TVN and Avail Media are merging to create a powerhouse in the distribution of digital media to multichannel video operators across North America, and eventually the world. The new merged company, whose name has not been determined yet, will provide content distribution to the largest and most recognized service providers in cable, telco, and DBS including Comcast, AT&T, DirecTV, and Verizon. TVN claims to be the “world’s largest television on-demand company” and Avail Media is a relative new comer, providing both on-demand and linear content to the telco community. Their new combined footprint will include 46 million penetrated homes and 120 million customers. The new company will be led by current Avail Media CEO Ramu Potarazu. The combined company will service 230 affiliates, 85 of which are current active Avail Media affiliates.
Avail Media chief operating officer Jon Romm tells Telecompetitor that “the multichannel video business is becoming increasingly complex. An independent third party who can manage that complexity on behalf of customers is our value proposition.” Romm says the new company intends to maximize its combined capability. “The combined TVN-Avail will have tremendous capability to process and distribute content. We’ve created an end-to-end content provider of digital media services, able to deliver on demand and linear content today with deliberate intention of also servicing the next generation of content distribution, video over broadband.” Avail’s chief marketing officer Brian Matthews tells Telecompetitor that the combined company has definite global intentions. “The vast majority of the combined company’s business – about 95% – is focused on North America. But we expect international markets, including Europe and Asia to increasingly represent growth areas for us.”
We asked Romm about the obvious competitive implications of the deal, since the new combined company will most certainly serve telecompetitors who compete in the same markets. “We’re sensitive to those competitive realities, but there is nothing we’re doing that creates differentiation for our customers over each other. It’s our customer’s responsibility to create differentiation in their respective markets. We’ll provide them compelling content,” says Romm. As far as competition to the new company, Comcast Media Center probably represents their closest pure competitor.
Looks like Potarazu, Romm, Matthews, and the other principals of this deal will be quite busy over the next few months. There’s a lot to work out, including picking back office systems and even settling on a name for the new firm. There’s that pesky little issue of profitability as well. Both companies are private and don’t reveal financials, but we suspect one motivation of this deal was to build scale and efficiency to help reach what has probably been somewhat elusive to date — profitability. This will be an interesting merger to watch over the next few months, as the world’s largest business-to-business distributor of digital media takes the stage. The deal is expected to close in the next few weeks.