Market Insight

Neulion acquires Saffron Digital

June 20, 2016  | Subscribers Only

Merrick Kingston Merrick Kingston Associate Director, Research & Analysis, Digital Media & Video Technology

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OTT solutions provider NeuLion is set to acquire Saffron Digital. While the value of the transaction is not known, it is clear that the deal will allow the two technology-and-services companies to fill gaps in their respective solution portfolios.  

Our Analysis:

In the context of AT&T’s acquiring Quickplay Media, the Neulion-Saffron deal serves as another example of the consolidation that is taking place in the OTT solutions segment.

For Neulion itself, the company’s purchasing rationale is best understood from a positioning, product, and client-strategy perspective.

With the exception of its relationships with Sky New Zealand and Canada’s Rogers, Neulion has built a business around sports leagues’ and channels’ desire to reach consumers directly. The company’s strength revolves around servicing live, mass-audience OTT delivery. UFC, the Tennis Channel, the World Surf League, Euroleague Basketball, Univision Deportes, and China’s CNTV all belong to the Neulion family.

Neulion does not, however, uniquely occupy this mass-audience market niche. The firm lost a major contract with the NHL to MLB Advanced Media, while Quickplay has undeniable credentials in live streaming and pan-national distribution. In acquiring Saffron, Neulion is not attempting to out-compete its direct rivals. This acquisition is a diversification strategy; Neulion is attempting to move laterally.

Saffron has no position whatsoever in live streaming, but is one of the few solution providers to have specialized in non-live distribution, offline viewing, and UltraViolet-compliant EST. With a client roster that includes Japan’s KDDI and France’s Carefour, Saffron will allow Neulion to play in two, very distinct sandboxes – the live as well as the on-demand segment. Considering that the digital media space is characterized by its long, left-tail of transactional and ad-supported VoD services, this deal looks like an excellent strategy for pursuing a new set of opportunities across a new set of digital media actors. 

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