M+E Connections

NeuLion’s purchase of Saffron Digital will create a merged digital video service provider of more than 600 employees in North America and Europe, with a strong presence in multiple forms of on-demand content, covering movies, sports and other entertainment, executives at the companies told the Media & Entertainment Services Alliance (MESA) June 6.

The acquisition creates a “very innovative and very strong” TV Everywhere (TVE) solution for clients, said Saffron CEO Jason Keane. As a result of the purchase, NeuLion “will now be moving into not only” the subscription VOD (SVOD) market, but also the electronic sellthrough (EST) market, where Saffron has become a major global player in UltraViolet deployment, he said.

To date, much of NeuLion’s content delivery has been in the sports sector, said Chris Wagner, EVP and co-founder of the company. “We didn’t do a lot of electronic sellthrough because we do a lot of sports,” which is “about live streaming: there’s really no electronic sellthrough in sports,” he said. “Now we’ve got a platform that allows us to address a broader market. So, if you own movie content, if you own entertainment content, or if you own sports content, the NeuLion platform can support all three types of content,” he said. An added plus is that a growing number of services want to provide a combination of content, he said. “If I can offer you movies and sports, you’re going to be more likely to sign up,” he said.

Publicly-traded and Plainview, N.Y.-based, NeuLion is a technology product and service provider that specializes in the broadcasting, distribution and monetization of live and on-demand digital video content to internet-enabled devices. Its major customers include the NBA, NFL, NHL and consumer electronics companies LG Electronics, Panasonic, Samsung and Toshiba.

London-based Saffron, a Cinram media group company prior to NeuLion’s purchase, has been working with Hollywood studios (all six majors, as well as Lionsgate), along with other entertainment content owners, to develop and deliver OTT VOD digital services globally for the past decade. Saffron’s platform supports advanced implementations of subscription SVOD, EST and ad-supported VOD. Each of those business models are major requirements for owners and rights holders of entertainment content who want to roll out new OTT digital services.

The “combined synergies of both companies can transform OTT challenges faced by owners and rights holders of live and on demand content and turn them into solutions by,” among other things, supporting all video formats up to 4K Ultra High-Def, NeuLion said in its news release announcing the purchase. The merger will also reduce project complexities for all content rights holders of existing and new OTT services by decreasing the number of vendors involved in their projects; significantly decrease time to market for new OTT and TVE services in comparison to other technology options; offer complete streaming and download merchandizing support for all business models, protected with digital rights management; provide market-leading pricing and promotion tools; enhance the viewer experience with seamless delivery of live and on demand content to any device with personalized apps for viewers; and enable superior customer and operations support, end to end, coupled with a real-time OTT Dashboard to monitor, by device, viewer activations and engagement, the company said.

“The OTT video market is accelerating rapidly in the U.S., Europe and other parts of the world, and represents a large and growing addressable market for the combined company,” Roy Reichbach, NeuLion CEO and president, said in a statement. “The integrated company can offer owners and rights holders of sports and entertainment a complete end to end solution for both live and on demand content that is a clear market leader.”

There won’t be any job cuts at either company as a result of the purchase, Wagner told MESA. “We offered all 50 employees” of Saffron a job at NeuLion, he said, adding that his company’s U.K. office will, therefore, expand from only 10 employees to 60. NeuLion’s business until now has been largely focused on North America, but it opened a London office in 2008 and expanded the size of that office when it bought DivX last year, he said, adding: “We’ll continue to invest and build out our European platform based in London for sales, marketing and operations,” he said.

The Saffron name is being dropped. But Keane is a “key executive for us and he will be leading our growth in Europe out of our London office,” Wagner said. The purchase price of the all-cash asset transaction wasn’t disclosed.