Market Insight

Amino diversifies into multiscreen with Booxmedia acquisition

July 09, 2015

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British set-top box vendor Amino has acquired Finnish multiscreen TV platform provider Booxmedia, for USD 11.7 million. Booxmedia claims to offer an off-the-shelf, cloud-based multi-screen TV platform that offers content recommendation, analytics, targeted advertisement, cloud-based remote control and, payment and provisioning systems.

Our Analysis:

Organic growth is becoming increasingly difficult for set-top box vendors, with a saturating pay TV market impacting demand for STBs compounded by fierce price competition between vendors. Amino is weathering this well from a bottom-line perspective. It has one of the best gross margins in the industry as a percentage of revenue: 46% in 2014, growing year-on-year from 28% in 2011 by focusing on cost management. However, Amino’s strategy remained focused on supplying STBs mostly for Telco IPTV services, has yielded a relatively stable top-line with revenue oscillating around an average of USD 56 million between 2011 and 2014. This performance is largely in-line with the value of IPTV STB market of the period. To address this, Amino has attempted to drive growth by improving its products’ attractive by integrating YouTube, an app store and developer kits but has seen little boost in revenue.

In a similar strategic vein to vendors such as Arris and Tivo, who have recently sought to improve their position by diversifying their product offering through acquisition, Amino anticipates that its new multiscreen product and its recent expansion into home monitoring solutions will bring growth. To an extent, Amino’s strategy is logical; both of these products are growing in relevance to operators, particularly if we look at Amino’s existing customer base. A large segment of its revenue comes from US-based Tier-2 and 3 telcos, lacking engineering resources but want to deliver solutions like multiscreen and home monitoring to compete with the offerings of major TV operators such as AT&T, Comcast and Verizon. Beyond its existing clients, by fully implementing the functions of its multiscreen platform into its boxes, Amino could offer a complete, integrated TV solution to potential new telco customers. Ultimately, this acquisition will provide Amino the opportunity to expand its addressable market beyond its current telco base. It will enable Amino to offer a multiscreen solution to Tier-2 and 2 cable and satellite operators, as well as broadcasters and content owners looking to go direct to the consumer, diversifying its client base.

The addition of a multiscreen solution into Amino’s product lineup, alongside its bottom-line performance could make it an attractive acquisition target itself; perhaps for a broadcast-focused STB vendor, or broadband CPE vendor looking to enter into the IP-video delivery space.

 

Geography
Finland UK
Organization
Amino
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