ActiveVideo Networks to Acquire Avinity Systems

--Companies Say They Have Similar Interactive TV Philosophies, Complementary Technologies

At the ANGA Cable show in Cologne, Tuesday, ActiveVideo Networks (formerly ICTV)--a San Jose, Calif.-based interactive television company which offers a platform that it bills as intelligently streaming both traditional and Web-based content to digital set-top boxes and Web-connected CE devices and as combining the personalized, dynamic, socially connected experience of the Web with the quality, immediacy and remote-control navigation that end-users expect from television--announced that it has reached an agreement to buy Avinity Systems, a smaller Dutch company whose platform offers similar capabilities to ActiveVideo's own--though through technologies which ActiveVideo claims are largely "complementary" rather than duplicative. ActiveVideo is billing the acquisition as "bringing together the two leading providers of cloud-based interactive TV platforms and applications, and expanding the reach and availability of the Web-based user experiences that are redefining interactive television."

According to ActiveVideo, the Avinity acquisition will strengthen its technology and application offerings, and create a "global leader" in the market for delivery of cloud-based services to TV's. The two companies claim that, between them, they will have deployed interactive TV services to over five million homes around the world by the end of 2009: their combined customer base announced to date includes Oceanic Time Warner Cable and Grande Communications in the US; Tele2 in Sweden and Reggefiber in the Netherlands (both Avinity deployments); and PCCW in Hong Kong. ActiveVideo also claims that the acquisition will significantly expand its content relationships and middleware and infrastructure integrations. "The two companies were pursuing the same vision on different continents," ActiveVideo Networks chairman, Gary Lauder, said in a prepared statement. "Fortunately, their strengths and technological assets are very complementary. Due to that, and the Avinity team's high caliber, we expect everyone to be retained and to be a vital part of our global expansion."

ActiveVideo and Avinity say that they have both consistently advocated that the future of content delivery--including VOD navigation, Web-based video, interactive advertising and other services--will be driven by server-based technologies. Both companies' platforms employ an ultra-thin client in the set-top box to pass viewers' keystrokes to servers in the network; the servers create compressed video streams in response to user interaction and unicast them back to the home over IP or cable so that they can be decoded and displayed by the set-top. When the ActiveVideo platform is combined with Avinity's flagship RenderCast platform, the companies say, the integrated solution will be capable of delivering Web-like personalization and interactivity to a worldwide TV audience through legacy and next-generation set-top boxes and through broadband-connected devices.

The acquisition will see ActiveVideo relocating its European operations from the UK to Avinity's headquarters in the Dutch city of Hilversum (near Amsterdam). Avinity director, Ronald Brockmann, will become managing director of ActiveVideo Europe. ActiveVideo says that, by enabling it to transform the former Avinity into the core of its European operation, the acquisition is consistent with its philosophy that local knowledge and experience are necessary in order to create interactive TV applications which appeal to audiences that are increasingly requiring their content to be localized and personalized. "We have always been impressed with Avinity's technological progress, philosophical approach and marketplace traction in Europe," Jeff Miller, president and CEO of ActiveVideo Networks, said in a prepared statement. "Combining their people and technology portfolio with our own enables us to significantly increase our deployment momentum to European markets. The combination creates a team with global reach and local experience that is unparalleled in the delivery of stream-based interactivity." Added Avinity's Brockmann: "ActiveVideo has been a leader in anticipating the media industry's adoption of cloud-based interactive services. Ultimately, both of our companies recognized that we could do more for service and content providers, advertisers and consumers by bringing our very complementary capabilities under a single roof." (Note: For more on this story, see [itvt]'s interview with Jeff Miller and Ronald Brockmann, published today on