N2 Broadband Steps Out With Deals and Financing

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After plugging away in near secrecy for about 15 months, N2 Broadband emerged from the fog earlier this month with several deals and an undisclosed amount of cash in hand.

Hoping to induce wider video-on-demand deployments, N2 Broadband provides equipment designed to send and capture high-value content digitally and securely over satellite and land-line connections.

In Demand and Warner Bros. Technical Operations — which handles the physical distribution of Warner Bros.' film and television properties — have already agreed to deploy the start-up's MediaPath system.

That system uses a pitcher-catcher approach common to the digital delivery of video-on-demand titles and other copyright-sensitive content, said N2 Broadband president Reggie Bradford, the former chief marketing officer of WebMD Corp.

MediaPath is comprised of a web of components, some of which are based with the content provider and others with the cable operator.

The content provider would employ MediaPath's Creation Tool, Pitcher and Manager equipment to assemble and deliver encrypted films and other content. On the other end, the cable operator's MediaPath Catcher would grab that data, decrypt it and pass it on to the VOD server.

As all of that happens, the content would be shielded from prying eyes via secure satellite links or land-based virtual private networks.

That process will save time and money, said In Demand vice president of corporate communications Joe Boyle, noting that Time Warner Cable systems are already wearing N2 Broadband's digital catcher's mitts. He said In Demand's other MSO partners — such as AT&T Broadband, Comcast Corp., Cox Communications Inc., Charter Communications Inc. and Insight Communications Co. — are expected to follow suit.

Before N2 Broadband, In Demand typically obtained VOD titles from studios on digital linear tape, which was encoded on-site and sent overnight, or "bicycled," to cable operators. Today, the process can move much faster, since In Demand is armed with the ability to zap encoded, digital titles via satellite.

"The beauty of this is: Once it's encoded, it's done," Boyle said. "The process provides enormous efficiencies."

At the same time, the system's tight security measures could provide more negotiating leverage with studios that are hesitant to release VOD titles in earlier windows, he predicted.

N2 Broadband generates its revenue from product sales, as well as consulting, network monitoring and content-hosting services.

What N2 Broadband is not is the content gatekeeper. "We provide the system, but we'll help [partners] with the service," Bradford said.

For the time being, those partners will likely come from within the cable industry.

"Our focus is on the cable operators," Bradford said. "We think that's where the opportunities are in the near-term, and that's where our background and expertise is."

Several members of the company's executive team hail from Scientific-Atlanta Inc., including company CEO Jack Miller, vice president of engineering John Vecchio and principal architects Tim Addington and Darryl DeFreese.

On the money front, N2 Broadband said it closed a private round of financing led by AOL Time Warner Ventures and personal contributions from Primedia Inc.'s Paul Kagan; The Convex Group CEO and former WebMD Corp. CEO and founder Jeff Arnold; and Gleacher & Co. chairman and CEO Eric Gleacher. Arnold and Gleacher have joined N2 Broadband's board of directors.

Bradford declined to say how much cash was raised, but said the transaction marks the company's "first big round" following an earlier angel investment.

N2 Broadband, however, isn't the only company touting the ability to transmit movies and other copyright-sensitive materials for video-on-demand applications.

Global Crossing Ltd., for instance, is leveraging a portion of its recently completed 100,000 route-mile, fiber-optic network to deliver, manage and store games, music, TV shows and Hollywood films. Unveiled in April, Global Crossing's media and entertainment "extranet" stretches across five continents and reaches more than 200 major cities.

DirecTV Inc. and The FeedRoom Inc. are among Global Crossing's early anchor tenants.

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