Market Insight

Cisco, Permira and Synamedia: Market Signals Thus Far

September 05, 2018  | Subscribers Only

Merrick Kingston Merrick Kingston Associate Director, Research & Analysis, Digital Media & Video Technology

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Cisco’s Service Provider Video Software Solutions (SPVSS) segment, acquired by private equity firm Permira, has been redubbed Synamedia. Although the transaction is not final – we expect it to conclude during the second half of calendar-year 2018 – Synamedia has enumerated four solution areas that will define the firm’s focus: anti-piracy services; RDK, Android TV, and one-way set-top box middleware solutions; cloud DVR solutions; low-latency OTT and ABR streaming solutions.  

Our analysis

At present, the final composition of Synamedia's product portfolio remains partially opaque; we expect IBC 2018 to be revelatory in this regard. The firm's recent announcement nonetheless signals three important attributes of Synamedia's strategy and probable positioning.

First, the company appears to be playing to its strengths. Cisco’s SPVSS business – itself built atop NDS’ assets – is rooted in content security, as well as in set-top box middleware and UX software. Synamedia’s decision to embrace anti-piracy services is economically sensible, and competitively necessary. We expect the traditional conditional access market to shed 6% of its value year-on-year through 2021, and we expect value to shift from passive encryption toward anti-piracy services. The anti-piracy market, however, is no longer devoid of competitors. Conax, Irdeto, Nagra, Verimatrix, and Viaccess-Orca have all begun to offer watermarking, content tracking, and stream monitoring solutions. 

Second, the firm’s three-pronged approach to set-top software signals both a predisposition to technology agnosticism, as well an interest in catering to a large variety of operators. Synamedia’s offering Android TV, RDK, and unidirectional set-top software solutions represents a departure from the sale of monolithic, proprietary technology platforms, and enlarges the firm’s addressable market to include any pay TV tier, region, or ARPU environment. 

Third and finally, the firm’s recently announced strategy conspicuously omits one product area: analytics. We believe data-centric solutions to be essential to successful, long-term competitive positioning in the media solutions market. Whether Synamedia has yet to reveal its hand, is choosing instead to focus on areas where it already possesses considerable prowess, or is exploring analytics opportunities via partnership remains to be seen.

For additional analysis on the prior sale of Cisco's SVPSS business, please reference our latest Market Insight

 

Organization
Cisco Permira
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