There’s been a whirlwind of speculation since last night when a press release came out announcing that Connected Lyfe, one of UTOPIA’s newer providers, was being acquired by a then-unknown company called Hangman Productions. This wasn’t helped when an 8-K filing with the SEC came to light that showed Connected Lyfe as the purchaser of UTOPIA’s new video headend. It was pretty easy to assume the worst that the white-label video product would end and it might be a small step towards selling the network. After doing some digging and talking to both Todd Marriott and Chris Hogan at UTOPIA, it looks like that’s not the case at all. In fact, this is probably a really good thing all around.
For those of you who don’t know, Connected Lyfe was founded by Robert Bryson, an ex-VP of Move Networks. Move Networks is in the video streaming business and their stuff is pretty cool. It will dynamically adjust the bitrate of content you’re watching based on your current network connections and is used by both ABC and the LDS Church. Connected Lyfe counts a number of other ex-Move employees among their ranks as well as staff with a lot of IPTV experience. Their plan? To basically do all of that cool stuff with video that everyone’s been talking about since 1995 but hasn’t made happen.
It just so happens that in order to do that cool stuff, you need a high-speed network, a lot of customers to play with it, and a video plant. Joining UTOPIA solved number one and part of number two. They still needed a headend, so they made an unsolicited offer to UTOPIA to buy theirs. UTOPIA never wanted to be in the business of operating it anyway; they just needed a hedge against another Mstar situation where the only provider with video can dig into deep debt and hold UTOPIA over a barrel. From UTOPIA’s description, they got a pretty good price on the headend, eliminated around $13K per month in operating costs, and got a committment from Connected Lyfe to drop another $10K per month in upgrades onto it.
It’s not a free ride for Connected Lyfe, though. UTOPIA had three conditions on the sale. One, they have to keep providing white label video service to any provider that wants to offer it at a tightly-regulated price. There’s not going to be any Qwest-style nonsense where the wholesale rate is higher than their own retail rate. Two, any new services they develop on the network will have to be available to any white-label provider. If they figure out a way to let subscribers watch HBO on their phone, everyone gets a cut of that action. And three, if they fail to keep up their end of the deal or stay solvent, UTOPIA gets it all back with no interruption in service. All of these conditions were made to protect other service providers.
Really, it all makes sense. Connected Lyfe’s mission is to create the kind of crazy converged video product that has, up until now, only been a dream. Yes, we’re talking cell phone streaming. We’re also talking residential video gateways, something the FCC is trying to mandate from carriers right now. Such a device would stream video to any source in the home be it a PC, set-top box, DNLA-compliant TV, or iPad. You’d also be looking at the long-sought on-screen caller ID. What Connected Lyfe needs is a sandbox to play in to prove that the product and its models work so that they can then sell it to service providers. Sure, they’d have some of their own customers on the network, but that’s just a necessary part of testing it out. A customer using their stuff, billed by them or Crazy Carl’s Internet Service, is still a customer using their stuff and providing valuable data and experience.
So where does the Hangman piece fit in? Basically, it gives an independent film studio a distribution network and Connected Lyfe an infusion of more cash, so far as I can tell. In other words, the press release itself isn’t much news.
Does Prime Time Communications use their own head end out of St. George, which was in place prior to their acquiring Mstar and the construction of UTOPIA’s white label IPTV product? Did UTOPIA install an Avail-TVN system?
Yes, Prime Time uses its own plant. Mstar was using the one in Provo, but they got cut off because it wasn’t technically allowed by the contracts that were in place. The UTOPIA headend is what drives the white-label product (not sure what kind of system it is) and Veracity has been evaluating bringing its system to the party.
Veracity’s system being the one in Provo?
That’s the one. They’re already using it to (finally) pipe video to Traverse Mountain.