Market Watch

Motorola Ventures Invests in BlackArrow


Display Driver IC Forecast

Motorola Mobility, which manufactures mobile phones and set-top boxes, has invested in Blackarrow via Motorola Ventures - it's strategic funding division. BlackArrow, a US advertising technology firm specialising in advanced and targeted advertising, has built products which occupy important positions in the SCTE-130 advertising ecosystem. Although the investment - of an undisclosed sum - is not expected to grant Motorola a place on BlackArrow's board, the capital infusion will herald cooperation between the firms in the development of set-top, mobile, and network-based targeted advertising solutions.

Analysis
Motorola's interest in advertising is plain. As a conditional access (CA) and CPE vendor, the ability to pre-integrate its CA, set-top and home gateway products with advertising components presents two discrete opportunities: pre-integration allows any one product to cross-subsidize the uptake of others within the ecosystem, and for existing deployments, can increase the attraction of remaining within the Motorola ecosystem itself.

More broadly, Motorola's recent entry into the multiscreen management space - with Medios - presents another rationale for the firm to promote network and device-based advertising systems. While multiscreen delivery is of intellectual interest to many operators, the ability to recoup the cost of the multiscreen back-office is a pre-requisite to multiscreen's wider acceptance. Since connectable video devices depend almost universally on unicast streaming, there is a strong case for accompanying these unique video streams with addressed advertising. Doing so allows the operator to monetize the multiscreen service which is likely to be freely bundled within the wider pay offer.

From a positioning perspective, and given that rival firm NDS secured a seat on BlackArrow's board in April 2010, Motorola has strategic interests in establishing a stake in BlackArrow. NDS' ambitions in set-top based targeted advertising - and multiscreen content management - place BlackArrow squarely in camp of potential acquisitions. Were this to happen, Motorola's ability to participate in joint product development would be sequestered away. Motorola's investment is a form of insurance against the future inability to form partnerships in the advanced advertising space