NDS, the News Corporation subsidiary that supplies digital television technology to platforms including Sky and DIRECTV, has acquired CastUp, a company that specialises in the management and delivery of audio and video over broadband. It will accelerate the development of broadband-enabled set-top boxes.

NDS will acquire 100% of CastUp Inc for $11.3 million in cash plus additional payments to employees and senior management. CastUp will continue to operate as a separate unit within NDS under its current management team, headed by its chief executive, Avi Ostfeld.

Through its wholly owned subsidiary in Israel, CastUp currently provides broadband audio and video services mainly to Israeli media companies. The CastUP Global Network service is a content distribution network that serves hundreds of millions of streams per month, with servers based in the United States, Europe, Russia and Israel. The core of the platform is a product known as Nile.

NDS says the acquisition of CastUp will provide it with substantial experience in online video delivery and give it access to technologies to help its current pay-TV customers expand their broadband video distribution services as well as attracting new customers. It will help NDS develop new enhanced services and applications for broadband-enabled set-top boxes.

“We are very excited about the possibilities for new and comprehensive solutions for the delivery, management, and control of online media assets,” said Dr Abe Peled, the chairman and chief executive of NDS. “We believe that NDS’ market-leading experience in securely delivering digital content, and our global presence will combine with CastUp’s proven technology to allow us to continue to enhance the businesses of our media and entertainment customers.”

The latest models of Sky set-top boxes include a network connection and BSkyB is emerging as a leading provider of broadband in Britain. Adding broadband delivery to its broadcast services is an obvious next step.

BSkyB last week announced the acquisition of Amstrad to enable it to bring some of its set-top box design and development in house. The Office of Fair Trading says it will examine whether the deal would result in a “substantial lessening of competition”. It could decide to refer the matter to the Competition Commission which could theoretically block the acquisition of Amtrad which is due to be completed later this year.