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Arris, Charter Snap Up ActiveVideo for $135M

It took almost 30 years to get there, but ActiveVideo has fi nally executed its exit strategy.

ActiveVideo never went the IPO route, but has found a buyer, in the form of a new Arris-Charter Communications joint venture that put up $135 million for the cloud video pioneer. The company’s origins date back to 1988, when it was known as ICTV.

The joint venture (Arris will own 65% and serve as the sales arm for Active- Video’s CloudTV platform) plans to keep ActiveVideo on a long leash, allowing it to operate relatively independently. ActiveVideo CEO Jeff Miller will continue to run the company, which has more than 100 employees.

“For the most part, the team will stay intact; at least that’s our hope, anyway,” Bruce McClelland, president of Arris’s network and cloud and global services division, said. “The idea is to keep the [ActiveVideo] team nimble and able to innovate.”

While this kind of MSO-vendor joint acquisition seems unusual, Arris and Charter each have something signifi cant to gain from it.

Charter is relying heavily on ActiveVideo’s technology to power a new cloud-based Spectrum Guide that will run on the MSO’s new IP-capable Worldbox platform and millions of already-deployed QAM-only boxes.

That way, Charter can unify its video user experience without having to swap out all its boxes.

Charter is currently testing the Spectrum Guide in Fort Worth, Texas, and expects to deploy it commercially “in the coming months,” a spokesman said.

Charter’s involvement in the J.V. also will keep it close to technology playing a major role in its future and allow some infl uence over ActiveVideo’s future roadmap.

ActiveVideo’s original claim to fame was its ability to refresh the experience on legacy, lower-end boxes by stitching the interface to the video and delivering it to QAM-based boxes via an MPEG-based transport stream.

But its technology can also support IP devices, such as Charter’s Worldbox.

Liberty Global’s UPC Hungary unit is currently using ActiveVideo’s new StreamCast technology to deliver YouTube and other apps to older, non-IP set-tops.

Cablevision Systems, Deutsche Telekom, Time Warner Cable and J:COM of Japan are among other operators using ActiveVideo’s technology. Comcast has tested ActiveVideo’s platform for a Web-style VOD interface in Chattanooga, Tenn., but has not expanded beyond that.

Miller said he expects the deal to help ActiveVideo scale its overall business.

“When you used to talk about ActiveVideo and scale, it was about the product,” Miller said. “It’s clear that it [the product] scales. We really had to focus on company scale and building the infrastructure around the product to make it available to everybody.”

The sale also speaks to the patience of Gary Lauder, who, via Lauder Partners, is the majority owner of ActiveVideo and has been involved with the company since day one.

Earlier this month, Lauder also sold the patents of OnLive, a cloud-powered video gaming startup, to Sony.