Telstra sets up for multi-screen video future

By Duncan Craig | 20 June 2012

Telstra is getting serious about its IP TV play, the multi-device future, and the new world of the NBN.

The telco has surprised industry participants by leading an investment in California-based IP TV video platform company Ooyala, which has announced it has raised $US35 million. Founded five years ago by former Google executives, Ooyala counts ESPN, Victoria's Secret, and Yahoo! Japan as its customers and specialises in delivering cross-device video content.

The Ooyala deal is the brainchild of Telstra Media director Gary Traver, an American who was formerly chief operating officer at US-based video content aggregation and distribution provider Comcast Media Center. Traver will join the board of advisers at Ooyala, which is viewed as a new innovative entrant to the online video management space.

The deal also indicates that Telstra's media investments, technology, and business units are coordinated and accelerating their strategy to serve content across its portfolio of BigPond, T-Box, online and mobile platforms. That four-strong team includes Traver, business group head Deena Shiff, digital media head Rick Ellis, and its new director of content Adam Good.

Ooyala's expertise in delivering a pure IP (internet protocol) plaform, analytics, monetisation, and personalised video experiences has won Telstra over, as well as its ability to track performance and improve profits.

“Telstra's application ventures group has a lot of money to spend and the investment in Ooyala shows they are setting themselves up for the multi-screen future of tablets, mobile, television, and home gateway devices,” an industry insider said. “They are also getting ready for the onset of the NBN, and realise they need to be ready to operate on a network that they won't own.”

The telco currently uses a number of vendors to provide it with hosting and video management services to run its IP TV operations, including the Cisco Videoscape technology, which appears to be on the way out. Telstra had triumphed Videoscape earlier this year and has made a substantial investment in the digital TV and online content platform. Choosing to invest in Ooyala shows Telstra is now positioning for the multi-screen future.

Telstra's best performing service on its T-Box platform is its Big Pond movie offering, and the company is keen to leverage that offering and understand its customers better. Ooyala will help Telstra achieve that.

“The lines between online video and TV are blurring. Service operators everywhere are redefining their offerings for digital, multi-screen consumption,” said Jay Fulcher, chief executive officer of Ooyala.

However, the investment in Ooyala suggests Telstra will finally consolidate its multi-device video content platform into a single IP platform over time, while adding valuable analytics and personalisation features. A source close to Telstra would only say that every media company “is looking at the big pipe and consumer data, and trying to make sense of that data.”

Ooyala confirmed its analytics capabilities were a major part of the deal.

“Telstra’s current multi-device IPTV offerings will be enhanced through the integration of Ooyala’s online video technology and analytics,” Ooyala said. “Telstra will work closely with Ooyala on a smooth transition of services to allow its customers to reap the benefits of the new model.”

Ooyala also said that Telstra would act as a reseller of its platform, indicating that the telco sees a revenue model in helping corporates to distribute their video content.

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