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Internet TV in the spotlight

We are so accustomed to watching video clips over the internet that few people doubt that internet television will one day make TV sets obsolete. The reality, though, is that broadband networks were not created to cope with the amount of data that scenario implies.

The demand for data is already huge despite no-one really knowing how internet TV will take shape in the future. Most major broadcasters are experimenting with the format but it is currently a splintered marketplace full of YouTube video clips and BitTorrent downloads. Youtube is, of course, a phenomenon. The website hosts about 100m videos, with 65,000 new videos uploaded every day and more than 20m visits a month.

New entrants are starting to add weight to the market. Earlier this year, Apple released its Apple TV device, which is capable of streaming movies and video from the internet as well as accessing files from a home computer. More than a million people have bought the unit so far. Microsoft is also providing high-quality TV broadcasts over the internet straight into its customers’ Xbox 360.

Then there are specialist internet broadcasters such as Joost, created by the founders of the Skype. The service looks much like regular television (it runs full-screen, unlike YouTube) and it carries similar types of content, from National Geographic documentaries to music videos. It has already attracted more than 1m users around the globe.

But as momentum builds, there are increasing concerns that broadband networks will not be able to deal with capacity demands. Last month, the UK telecoms regulator Ofcom told the telecoms and media industries to put aside billions of pounds for new infrastructure. Ofcom head Ed Richards warned: “Today's access network, at some point in the future, will run out of steam as consumers demand faster and faster access. Very few people agree on exactly when this is going to happen but many people do agree it is only a matter of time.”

Over half the UK already has broadband and the average speed of these connections is 4.6 megabits per second - or more than 80 times the speed of the old dial-up connections. But it is not fast enough. Countries such as France, Germany, the US, Japan and South Korea have already started investing in networks that can deliver up to 100 megabits per second, enough for a dozen high-definition TV channels or lightning-fast downloading of music and videos. And, ridiculous as it sounds now, who knows whether 100 megabits per second will be sufficient for users’ needs in 10 years?

Informed guesses to this and many other media questions will be made at Essential Mediatech, a major industry conference taking place next month in London. Speakers at the event include: Ashish Patel, managing director of Intel Capital’s European operations; Reid Hoffman, chairman of LinkedIn; Ray Anderson, chief executive of Bango; and Katarina Skoberne, co-founder of OpenAd.

The conference takes place on November 20, at the BFI Imax, Waterloo, London. For further details and registration, go to: www.libraryhouse.net/mediatech

The Week's Deals

Fraud Sciences, the Israel-based company that has developed systems designed to cut down on credit card fraud, has raised $11m (€7.8m) from BRM Capital and RedPoint Ventures. Fraud Sciences has developed a technology that allows online retailers to verify the identity of buyers and accept genuine orders that may have been seen as suspicious in the past, thus enabling an increase in sales. The funding is to be used for late stage development and rapid deployment.

Perpetuum, the UK-based manufacturer of vibration energy-harvesting devices, has raised £5m (€7.2m) from Environmental Technologies Fund, Quester Capital Management and Top Technology Ventures. Perpetuum’s devices generate electric current from the energy of low levels of vibrations that are commonly created by industrial or transportation equipment. The company says that enough energy is generated to enable wireless transmission of large amounts of data. The investment is to be used to support the commercialisation of the technology.

ChromoGenics Sweden, the Sweden-based developer and manufacturer of products based on electrochromism, has raised $6m (€4.2m) from existing investors and Industrifonden. ChromoGenics has developed an electrochromic plastic foil that changes its transparency to light through electric voltage, and has applications in the eyewear, window and semi-static display industries.

CopperEye, the UK-based provider of data retention and retrieval products, has raised an undisclosed amount of funding from In-Q-Tel. In-Q-Tel is an investment company that identifies innovative technology to support the missions of the CIA and the broader US intelligence community. CopperEye's software is designed to help companies cost-effectively capture, store, and access selective transactions from tens- or hundreds-of-terabytes, whether the data is seconds or decades old.  CopperEye will use the investment to continue its expansion into the telecommunications, government, and security markets.

The Week's Exits

Traiana, the US and Israel-based financial software developer, has been acquired by London Stock Exchange-listed ICAP for $238m (€167.7m) in cash and $9m (€6.3m) in ICAP shares. Traiana provides global banks, broker-dealers, buy-side firms and e-trading platforms with products that automate post trade processing of financial transactions, a process traditionally performed manually. ICAP is a voice and electronic interdealer broker with an average daily transaction volume in excess of $1.5tr, more than 50 per cent of which is electronic.

Liekki, the Finland-based specialty fiber manufacturer, is to be acquired by nLIGHT, the US-based manufacturer of high-power semiconductor lasers. Financial terms of the deal, which is expected to close later this year, were not disclosed.

Mindquarry, the Germany-based developer of open source collaborative software, has revealed that it is to stop operating after being unable to raise further funding. The company had received seed investment in 2006 from Hasso Plattner Ventures.

People Moves

YCD, the Israel-based digital content delivery company, has appointed former DoubleClick president Barry Salzman as chief executive. Mr Salzman helped grow DoubleClick from a start-up to a company with $500m in revenue and more than 3,000 employees worldwide at the time he left. More recently he was chief operating officer at shopping comparison site ShopWiki.

WPA Mobile, the Denmark-based provider of mobility products for the utility, building and construction sectors, has appointed Per Pedersen as its new chief executive. Previous chief executive and co-founder Jens Davidsen remains at the company as a director. The company also announced further investment from Via Venture Partners.

Most Accessed Companies

MySQL, the Sweden-based open source database software company, has attracted a lot of attention this week. According to the company it provides the world's most popular open source database software, with more 100 million copies of its software downloaded or distributed throughout its history. Founded in 1985, the company said earlier this year that it was planning on going public, possibly by the end of the year. MySQL reported about $50m (€38m) in revenue for 2006, up from about $34m (€25m) in 2005.

Warwick Effect Polymers, the UK-based polymer synthesis company, has also attracted a lot of attention. The company recently announced a new round of funding led by The Mercia Fund and including Midven, Oxford Technology Management and Seven Spires Investment. The company is developing a series of speciality polymers for a range of industrial applications that have the potential to increase the activity and improve the safety profile of key medical therapeutics on the market and new medications under development.