Market Insight

Kaltura acquires Tvinci

May 09, 2014

Tom Morrod Tom Morrod Research Director | Consumer, Displays, Media, Security & Telecoms

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Online video platform provider Kaltura has acquired Tvinci, a global provider of content management and personalization for OTT video service providers. Tvinci’s customer base spans the Latin America, EMEA and Asia Pacific regions with major customers like Eutelsat, Mediacorp, Liberty Global, Solar Entertainment and Yes; while Kaltura has also an established global customer portfolio which includes HBO, ABC, Warner Brothers, Paramount, DirecTV and Turner. Tvinci currently has more than 60 employees that will be absorbed by Kaltura, while its management team will join Kaltura’s. Further details regarding the deal have not yet been disclosed.

Our Take

Following the award of $47 million of venture funding capital in February 2014, Kaltura has had money available for acquisition. Kaltura’s open-source video platform technology is currently positioned mainly into three large industries: Education, Enterprise and Media and Entertainment (M&E). With Tvinci a media-focused company, this purchase is clearly primarily intended to boost Kaltura’s M&E division.

Kaltura’s focus within the Media and Entertainment industry has previously been directed mostly towards providing a platform for managing and viewing VoD assets on multiple devices, while on the other hand, Tvinci’s attention is mostly focused into providing the back-end infrastructure that powers third-party (typically pay TV) aggregated OTT video services. Between Kaltura and Tvinci there is some product overlap, with both companies providing media asset management tools for video assets, such as searching, importing and uploading content. However, the two companies’ client lists reveal a disjunction in target market: Kaltura has primarily targeted the broadcasters and content producer markets, whilst Tvinci specialises in pay TV OTT distribution. The primary reason for the purchase is therefore likely less focused on a specific technology, and more focused expanding the customer base into new markets.

More generally, Kaltura’s desire for expansion through acquisition can be mainly explained by considering two things. Firstly, through targeting the growing OTT segment within the M&E industry, which is poised for further development, it is creating a larger revenue stream than offered through the other vertical markets it plays in. Secondly, Kaltura currently faces strong competition within the M&E market, which also has fast-growing companies such as Ooyala, Brightcove and Verizon Digital Media Services, all of which operate at a fairly similar size to Kaltura.

The acquisition of Tvinci’s is therefore an opportunity that might provide Kaltura with a better differentiation from rivals, and a stronger EMEA reach, available from Tvinci’s native Israel. Integrating Tvinci’s technology into its platform could also in the long-term enrich Kaltura’s options for the Enterprise and Education markets, as well with renewed personalization capabilities and improved services offerings. For Tvinci there is a clear chance to maintain its characteristics and further support and enhance its growth by creating an interesting blend of clients which comprises both pay TV providers and broadcasters, serving a large part of market chain.

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