09.06.2013 11:53 AM
Ericsson begins Mediaroom integration after closing acquisition

 

 

Ericsson will be explaining at IBC 2013 how it will blend the Mediaroom IPTV software acquired from Microsoft with its existing IPTV software, after closing the deal last week. Mediaroom will become a central plank of Ericsson’s expanding IPTV strategy, which will focus on the ability of the platform to support multiscreen services within the home, connecting wireless devices such as tablets and smartphones, but also featuring games consoles.

 

 Microsoft is also targeting the multiscreen home, but taking the OTT route after effectively withdrawing from IPTV by selling Mediaroom. Microsoft has realigned its video and TV strategy around the Xbox360 games console and the Windows operating system, having developed its own content stores and alliances with various pay-TV operators around the console, which all left Mediaroom increasingly isolated, despite continuing success in IPTV with 25 percent of the global market for IPTV middleware.

 

Ericsson, on the other hand, is focusing heavily on IPTV in the belief that the platform has come of age and now matches satellite and cable for quality and capacity, while bringing some extra advantages in terms of interactivity that will make it a compelling proposition for multiscreen services in the home.

“IPTV subscribers alone are predicted to grow by more than 18% percent each year to reach 105 million and revenue of $45 billion by 2015,” said Per Borgklint, senior vice president and head of business unit support solutions at Ericsson. “By incorporating Mediaroom into our broad portfolio of solutions, we will ensure our customers have the ultimate partner as they transform toward true TV Anywhere multiscreen services and optimized video delivery in any network.”

The former Mediaroom business unit, including more than 400 staff, will be integrated into the Ericsson group under business unit support solutions, and has been renamed Ericsson Mediaroom. The original announcement that Ericsson would acquire Microsoft’s Mediaroom came on April 8, 2013.

The acquisition partly reflects Ericsson’s own relative lack of success in penetrating the IPTV market itself. Its IPTV middleware launched in late 2008 only captured around 3.5 percent of the market with customers including Telekom Austria and Taiwan’s largest telco Chunghwa Telecom. Meanwhile Mediaroom gained a quarter of the market by mopping up a few big clients, with AT&T Uverse in the U.S. accounting for 60 percent of its user base, according to analyst group Screen Digest. Deutsche Telekom, including international subsidiaries, is the next largest customer with 13 percent while BT, Portugal Telecom, and Swisscom each account for 5 percent of the installed base, although BT became the one major defector, ditching Mediaroom in 2012.

So, including the Mediaroom acquisition, Ericsson held 28.6 percent share of the IPTV software market at the end of 2012, with Screen Digest predicting this will increase to 31 percent at the end of 2016, at an installed base of 29 million. Competitors will include Cisco, which in a similar vein acquired NDS, and from Arris as the new owner of Motorola Home and its Secure Media and Dreampark software.

A clue to how Ericsson will reposition Mediaroom can be gleaned from the latest report of its Consumer Labs division, finding that a fast-growing number of people are consuming TV and on-demand content on mobile devices within the home. Ericsson is likely to focus strongly on multiscreen services and extend Mediaroom’s capabilities in that direction to increase the efficiency of multichannel delivery to the home.



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