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Aereo Antidote Syncbak Eyeing Major Expansion

With fresh funding from CBS in its pocket, Syncbak has big expansion plans for this year as the startup looks to help broadcasters deliver signals to mobile devices and fend off the threat posed by Aereo’s broadband TV/cloud DVR combo.

“I hope to be deployed by 500 stations by the end of 2013. I could see a path to get there,” Syncbak founder and CEO Jack Perry said last week, soon after CBS announced it had made a strategic minority investment in the Marion, Iowa-based company.

CBS did not disclose the amount of the investment, but a source speaking on background described it as a double-digit-percentage minority stake. Founded in 2009, Syncbak has not disclosed how much funding it has raised.

Syncbak, which counts the National Association of Broadcasters as an investor, is currently being tested on more than 100 TV stations in 70 markets, so it’s looking to expand that footprint by about five times before the year is done. Perry said 55 stations are live now. “The balance are stress-testing the technology and proving it out,” he said.

Working in tandem with broadcasters, Syncbak’s platform replicates over-the- air broadcasts and delivers the simulcast signal over the Internet and cellular networks to select Android devices and to Apple iPads and iPhones. It does this using a specialized device deployed at the station that intercepts the signal before transcoding and packaging those streams for delivery.

While broadcasters are making a push for mobile DTV, many are hedging their bets with Syncbak’s Internet-based delivery system. CBS’s investment comes as Aereo presses its case for an Internet-based TV station content delivery system that broadcasters claim is illegal and threatens their business model. Last week, Aereo announced it would launch in its second market, Boston, on May 15. Aereo has plans to launch in 21 more markets and extend its potential reach to 97 million Americans.

“We don’t have a warehouse in Brooklyn,” Perry said in reference to the antenna array Aereo has installed for its initial launch in New York. “We embed our technology at the station.”

Another key difference is that Syncbak’s encrypted, mobile signals are only accessible from within the broadcaster’s designated market area (DMA). However, the broadcaster could deliver some content out-of- market, if it has the rights to do so. Broadcasters set those policies and business rules using SyncPanel, an online tool that manages the Syncbak subchannel streams and collects viewership data.

“As we capture the broadcast, we attach the rights to it,” Perry explained.

And Syncbak isn’t the only mobile video specialist looking to work with broadcasters. Dyle, a venture that also has backing from several major broadcasters, has developed a system that ships live digital-TV signals to mobile devices. But instead of delivering the broadcast TV feed over the Internet, Dyle uses a small portion of the traditional broadcast spectrum to deliver secure signals over-the-air to mobile devices that must be mated with a special antenna. While that approach will prevent users from gobbling up their cellular data caps, broadcasters need to fork out about $100,000 in upgrades to accommodate the Dyle system.

“To me, it was about the path of least resistance. All the consumer has to do is deploy the app,” Perry said of Syncbak’s delivery architecture. Syncbak, he added, also locks down the device’s GPS system so users can’t spoof the system and access signals that aren’t authorized to be received outside the broadcaster’s DMA.

According to Perry, the upfront cost to broadcasters for the Syncbak system is “zero.” He wouldn’t get into the details of Syncbak’s business model, but alluded that it will likely end up as a revenue share with broadcasters.

“I’d like to have this be the technology standard,” Perry said. “The business models will work themselves out.”

John Eggerton contributed to this report.

TAKEAWAY

Syncbak, another player aiming to deliver TV-station signals over the Internet, got a big boost from an investment by CBS.