Google has acquired Widevine, a specialist in online video encryption and distribution. Terms of the deal, which gives Google access to complementary media security and delivery technologies, were not disclosed. The acquisition enables Google to compete more effectively with Microsoft, Adobe and Apple in the distribution of digital media. It also means Google is more closely associated with media from the major studios and networks. Google recognises that if it is to be successful with premium programming it will need to offer rights holders greater assurance about the security of their media and do more to prevent the promotion of piracy. With Google busy buying up companies, informitv unpicks the strategic rationale for this particular acquisition.
Mario Queiroz, who is responsible for Product Management at Google, outlined the background to the deal.
“Content creators and distributors are making huge strides in bringing us content in this way, but to do so, many require high-quality video and audio, secure delivery, and other content protection and video optimization technologies. With these tools in place they can easily and effectively give you access to the rich library of content you want to watch, with the immediacy you’ve come to expect.”
“By forging partnerships across the entire ecosystem, Widevine has made on-demand services more efficient and secure for media companies, and ultimately more available and convenient for users.” He said that Google would continue to support existing customers and plans “to build upon Widevine’s technology to enhance both their products and our own”.
Brian Baker, the co-founder and chief executive of Widevine, said: “We are excited to have access to Google’s vast resources as we continue to improve our products, support our customers, and meet the future needs of consumers, content owners, service providers and device manufacturers everywhere.”
Widevine has raised over $65 million in venture capital and institutional funding over the last 11 years. Samsung and Liberty global were among those investing in the last round, in December 2009.
For Google, it is more than a technology acquisition and a patent portfolio. It will bring Google closer to major studios and television networks. Widevine is the studio approved security system for services like Netflix, and its European equivalent, LoveFilm.
Widevine is also a solution for pay-television platforms wishing to deliver TV Everywhere, across multiple platforms. It is a key to delivering premium programming to network connected television devices and displays. That includes the Google TV initiative, which many of the major networks have blocked from their online video services.
Unlike many competing conditional access, encryption, or digital rights management systems, Widevine is not limited to a particular hardware or software platform, and has been implemented across many different devices, from personal computers to tablets, smart phones and smart televisions.
While Google has generally backed and benefitted from an open internet, the lack of a widely accepted scheme for securing valuable video material has limited the opportunity to deliver premium programming using open standards. The acquisition of Widevine will enable Google to compete effectively with proprietary encryption schemes from Microsoft and Adobe.
With its previous acquisition of On2 Technologies for nearly $140 million, Google gained a video compression scheme, VP8, which is now part of the WebM initiative to provide an open multimedia container format for web video. YouTube already supports WebM for high-definition material and plans to enable it across all its videos, which now receive over 2 billion views a day, with more than 35 hours of new material uploaded every minute.
Google also has its eyes on the possibility of a movie streaming service. Its current offering is limited to independent movies but the company is understood to be hoping to attract major studios. There is also talk of plans to compete in the online music business, currently dominated by Apple iTunes.
One might speculate that Google could use technologies and intellectual properties acquired from Widevine to offer a robust encryption scheme for general use in online media. What online media need is the equivalent of the open yet secure protocols that enable credit card transactions, without a major processing overhead. The closest open solution is probably Marlin digital rights management architecture, but so far there is nothing that is simply built into the browser or operating system.
Widevine has also developed its own approach to adaptive bitrate video delivery, which Google has lacked since Microsoft, Adobe and Apple have developed their own, mutually incompatible approaches.
All this is very complementary to the Android and forthcoming Chrome operating system backed by Google. The Google TV platform will also benefit from a secure video solution, which may go some way to appeasing networks that have viewed it with suspicion.
Google TV has met with a mixed reception, to say the least, but the software platform is upgradeable and will allow hardware manufacturers to innovate. If it is as successful as Android has been in the mobile market, media companies will have to find ways to work with it, rather than attempting to block access to their services.
The movie and music industries have called on Google to do more to prevent piracy, not only by removing unauthorised material from its services, but also be limiting access through its search results.
In response to this, Google has also announced that it will be taking a harder line on copyright infringement. Specifically, it will aim to respond more rapidly to requests from rights holders to take down unauthorised copyright material. It will also promote previews of authorised material in search results, while blocking terms associated with piracy from appearing in autocomplete results and doing more to block adverts on its search results that provide infringing materials.
While it may be ironic or surprising to see Google buying a content protection company, it makes sound business sense, as the search company uses its market capital to acquire strategic assets. Google has made more than 40 such acquisitions this year.