Sixteen months after private equity purchased the assets under Cisco’s Video Services umbrella for $1 billion, rebranding the collective unit as Synamedia, the U.K.-based video technology vendor has emerged with a multipronged plan to serve the fast-changing video industry.
As its client base expands beyond satellite and cable pay TV providers to media companies and others involved in direct-to-consumer over-the-top distribution, Synamedia has expanded beyond traditional linear set-top provisioning and watermarking into areas including piracy disruption, search and discovery and advertising.
At CES in Las Vegas, Multichannel News talked with CEO Yves Padrines, who shared his perspective on the global video marketplace and how Synamedia — which counts Comcast’s Sky as an investor — fits into it. Here’s an edited transcript.
MCN: Synamedia has evolved from privacy prevention to what you call 'piracy disruption.' What is the market opportunity here?
Yves Padrines: If you look at the challenges we see in the market, there is this multibillion-dollar race on the content side. You have all of these giant media companies and large service providers spending billions of dollars in content production. Netflix spent $15 billion last year; Comcast spent $20 billion; Disney/Fox spent $23 billion. At the end of the day, all of this investment is sitting on the balance sheets of all these media giants, and they have to monetize it.
The problem with all of that is you have streaming piracy, which is becoming an increasingly big problem for the industry. All of this content is available everywhere and a lot of it is hacked. An end user can now buy a device for $100 and be able to watch 3,000 to 5,000 channels for the next 12 to 18 months. And a lot of these illegal services offer very nice solutions. They aggregate all this content in a very nice way. Of course, they can spend money on the technology because they don’t have to pay anything on the content side. The experience is so good, even a lot of users don’t know it’s illegal.
MCN: So how do you slow that down?
YP: We’ve invested a lot over the last year to disrupt the streaming piracy ecosystem. One of the adjacent parts on the piracy side is credential sharing. So we launched at CES last year a product called Credentials Sharing and Fraud Insight. It’s an AI solution where we can identify when people are doing casual sharing in a way they’re not allowed to. It’s a way to keep honest people honest. If you have, for example, a family that’s supposed to be based in one household, and you see that this family has 25 people using your service — or maybe it’s four or five people and they’re never in the same location — maybe they’re not a family at all. So we’re offering this AI solution to media companies, direct-to-consumer operators and pay TV operators as a way to be able to monitor this problem and decide what they want to do. They can stop the service, or they can upsell new services like family packages.
You also have a lot of people hacking credentials. There are over 4.5 billion credentials and passwords you can buy on the dark web for $4 or $5. Disney+, as soon as they launched, there were millions of hacked accounts after just a few weeks. And it’s not just a problem for video, it’s a problem for providers of WiFi and broadband.
MCN: With products like Infinite, Synamedia is also getting involved in search and recommendation, yes?
YP: Because you have this explosion of content, you also have this explosion of choice with all these direct-to-consumer and OTT platforms available. We strongly believe there is a need to help the end user to find this content, to help with unified search. We also believe that the long-term winners in the business of video aggregation will be the ones who own the broadband, or they will have access in a cost-effective way to broadband. They are going to have this new bundle of solutions where they are providing broadband, mobile and TV. And they’re going to have a way to aggregate all of the content to high-end broadband subscribers.
MCN: As others are moving towards developing the OTT advertising market with advanced solutions, Synamedia is investing in linear. Why?
YP: TV advertising is still the most cost-effective way to promote services and products to the mass market. The linear side is still worth $120 billion in revenue per year. And for streaming and VOD, it’s still less than $20 million. The problem with linear advertising is that you don’t have very good measurement, and you don’t have very good targeting solutions available. So we co-developed with Sky a solution called AdSmart, which has been very well-deployed and successful in the U.K. and has launched in Italy as well. This lets you push targeted advertising on pay TV set-top boxes. We’re now working on the next generation of targeted advertising solutions that will bring better measurements and targeted solutions for linear.
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Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!