TiVo parent Xperi is upping its connected TV game, pushing ahead its entry into the space with a $109 million acquisition of OTT software provider Vewd.
The deal includes a mix of debt and cash.
Xperi said the deal makes it a leading independent streaming media platform through TiVo and the largest smart TV middleware provider globally. In addition to OTT software for smart TV makers, Vewd also provides software for connected car and video-over-broadband operators.
Vewd has been around sine 2002 and counts primary offices in Norway, Sweden, Taiwan and Poland. In 2017 it rebranded from Opera TV to Vewd after being carved out from Opera.
According to Xperi, the aquistion gives it access to a footprint of around 15 million installed devices in Europe that can be enabled for monetization, specifically calling out activation of free ad-supported TV service of TiVo+.
Vewd has a presence in over 450 million connected TV devices that have shipped with the company’s Smart TV Solutions, from customers including Amazon, Commscope, Hisense, Nintendo, Sagemcom, Skyworth, Sony, Swisscom, TCL, TPV Phillips and Vestel. Vewd software helps provide the OTT experience and enables programmatic promotion of content from streaming video entertainment apps. In addition to device-makers, Vewd signs deals with some publishers to incorporate their OTT apps
Last fall, for example. it signed an agreement with Redbox to pre-load the Redbox app on all new TVs and set-top boxes in the U.S. that fun the Vewd OS.
Accelerates TiVo OS plans
It looks like a key aspect of the deal for Xperi is to speed deployment plans for the TiVo operating system for connected and smart TVs.
“Xperi’s TiVo product offerings, when integrated with Vewd’s suite of streaming platform solutions, will help accelerate and scale the deployment of TiVo OS for connected TVs and expand our video-over-broadband offerings,” said Jon Kirchner, chief executive officer of Xperi, in a statement. “Vewd’s global reach and expertise in providing support to content owners, TV OEMs, and SoC partners as they deploy middleware and OS solutions across various devices is tremendously valuable and further paves the way for additional monetization opportunities as we expand our global footprint of streaming devices.”
TiVo already uses Stream OS for its 4K streaming dongle, and it plans to equip smart TVs with Stream OS that will ship sometime within the next two years. In February, Kirchner said that Stream 4K dongles are an element of a broader strategy but that TVs built on the operating system are likely to make up the bulk of TiVo’s business down the line.
“What we expect is that the embedded OS strategy will drive significantly more footprint,” Kirchner said during first quarter earnings.
In the second quarter Xperi reported expectations for double-digit growth in the TiVo business this year, fueled by enhanced connected TV advertising. The TiVo Stream OS is expected to bolster TiVo’s next-generation of its Xtend suite of advertising tools, which leverages TiVo first-party proprietary viewership data with the aim of bridging the gap of CTV and linear worlds for marketers.
TiVo/Xperi aren’t the only ones looking to get ahead in the TV operating system game. Comcast has been making moves in this space, including XClass smart TVs and Flex devices, with plans to license its Flex operating system to third-parties.
In a recent column for Fierce Video, TVREV’s Alan Wolk called out how TV OS wars are heating up.
“Control of the TV operating system is going to be one of the major battles of the next decades as companies that control the OS get to decide which apps are available to users, when and how easy it is to find them. (Sort of like an MVPD.),” wrote Wolk. “In addition, the TVOS owners get all sorts of data about viewer behavior, which they can then use to sell advertising on their FASTs or sell to other services for the same purpose.”
Improved growth outlook for product business
In Tuesday’s announcement, Kirchner cited a strengthened growth outlook for the Xperi product business as the company intends to separate its IP and product segments starting this fall.
“We expect incremental revenue of $10 million in the second half of this year, followed by substantially higher revenue and a positive EBITDA contribution in 2023,” said Kirchner, regarding the Vewd acquisition.
The deal also expands Xperi’s workforce. With the acquisition, Xperi is bringing on approximately 275 employees from Vewd. The existing Vewd management team will continue to lead the business and be integrated into Xperi’s management structure.
“We’re excited to join the Xperi family and look forward to combining the experience, skills and scale of both organizations to deliver new innovations for our clients. Together, we’re set to deliver more engaging experiences to the millions of viewers globally who enjoy TV shows, sports, and the movies they love through our platform,” said Aneesh Rajaram, Vewd CEO, in a statement.