NDS Group is getting its mitts on software that the conditional-access technology vendor thinks will give it a bigger Internet-Protocol TV play and let it deliver new digital-video recorder features.
Last week, the company, majority-owned by Rupert Murdoch's News Corp., announced the acquisition of Jungo Software Technologies, an Israeli developer of software for broadband Internet residential gateways, in a deal worth up to $107.5 million in cash.
That purchase price includes a $17 million payment contingent on Jungo reaching certain fiscal targets in the 12 months after the company becomes part of NDS. The companies expect the deal to close in first quarter 2007.
Jungo's key product is OpenRG, a stack of middleware software for residential-gateway network devices that provides security, voice-over-IP, wireless access and other features. Customers include Cisco Systems, Siemens and Westell Technologies. Verizon Communications is the largest U.S. telco that has deployed Jungo-based gateways in conjunction with broadband Internet services.
What does this bring to NDS? In the long run, the company sees such IP-based home gateways as control points for video distribution — hence, another area to plant NDS's security technology, which manages access rights for paid digital video content.
“We believe that broadband will become a major delivery platform for video,” NDS CEO Abe Peled told analysts on a conference call.
With Jungo, NDS now has the tools to be a gatekeeper for IP-based video content no matter how it's distributed, said Keith Nissen, principal analyst at In-Stat. “In the future, whether it's through a telco or a cable company — or from Google — you're going to be using IP video downloads one way or another,” he said.
NDS wanted to be able to offer an IP residential gateway that could be managed by a service provider, said Ian Tapp, vice president of business development. While a PC could be used to distribute in-home video, he said, “invariably a PC is not conducive to management by the service provider.”
Motorola, for one, is also targeting the market. Last month the cable equipment maker announced plans to acquire Netopia, a maker of digital-subscriber-line gateways, to round out its own IPTV story. But unlike Netopia, which sells its own hardware, Jungo provides only the software that manufacturers in turn incorporate into their products.
Using Jungo's technology, NDS expects to provide two networked digital-video-recorder features for its Synamedia Metro IPTV middleware by the middle of 2007, Tapp said.
First, in a multiroom DVR setup, video can be stored and accessed on other devices in a home network, such as a PC. “Once you start to think about a networked home, the DVR doesn't have to be in the set-top box,” Tapp said.
In addition, NDS has developed what it has termed ShareTV, a peer-to-peer DVR capability that operates within a service provider's domain. This would allow more efficient distribution of content, by allowing a subscriber's home gateway to act as a server and stream video to other subscribers.
NDS was in the process of implementing those features through a partnership with Jungo, before it decided to simply buy the whole company, Tapp said. For now, NDS plans to operate Jungo as a separate unit, led by Jungo CEO Ofer Vilenski.
Jungo, founded in 1998, has 140 employees. The company claims to be profitable, with revenues of $11.4 million for the nine months ended Sept. 30.
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