Motorola Acquires SecureMedia
January 2010
During CES 2010, Motorola’s Home & Networks Mobility business announced it was buying SecureM, which operates DRM company SecureMedia. Financial terms of the acquisition were not released. About two months ago in November 2009, the same Motorola group acquired BitBand and RadioFrame.
In November 2009, the Wall Street Journal reported that Motorola was approached to sell its Home & Networks Mobility business unit. Although Motorola has said it remains committed to its plan to split into two businesses (mobile devices and broadband) it has not made any official announcements lately.
The Home & Networks Mobility unit had US$10.1 billion in sales in 2008. SecureMedia develops the “Encryptonite ONE” content security system for IPTV, mobile and OTT systems. Executives at SecureMedia said the company would expand its reach into new markets, including Cable.
Additionally, Motorola reported sales of US$5.7 billion in the fourth quarter of 2009. For the full year of 2009, Motorola’s sales were US$22 billion. The company’s Home & Networks Mobility shipped 3.4 million digital entertainment devices in 2009 and it has now reached 100 million shipped digital entertainment devices.
Source: MRG, Inc., January 2010 IPTV Bulletin
HBO's Bob Zitter Shows Why "HBO Everywhere" Will Work
January 2010
Amid the scramble to find a business model for Broadband video services (OTT or Internet Video) that create both revenue and consumer loyalty for IPTV Operators, they should take note of valuable insights from established premium content owners like HBO, as represented by Bob Zitter, EVP of HBO in his presentation at the MPEGIF session at CES 2010. By reminding the audience that HBO is a subscription-based operation that also licenses about 60% of Hollywood’s (studio) content, Zitter also reminded them that “Good content is not free.” With that as a backdrop, Mr. Zitter went on to explain his startling prediction that “in 5 years people won’t buy CDs or DVDs; they’ll get content from MVPD (Cable or TelcoTV company) and it will look like free.”
Bob Zitter, EVP of HBO
Photo Source: MRG, Inc.
He was talking, of course, about “HBO GO,” which is a lot like TV Everywhere for laptops for people who already have an HBO subscription through a Cable or TelcoTV supplier such as Comcast or Verizon. Providing “free” content by genre (movies, comedy, documentary, sports) to PC users already having an HBO subscription, HBO GO can work from any Broadband connection (starting in the U.S. and moving later to Europe) in much the same way as a Slingbox works, only there’s no need to have a Sling device. Instead, the content is already stored and served from distributed HBO (VOD) servers. Originally tested and perfected as part of Comcast’s “Fancast” system (which housed Free-on-Demand content on the VOD servers), HBO GO has been successfully tested in Milwaukee and Green Bay Wisconsin, U.S.A., and will soon roll out to other IPTV Operators first in the U.S. and later in Europe.
Analyst’s Comment: Why HBO GO Business Model Will Probably Work for Operators
HBO GO is a free service offered to PC users already having an HBO and Broadband subscription through their IPTV or Cable Operator. To log on only requires that the subscriber registers the individual PC with HBO GO (or through an integrated service like Comcast’s Fancast Xfinity). Following are some reasons we believe HBO GO and a host service like Fancast Xfinity (originally called TV Everywhere) deserve our attention:
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Security: HBO Content is securely streamed or downloaded to a PC (i.e. Mac or Windows) using Conditional Access and DRM (Digital Rights Management), thereby removing concerns about piracy.
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Free Content: The content is being paid for in the original subscription, but is still appealing to the PC users who want Internet content to be “free,” resulting in improved customer loyalty.
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Tested Business Model: The concept of extending free usage to subscribers has long ago been tested and proven successful in the late 90s by the U.S. Cable industry through its use of SVOD (Subscription VOD).
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No Pet Videos: Professional quality is a prerequisite for content, so home-made content has already been screened out and users don’t have to do endless Internet searches to get their content.
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Fair Pay System: Professional content makers will want to continue developing for HBO because they get paid for their efforts based on the premium subscription.
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Expands Viewership: From the HBO perspective, this expands the distribution channels for HBO content, allowing for expanded viewership.
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Promotes Triple-Play: From the carrier perspective (Comcast, Verizon, etc.) combining HBO GO and TV Everywhere into a single integrated service (as is now offered by Comcast under the Fancast Xfinity TV brand) only to subscribers for both Broadband and Video services builds an incentive for customers to keep the double- or triple-play service with one provider.
Analyst Comment: We believe if HBO GO becomes popular with consumers, and it won’t be the first time HBO helped establish a trend, as it did with SVOD in the early days of VOD. One thing is certain, HBO will not give away content on the Internet for free and thereby run itself into financial ruin. “Free” PC-based services like HBO GO bundled with TV Everywhere services, should see good acceptance in 2010 while answering the challenge from other “free” sources like Hulu (which in itself has become ad-based in recent weeks).
Source: MRG, Inc., January 2010 IPTV Bulletin
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