Telestream Grabs Anystream

Telestream, the Nevada City, Calif.-based firm whose FlipFactory
transcoding software is used by many broadcast stations and networks
to convert digital files for transfer between different vendors'
products, has signed a definitive agreement to acquire Anystream, the
division of Grab Networks which provides large-scale transcoding
systems to programmers to prepare their content for new-media
applications as well as VOD.

Financial terms of the agreement between the two privately held
companies were not disclosed.  Under the deal, which is expected to
close this month, Telestream is acquiring the business operations of
Dulles, Va.-based Anystream from Grab, including its East Coast sales
offices in Boston and New York, and adding 30 personnel including
Anystream SVP of sales Kevin McCartney.

While both companies sell transcoding technology and count many
networks as mutual customers, there is little overlap between their
products, according to Telestream CEO Dan Castles. Castles says that
FlipFactory is usually sold on a small scale, with many sales running
one to four licenses, while Anystream's Agility transcoding systems
tend to operate on a much larger-scale and cater to enterprise-level
applications and customers like NBC Universal and Discovery.

Another difference is that FlipFactory is often used to prepare
content for traditional broadcast applications, such as a station
transcoding syndicated content after ingest into the format used by
its playout server, while Anystream is predominantly used to convert
broadcast content into Web-friendly formats.

"It's a case where one plus one equals more than two," says Castles.
"They're different workflows, often at the same customer."

Telestream, which also sells desktop-level transcoding systems as well
as live encoding products, will ultimately discard the Anystream name
but keep the brand names of its products including Agility and Avalon,
a metadata packaging and distribution system. It intends to
demonstrate the combined portfolio of products at the IBC show in
Amsterdam next month.

The acquisition by Telestream maintains a recent pattern of deals for
Anystream, which was founded a decade ago. In 2007 Anystream acquired
Cauldron Solutions, a provider of content management systems for cable
VOD, and in 2008 it merged with Web syndication specialist Voxant to
form Grab Networks. At the time, Anystream said the Voxant deal marked
a strategic shift to get directly involved in the monetization side of
Web video, a business that Grab will continue to focus on.

Becoming part of Telestream seems to mark a return to Anystream's
roots in what has become an increasingly competitive transcoding
market. The deal certainly positions Telestream to get more share of
the worldwide transcoding market, which research firm In-Stat predicts
will grow from $117 million to $297 million by 2014.