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Rovi – the secret power behind Internet TV

by Scott Bicheno on 10 March 2011, 12:44

Tags: Rovi (NASDAQ:ROVI)

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There were a fair few big Internet TV announcements last year, most prominently Apple TV and Google TV. On top of that the web-based video-on-demand industries are growing and consolidating, as indicated by the acquisition of LoveFilm by Amazon earlier this year.

But arguably the most significant acquisition of all is that of Sonic Solutions by Rovi. And if you're now scratching your head and thinking "I've never heard of either of them," don't worry - that's sort of the point.

You see, Rovi wants to be not just the backbone but the skeleton and internal organs of the internet TV world. As Apple and Google have shown with Internet TV efforts that have been hesitant and abortive, respectively, bringing the Internet to the telly in a useful, intuitive and mutually beneficial way is not easy. Perhaps what's needed is for these tech giants to control their corporate egos, stop being dilettantes, and leave it to the pros.

And that's how Rovi has positioned itself: the one-stop shop for Internet TV, covering everything from content deals, to metadata, to delivery. But it doesn't want to be a consumer brand, at least not yet. The Rovi model is to provide all these services to whoever wants them as a white-label solution to be repackaged as the customer pleases.

Soon after the Sonic acquisition was completed we spoke to Dave Jordan - marketing VP at Rovi - to get an idea of what this acquisition means to the company and the market. "This brings some more pieces to us," said Jordan. "Now we can have an even more comprehensive interaction with customers. For us it's really complementary; the two companies have very similar customers."

In essence Jordan was saying there's no change in strategy, no new direction, but now Rovi can offer its customers even more Internet TV and video goodness. For example, among the things Rovi now owns is the DivX video format. "DivX is about being able to play content on any device," said Jordan, illustrating that this acquisition is as much about the where, as the what, of Rovi's offering.

The two diagrams below show how Rovi now subdivides its offering and, following the Sonic acquisition, it's pretty comprehensive. Of course the biggest tech companies will want to develop their own Internet TV solutions rather than pay a third party to do much of it for them. But if Rovi plays its cards right it could, as ARM has done in the mobile chip space, make using its solutions so much more efficient than starting from scratch that it becomes the only viable option.




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