Move Networks Comes to a Standstill
Andy Tarczon, Founding Partner, Corporate Development
June 30, 2010
Today saw the loss of another OTT player as Move Networks, the pioneer of adaptive bitrate technology, effectively halted operations. Most of the remaining employees were released this morning. Few will be surprised by the announcement - Move’s challenges have been well discussed since last year’s big management shakeup. For the last several months there has been no clear market direction communicated from the company. At the same time Move has lost several key clients (including Fox), seen their CDN-based revenue model erode and funding burn rate continue unabated. The most recent efforts to keep the company afloat saw Move only able to raise $3 million dollars of a reported $20 million round.
The company’s president, Roxanne Austin, was scheduled as a keynote speaker at the recent OTTcon East, but the company mysteriously canceled at the last minute. Obviously, funding difficulties were already at a critical juncture. We understand Ms. Austin has resigned.
So what was Move’s new direction? Early in 2009, Move acquired iNuk Networks. The UK-based company specialized in turnkey TV-over-broadband services for universities. Clearly, the idea was to combine Move’s market leading adaptive streaming technology with iNuk’s broadband TV service infrastructure to deliver a new PayTV-on-broadband solution. This was confirmed when Cable and Wireless announced a partnership with Move for the delivery of just such a service in September of last year. Usually, these types of deals come to fruition about a year after announcement, so one could imagine that service announcements were quite close.
In our testing we have found the Move adaptive technology to provide arguably the best quality video experience online. So we are hopeful that the technology will not disappear with the company. The use of On2’s VP8 codec as the basis of the streaming solution could position the Move technology as the high-quality webm solution announced by Google at their developers conference last month. Perhaps Google might consider adding it to their technology arsenal bolstering both the webm and Google TV initiatives in the process.
It all reminds me of something my colleague Colin Dixon covered in his report Broadband Enabled TV: Rise of the OTT Provider: "During this same time, TDG expects to see some spectacular failures. Companies that have positioned themselves as TV replacement services will learn that without a sufficiently robust content roster they simply cannot persuade consumers to "cut the cord." The companies that seek to augment existing PayTV services will gain ground and win a sizable share of the value-added revenue enjoyed by today’s cable and satellite TV companies."
UPDATE: Move published a press release late this afternoon indicating they were seeking "strategic alternatives." Marcus Liassides will oversee "day-to-day operations." Further, "to conserve cash on hand during this evaluation process, Move announced a reduction of its workforce."
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