Consolidation in the Streaming Media Sectors

While the streaming media industry continues forward at a rapid pace, somewhat impervious to the larger economic malaise that still hangs above our heads like Los Angeles smog, 2010 brought about a number of acquisitions that have the potential to reshape the industry footprint.

Here’s a brief synopsis of 10 acquisitions, rounded out by two changes in plan.

Akamai Acquires Velocitude

Extending cloud services to mobile devices is a valid strategy for Akamai, a content delivery network (CDN) that delivers content to consumers and businesses alike. 

That strategic approach led Akamai to acquire Velocitude in June 2010, as a precursor to what Akamai dubbed “a new generation of mobile services.”

“The majority of Web sites are not configured for optimal viewing when accessed by a mobile device, resulting in poor mobile usability,” Akamai’s press release announcing the acquisition stated. “Mobile end users often experience a site that is difficult to navigate, lacking robust functionality that end users have come to expect when accessing the same site on a personal computer.”

As a CDN for major corporations with intent to provide CDN services to more enterprise customers, Akamai saw a pain point for this disparity of mobile and desktop browsing. 

“[M]any companies either support an entirely separate infrastructure for their mobile sites or chase away customers by presenting sub-optimal mobile Web experiences,” the press release read. “By integrating Velocitude into our global network, we will be able to offer customers a way to leverage Akamai cloud-based services for mobile performance, as well as to translate Web sites into specific device-optimized experiences.”

Cisco Acquires ExtendMedia

In August, Cisco announced intention to acquire privately held ExtendMedia, a content management system provider. ExtendMedia has expertise in multiscreen video delivery. The acquisition offered a way for Cisco to strengthen its position in the IP video services game.

“Upon the close of the acquisition,” Cisco stated in its press release, “the majority of the ExtendMedia team will be integrated into Cisco’s Service Provider Video Technology Group. The ExtendMedia Sales and Professional Services teams will integrate into the Cisco Sales and Advanced Services organizations.”

According to Streaming Media’s own Dan Rayburn, the acquisition of ExtendMedia by Cisco was a competitive move that came with a premium price tag.

“[T]he deal is … worth about $80 [million],” stated Rayburn on his Business of Online Video blog. “While that number initially seems high since that would give Extend Media a 4–5x multiple on revenue, as it was pointed out to me, Cisco paid more than usual due to competitive reasons. Extend Media and thePlatform are really the only two companies in the space with carrier grade solutions, and with Comcast already owning [thePlatform], Extend Media was really the only other company for Cisco to acquire for which they had to pay more of a premium.”

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