Cisco: ExtendMedia buy was 'logical extension' of its portfolio

Cisco says its acquisition of online video platform ExtendMedia, which is powering a TV Everywhere-type offering for Bell Canada, is a logical extension of its portfolio, as it looks to provide a leadership role in the transition to IP video.

The company announced this morning that it would acquire the white label OVP, based in Newton, Mass., for an undisclosed sum.

"We're in a unique position because of our acquisition of Scientific Atlanta five years ago... we're obviously one of the world's leading Internet infrastructure companies, and also obviously a major player in the MPEG-2 and IPTV video architectures through our service provider video technology group," said Kip Compton, general manager video and content platforms business unit at Cisco. "I think you're going to see us reacting to service providers who are looking to us to help them migrate through this transition to IP video.

"Customers are looking for leadership in this space and I think they're looking to companies like Cisco because of our depth of understanding of the Internet as well as our depth of understanding of traditional video infrastructures and service provider operations. We expect customers to be pleased with this transaction."

Compton said the online video architectures that a lot of service providers have experimented with are moving closer and closer to the center of Cisco's business.

"We see a market transition from the traditional IPTV architectures, as well as the traditional digital cable architectures, to a new IP video architecture. TV Everywhere is a great early example of that early focus on the PC. But we see the business beginning to use Internet video architectures to deliver premium content to consumers on many different devices, and that's actually the driving force behind this transaction, to bring in a platform that enables service providers to manage, publish and monetize content across a bunch of different devices."

Brightcove COO and president David Mendels said Cisco's move makes sense for the company and the OVP space.

"We've tracked at various points somewhere between 50 and 100 companies around the world that do something in this space and we are absolutely seeing that there is a consolidation occurring and that's resulting in a business acceleration for us at Brightcove," he said in a telephone interview.

Comcast subsidiary, thePlatform, which powers the MSO's Xfinity TV Everywhere initiative, as well as several others, issued a statement that said the buy is a part of what it sees as a continuing trend.

"thePlatform has consistently predicted further consolidation in the white-label OVP (online video platform) space, and today's acquisition of ExtendMedia by Cisco is simply part of this trend," it said. "Serving the premium video market requires scale and resources, as thePlatform knows from a decade of experience. thePlatform's own acquisition by Comcast has enabled the company to grow and scale its business, while maintaining its independence and broad focus on the video market."

Compton, meanwhile, said the deal is expected to close by the end of the year, after which integration of Extend's business "should go quickly."

"We'll certainly be continuing all of the activities that Extend has going with its customers," he said. "We were very impressed with the team at Extend and their technology, but also the traction they achieved with service providers. We'll be continuing and expanding those efforts."

Financial terms of the transaction are undisclosed. The acquisition is subject to various standard closing conditions and is expected to be complete in the first half of Cisco's fiscal year 2011. Upon the close of the acquisition, the majority of the ExtendMedia team will be integrated into Cisco's Service Provider Video Technology Group. The Newton, Mass.-based company has its main workforce in Toronto. The ExtendMedia Sales and Professional Services teams will integrate into the Cisco Sales and Advanced Services organizations.

For more:
- see this release

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