Arris-Charter J.V. Nabs ActiveVideo for $135 Million

Arris to Own 65% of Joint Venture, Become Sales Arm for CloudTV
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Arris and Charter Communications said they have acquired ActiveVideo, a provider of cloud-based interfaces and apps, for $135 million via a new joint venture.

Under the deal, Arris will own 65% of the J.V. and will serve as the sales channel for ActiveVideo’s CloudTV platform. The deal is expected to close in the second quarter. Jeff Miller will continue to lead ActiveVideo as CEO, the companies said.

Charter has been leaning heavily on ActiveVideo for a new cloud-based interface that can run on the MSO’s new hybrid IP/QAM Worldbox, as well as older QAM-only boxes. Charter aims to implement a similar strategy for systems that it will gain from its proposed acquisition of Bright House. The acquisition will shore up Arris’s position at Charter and tighten its technology ties to the MSO.

ActiveVideo’s other customers include Cablevision Systems, Liberty Global, Deutsche Telekom, Time Warner Cable, J:COM, Philips, and Roku. Among that group, UPC Hungary, a unit of Liberty Global, is using ActiveVideo to deliver YouTube to older set-top boxes that do not speak IP. Comcast, meanwhile, has tested ActiveVideo's platform for a web-style VOD interface in Chattanooga, Tenn.

The Arris/Charter J.V. will also obtain ActiveVideo’s intellectual property, which includes 39 issued patents and 64 that are pending. ActiveVideo used those IP assets in its successful patent fight with Verizon Communications, which was settled in 2012

The exit is a long time in coming for ActiveVideo, which was founded in 1988 as ICTV (and renamed ActiveVideo Networks in 2008), and its chairman, Gary Lauder, who recently sold the patents of OnLive, a cloud-powered video gaming service, to Sony.

"This joint venture signifies Arris’s continued investment in advanced software solutions that will create value across the entire video ecosystem," said Arris chairman and CEO Bob Stanzione, in a statement. "We look forward to the untold opportunities our extended partnership with Charter will spawn as we march together into the future. Arris and Charter are paving the way for an all IP network migration and enabling the software-defined TV experience that will deliver the unified, next-gen content experiences that today's consumers demand."

"ActiveVideo's CloudTV platform is one of the enabling technologies behind Spectrum Guide. We have worked very closely with ActiveVideo on the development of this technology, and now, as a 35% shareholder, are uniquely positioned to support the continued innovation and marketplace adoption of ActiveVideo's solutions," added Tom Rutledge, president and CEO of Charter. "Today's announcement extends Charter's long-standing relationship with ARRIS, who continues to be a key provider of both infrastructure and consumer premises equipment. We are excited to be partnering with them on this acquisition and to be continuing our collaboration on next-generation platforms."  

“This joint venture gives us the ability to take ActiveVideo's vision to the next level by partnering with two industry forces such as ARRIS and Charter,” added Miller. “This is a great opportunity to extend the promise of ActiveVideo's solutions.”