Verimatrix Secures DVB Market Growth by Acquiring Conditional Access Partner Comvenient

Event Summary

March 31, 2011 -- Verimatrix announced the acquisition of Comvenient, a developer of DVB conditional access (CA) technology based in Germany. Verimatrix and Comvenient have been partners since 2008 in the development of the Verimatrix Video Content Authority System (VCAS) for DVB security solution. The acquisition formalizes the incorporation and marketing of Comvenient’s DVB technology and expertise within the Verimatrix multi-network architecture. Comvenient’s headquarters in Munich will become the European headquarter for Verimatrix.

Quick Take

Analytical Summary

• Current Perspective: Very positive on Verimatrix’s announced acquisition of Comvenient, primarily because it is grounded in a solid and near-term business opportunity – penetrating the dominant global DVB market – as opposed to the industry noise around OTT (and IPTV), where the revenue opportunity remains somewhat more limited and longer-term. While Verimatrix is acquiring an existing partner, whose conditional access (CA) technology it has already integrated into its VCAS for DVB solution, the acquisition will enable Verimatrix to unify its R&D, marketing, sales, and branding to target growth opportunities in the DVB market more rapidly and comprehensively.

• Vendor Importance: Very high to Verimatrix, which has already established itself as the leading content security vendor in the IP space, because it will improve the company’s positioning in the DVB CA market. The Comvenient acquisition completes Verimatrix’s DVB offering, which ranges from lower-cost, card-less security solutions based on integration with low-cost chipsets to smart-card solutions for premium DVB services, as well as an evolution towards hybrid networks combining DVB and IP. More importantly, Verimatrix is targeting clear revenue opportunities, primarily in growth markets where broadcast systems are undergoing transitions from analog to digital and MPEG-2 to MPEG-4, scenarios in which operators are likely to consider new content security technology.

• Market Impact: High on the DMI market and the content security segment, because traditional content security vendors (i.e., Conax, Irdeto, Nagravision, and NDS) will need to increase their defensive and offensive posturing to protect their incumbent DVB positioning from a greater Verimatrix threat. With the growth of IPTV, many of them have already enhanced their solutions with greater flexibility to incorporate IP and software technology, increasing the attractiveness of their own evolutionary and hybrid roadmaps. More broadly, DMI solution vendors with STB assets (e.g., Cisco, Huawei, Motorola, and others) which are eyeing the DVB market opportunity might consider Verimatrix as a more strategic asset to own. For instance, Cisco acquired DVN Holdings in China to penetrate the international digital cable STB market, and it could enhance its competitiveness with STB rivals such as Pace by matching Pace’s acquisition of Latens with its own acquisition of Verimatrix.

CLIENTS ONLY

Current Perspective

| Client access - Full report in Digital Media Infrastructure | More information

Top

Top