Pay-television technology company NDS reported profits down by 56% in the last quarter on revenues down 11% at $182 million. Of this $98 million was for conditional access systems, down 19% from $121 million in the same period a year ago. Although NDS shipped more smart cards in the quarter than a year ago, the results apparently reflected volume discounts on the renewal of contracts with large customers and differences in when revenues were recognised.
“The worldwide economic uncertainty has not been reflected in our operational results or outlook,” said chairman and chief executive Dr Abe Peled. “Our project pipeline remains strong.”
There are now just under a hundred million devices deployed with NDS middleware, up from 70 million a year ago, and 14.5 million digital video recorders based on NDS technology, up from 8.8 million.
NDS is pursuing opportunities in emerging digital television markets such as India. There he said there was a rising middle class of some 80 million homes that could afford large screen televisions. He said that there will be a rush to serve them over the next five years and that although there are many players in the market, each could expect to gain some 5 to 7 million subscribers.
He told analysts that in addition to traditional platforms in both existing and developing markets, NDS is also involved and investing in preparation for the changing media landscape that is being reshaped through the ubiquity of broadband access of television on the personal computer, mobile and portable devices.
He said the acquisition of CastUp, a small company specializing in the distribution of video over the internet, would provide substantial know-how and experience in this field.
The acquisition of Jungo, a company that produces software for residential gateway routers, has helped to engage traction with telcos. Specifically, he said that Verizon “did not know NDS from a hole in the wall until the acquisition of Jungo”. All Verizon residential gateway routers have Jungo software and a number of other large telecom operators also specify the software. Jungo recently announced a system to enable faster channel changing in internet protocol television networks.
Currently a majority owned subsidiary of News Corporation, which in turn is the main shareholder in customers such as BSkyB, NDS is in the process of becoming a private company, leaving News Corporation with a 49% stake.