OTT Firm Cinedigm to Buy Tech Developer, Form Indian Division
U.S. OTT company Cinedigm (NASDAQ:CIDM) has announced today it has reached an agreement to acquire tech company FoundationTV, a developer of direct-to-consumer streaming technology, artificial intelligence, machine-learning, and data analytics platform company.
Founded in 2013 by a team of computer and data scientists from Apple, Oracle, NEC, and Yahoo, with extensive expertise in streaming media, big data, AI, cloud, and distributed systems, the Silicon Valley and India-based company built the FoundationTV streaming platform with a focus on enabling highly personalised streaming services that can operate on a global scale. The company co-developed the Matchpoint technology platform that currently powers Cinedigm’s portfolio of streaming channels.
Cinedigm plans to tightly integrate the FoundationTV and Matchpoint technology platforms, and their respective software engineering teams, into a new Indian-based division, Cinedigm India. The new division will be based in Kolkata, India and will serve as the Company’s engineering, research and development hub for video streaming technology. As part of the acquisition, FoundationTV’s engineering team will join Cinedigm and will be responsible for further developing and enhancing the combined platform’s state-of-the-art capabilities.
In addition to enhancing and extending Cinedigm’s streaming technology platform, the Cinedigm India team will also begin development and planning for a new, branded global “umbrella” service that will showcase Cinedigm’s portfolio of more than 20 branded streaming channels and tens of thousands of hours of video content. The Company plans to enable subscriptions individually, or with multiple Cinedigm services under one affordable bundle, and will offer them for purchase directly from Cinedigm, in App Stores across the streaming ecosystem, as well as through select distribution partners around the globe.
The fully integrated platform technology will also be used to support the Company’s existing portfolio of branded streaming channels while enabling Cinedigm’s aggressive streaming acquisition roll-up strategy, exemplified by the Company’s recent acquisitions of The Film Detective, Fandor and Screambox. The platform will also be made available commercially to select Cinedigm partners and customers.
Cinedigm India will also be tasked with leveraging Cinedigm’s current roster of streaming channels and content to build new experiences for the entire South Asian market, the second largest in the world with an estimated 800 million streaming users monthly.
FoundationTV’s flagship streaming platform is built to withstand massive scale of up to 100 billion streaming events per day. By self-optimising cloud-based computational and storage resources, the platform provides incredible streaming performance at scale with extremely low infrastructure costs.
Additionally, FoundationTV has also developed a proprietary AI-based recommendation engine that enables highly dynamic personalised experiences, maximizes subscriber engagement and ensures a high-quality user experience. Moving above and beyond simple content recommendations, the company’s technology automates the personalisation of a user’s entire streaming experience – recommended media, genres, personalised search, contextualised content, dynamic programming, and more.
FoundationTV has also developed an advanced, scalable data intelligence platform that automates subscriber engagement, analyzes and refines a streaming service’s Quality of Experience (QoE), improves content recommendations, optimises content programming and user acquisition costs, and provides extensive subscriber churn management.
As part of the acquisition, FoundationTV Founders Sudipta Ghorui and Sudeept Bhatnagar will take on leadership roles and jointly oversee the Cinedigm India operations.
“As the media business rapidly shifts to highly personalized, direct relationships with consumers, the acquisition of FoundationTV’s comprehensive streaming technology platform gives Cinedigm the end-to-end technological capabilities to compete with anyone in the industry,” said Chris McGurk, Chairman and CEO of Cinedigm. “This will accelerate our enthusiast channel roll-up strategy and build an ‘umbrella’ channel for our brands and content while also giving us a major foothold into the booming streaming business in India and all of South Asia, among the most important and fastest growing streaming markets in the world. We are excited to welcome the entire FoundationTV team to the Cinedigm family.”
“With the completion of this acquisition, Cinedigm now has the proprietary technology to compete with the largest streaming services in the industry and also an even more compelling competitive advantage as we accelerate our strategy of growth through acquisition,” said Erick Opeka, Chief Strategy Officer and President of Cinedigm Networks. “Combined with Matchpoint, FoundationTV will enable us to dramatically scale up our acquisitions into a common infrastructure, dramatically reduce technology costs, while providing a cutting edge, personalised experience on par with, or better than, the leading streaming platforms in the industry.”
“We are excited to become a part of Cinedigm in taking the next leap redefining and transforming the streaming experience for consumers, scaling on a global footprint with Cinedigm content and building on our intelligence driven cloud-native streaming technology platform,” said Samrat Ganguly, Founder of FoundationTV.
The FoundationTV transaction is expected to be accretive to Cinedigm’s earnings within the first twelve months due to associated cost savings associated with Indian operations, additional cost improvements related to the combination of Matchpoint and FoundationTV, and revenues associated with 3rd party commercial licensing of the technology.
The acquisition is subject to completion of definitive documents and satisfaction of any closing conditions.
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