEG LA over the
same issue in an action yet to be resolved at this writing.
Avid Goes Private
Avid, for decades
the leading brand with the biggest userbase in postproduction, removed itself
from Nasdaq in an all-cash acquisition by hedge fund Symphony Technology Group
(STG). The deal, which valued the company at $1.4 billion, was announced in August
and approved by Avid stockholders in November.
“By becoming a
private company, we believe Avid will be able to achieve the speed of
innovation, scale and performance required for us to continue leading the
industry forward,” said Jeff Rosica, Avid’s CEO and president. “Combined with
their significant operational and financial resources, STG brings deep
investment experience in the technology sector that will accelerate the
achievement of Avid’s strategic vision, building on the momentum of our
successful ongoing transformation achieved over the past several years.” Rosica
told The Hollywood Reporter he would retire in early 2024.
Avid was founded in
1987 and introduced Media Composer in 1989. In 1994, it acquired Digidesign,
the maker of Pro Tools. The company also develops tools for broadcast, storage,
and asset management. In September 2023, Avid introduced Ada, the brand for its
AI-driven technology.
In its Q2 results
released in August 2023, Avid grew revenue 11% to $108.5 million, but posted an
overall loss of $4.6 million for the quarter. During all of 2022, subscription
was the main driver of growth, with more than half a million paid subs to its
software, representing $150 million in revenue for the year.
EditShare Merges
With Shift Media
In September 2023,
EditShare merged with fellow Boston-area company Shift Media and will move
forward under the EditShare brand. EditShare products include EFS shared video
storage solutions and FLOW media asset management software. In 2022, the
company launched EditShare FLEX, a remote postproduction platform built on AWS.
Shift Media’s SaaS solutions include the MediaSilo collaboration tool and
industry screener platform Screeners.com.
Ramu Potarazu,
Shift Media’s CEO, now leads the combined company (EditShare CEO Conrad Clemson
left the business). The complementary products will aim to better address the
postproduction need to move from fixed facilities toward more flexible
environments.
“Sometimes you need
to be working in a full-service post house, but at other times that is just not
necessary,” Potarazu tells TV Tech. “Neither the editor nor the client needs to
commute into an expensive city-center location if remote working can deliver
the same level of performance and functionality. That means that the tech
platform supporting the workflows has to be more agile. Content will be stored
on premises or in the cloud. Proxies will be generated automatically at the
point of ingest. Secure connectivity will allow remote logins from anywhere in
the world to access just the relevant content. Simple distribution of review
copies for approval means that producers can see work in progress wherever they
are. The answer to all these challenges is not to make the same old workflows
work around additional connectivity: it is to find new, relevant ways of
working that deliver productivity bonuses alongside the convenience.”
ParkerGale Capital
and Marlin Equity Partners, previous backers of EditShare and Shift Media,
respectively, will remain as primary investors and board members of the
combined company.
Cisco Buys Splunk
Cisco purchased
cybersecurity company Splunk in September 2023 for $157 per share in cash,
representing approximately $28 billion in equity value. It was Cisco’s
largest-ever acquisition. Splunk develops tools for security information and
event management and for analyzing log files and other data. It also uses AI to
help companies minimize the risk of cybersecurity incidents.
“In today’s
hyperconnected world, data is everywhere, with every organization relying on it
to run their business and make mission-critical decisions every day. Factoring
in the acceleration and adoption of generative AI, expanding threat surfaces,
and multiple cloud environments, it creates a level of complexity that is
unlike anything organizations have faced. Organizations need a better way to
manage, protect, and unlock data’s true value and stay digitally resilient,”
Cisco said in a press release.
“Uniting with Cisco
represents the next phase of Splunk’s growth journey, accelerating our mission
to help organizations worldwide become more resilient, while delivering
immediate and compelling value to our shareholders,” said Gary Steele,
president and CEO of Splunk, who joined Cisco’s executive leadership team.
Evergent and Irdeto
Partner in Amsterdam
Irdeto’s September 2023 deal was a straightforward partnership rather than an M&A, this time with Evergent, a digital business customer management firm. The pair said the partnership would enable OTT streaming providers to bring innovative, custom use cases to market, taking advantage of the rapidly growing demand for subscription-based services.
According to
research from Statista quoted by Evergent, the global market for OTT video is
expected to grow over the next 5 years at a CAGR of 7.72%. “OTT streaming video
providers must compete for their position in this growing market by offering
unique, customer-friendly packages and experiences,” Evergent said.
Irdeto appealed to
those pay TV operators seeking to combine broadcast with OTT, arguing they can
use its cybersecurity solutions to rapidly deploy a hybrid (or pure OTT)
service on an Android TV or RDK set-top box together with Evergent’s customer
management tools. “No other solution offers the same breadth of functionality
and ease of use. We look forward to developing this partnership and providing
additional value to our customers in the months to come,” Irdeto CEO Doug
Lowther said in a press release.
In November 2023,
Evergent partnered with Axinom, developer of the Mosaic back-end video
streaming platform. Evergent founder and CEO Vijay Sajja remarked in a press
release, “Our new partnership with Axinom makes it significantly easier for OTT
companies to find the right solution for their technology backend and
monetization management needs. This partnership lowers the entry barriers for
companies to build or modernize their OTT services while scaling their
operations to new geographies and monetization models.”
Akamai Acquires
Select Lumen Technologies CDN Contracts
In October 2023,
Akamai acquired assets, including select CDN customer contracts, from Lumen
Technologies (formerly CenturyLink) for an undisclosed sum. Akamai
anticipates the transaction will net it $40–$50 million in revenue in 2024. To
put that in context, as Mary Lennighan does in a Telecoms article, Akamai
made $3.62 billion in revenue in 2022, and Lumen Technologies made $17.5
billion. “This is clearly not a huge deal for either party, but it does reflect
a time of change at both companies,” Lennighan notes.
This acquisition
marks the end of Lumen’s content delivery services business. Meanwhile, Akamai
is keen to build up its customer base. In August, it announced the acquisition
of select enterprise customer contracts from StackPath, with the latter also exiting
CDN operations. According to Lennighan, in that deal, Akamai picked up around
100 contracts worth $20 million in annual revenue. Just as in the Lumen
Technologies acquisition, there was no transfer of tech or personnel.
Microsoft Acquires
Activision Blizzard
Microsoft’s $68.7
billion acquisition of Activision Blizzard officially closed in October 2023,
21 months after it was first announced. This came after the U.K. regulator, the
Competition and Markets Authority (CMA), gave its approval to an amended version
of the deal, which will see Microsoft give up cloud-streaming rights for all
Activision Blizzard games outside the European Economic Area (EEA)—a
region that comprises the 27 European Union members plus Iceland,
Liechtenstein, and Norway—to French video game publisher Ubisoft for 15 years.
The CMA blocked the initial deal over concerns that it could harm competition
in cloud gaming in the U.K.
Microsoft will now
control games such as Call of Duty, World of Warcraft, and Candy
Crush. They will provide the firm with huge revenues, according to the BBC.
Microsoft is hopeful the takeover will boost demand for its Xbox console and
enable it to add more titles to Xbox Game Pass, its cloud-based subscription
service.
After 15 years,
Ubisoft will no longer hold the cloud gaming rights for Activision Blizzard
content in the EEA. The CMA believes the time span will see rivals become
established in the cloud gaming market and be more competitive.
The deal is
Microsoft’s largest acquisition ever, in excess of the $26 billion it paid for
LinkedIn in 2016. Microsoft is now the third-largest gaming company by revenue,
behind Tencent and Sony.
A report from
MIDiA Research suggests that the gaming industry is expected to hit more
than $300 billion in global revenue and reach around 3.8 billion active players
by 2030.
Amagi Adds Tellyo
Amagi, which
provides cloud broadcast and targeted advertising solutions, acquired Tellyo,
the developer of a remote production platform. The deal, announced in November
2023 and preceded by a “strategic partnership,” is set to enhance Amagi’s video
toolset for live sports and news broadcasts.
The move also
expands the European presence of the India-based Amagi. In January 2023, Amagi
set up a development center in Croatia, its first outside India. By bringing
together Tellyo’s product development center in Poland and Amagi’s hubs in
India and Croatia, Amagi expects to drive cloud innovation.
Baskar Subramanian,
Amagi’s co-founder and CEO, said in a press release, “Tellyo brings a wealth of
expertise, a strong team, and innovative products that align perfectly with our
strategic vision of being a frontrunner in the cloud-based live broadcast technology
space. Together, we will not only enrich Amagi’s product offerings, but also
bring investments in the Eastern European region and create new possibilities
for local talent and global customers.”
Tellyo’s main
product is Stream Studio, which has been used by customers like Liberty Global,
ESPN, and Sunset+Vine for producing live content streamed to digital and social
media.
In late 2022, Amagi
received more than $100 million in investment from equity firm General
Atlantic, which valued the company at $1.4 billion. Amagi also has investment
from Accel, Norwest Venture Partners, and Avataar Ventures. Amagi’s clients
include ABS-CBN, A+E Networks UK, beIN Sports, Cinedigm, Fox Networks,
Fremantle, and NBCUniversal.
Sony Buys iSIZE
In November 2023,
Sony Interactive Entertainment (SIE) acquired iSIZE, a London-based company
specializing in using deep neural networks to enhance video delivery, signaling
a potential shift from Sony toward cloud gaming. iSIZE developed video
pre-processing software BitSave, which uses AI “to eliminate invisible detail,”
resulting in “perceptually equivalent video quality at a significantly lower
bitrate.” iSIZE’s CEO and founder is Sergio Grce, and Yiannis Andreopoulos is
CTO and co-founder.
Ueli Gallizzi, SVP
of SIE’s Future Technology Group, wrote in a blog post, “The acquisition
provides SIE with significant expertise in applying machine learning to video
processing, which will benefit a range of our R&D efforts as well as our
video and streaming services.”
Speculation that
Sony will use iSIZE tech to boost efficiency of cloud gaming seems to stem from
the acquisition coming from its interactive division. Sony has made no comment
in this regard. The company nonetheless rolled out the ability for PlayStation
5 subscribers to stream games via the cloud in a move that seems motivated to
counter Microsoft’s cloud gaming plans.
OTTera Buys Float
Left
In October 2023,
streaming white label specialist OTTera acquired Float Left from iMedia Brands,
which in turn acquired the OTT user experience specialist only 4 years earlier.
OTTera is
headquartered in Los Angeles and provides customized OTT applications, FAST
channel development, and monetization solutions. The company said, “This
strategic investment aligns with [our] commitment to leverage Float Left’s
expertise, particularly in front-end development, to diversify services and
strengthen [our] market position.” In October 2023, AMC Networks announced that
it had teamed with OTTera to launch its first FAST channel in Spain.
Broadcom Closes
VMware Deal
U.S. chipmaker
Broadcom’s $69 billion buyout of Palo Alto, Calif.-based virtualization and
cloud-computing software provider VMware was announced mid-2022 and closed in
late November 2023 after securing China’s approval for the deal..
The acquisition,
the biggest by far in Broadcom’s history, has raised eyebrows, with TechCrunch
noting that the firm previously spent more than $18 billion in 2018 to buy
legacy enterprise software company CA Technologies and another $11 billion in
2019 for Symantec’s legacy security business.
Forrester, a global IT market researcher, predicts that many VMware customers are on the verge of leaving, citing delays in the merger and recent price hikes. In its predictions for 2024, Forrester says VMware’s acquisition has “cast a shadow on an already beleaguered VMware customer base.” It adds that many of VMware’s enterprise clients are exploring alternatives to its virtualization, cloud management, end-user computing, and hyperconverged infrastructure products despite the firm’s dominance in these technologies.
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