The longstanding rivalry between telcos and over-the-top video providers may be coming to an end as one gearmaker attempts to play peacemaker by getting the competitors to cooperate with each other – a move that likely will be copied as it has potential to create greater revenue for both parties.
Entone Inc. announced Tuesday a deal to integrate the VUDU Internet entertainment platform with its IP video gateways and home media hubs, which are used by more than 70 telcos to provide payTV and video on demand (VoD) services. The integration means that Entone’s customers can supplement live broadcast and DVR services with VUDU’s library of more than 14,000 movie and TV titles. The telco and VUDU would negotiate separately to share the consumer revenue.
“When you talk to operators ... they view Internet video as competitive. [Entone/VUDU] have turned that around, particularly for the smaller operators,” said analyst Colin Dixon, practice manager for broadband media at The Diffusion Group. Smaller operators often struggle to strike content deals, he explained, noting they lack the bargaining power of a Comcast Corp. and often end up paying more.
“The other thing I like about this play is it leverages the existing infrastructure and resources,” he said.
While the operator gets access to an existing content library quickly, VUDU gets access to the operator’s service delivery infrastructure and subscribers. Consumers, meanwhile, don’t need to buy a separate VUDU box to get VUDU programming because it will work with what they already have.
And, in the case of Entone, which offers the aptly named Hydra IP video gateway that enables all TVs in a home with a single device, the savings can be significant, said Entone CEO Steve McKay, noting most OTT services require a device for every TV – at several hundred dollars a whack. AppleTV, for example, costs about $300 for the device plus $1.99 for each view.
