Google has scooped up yet another Internet-based innovator. This time, the search giant acquired a company that creates digital rights management software that Google needs to connect the dots as it moves deeper into the streaming-video world. Terms of the Widevine Technologies acquisition were not disclosed.
Google is betting the on-demand video market will post more growth. Mario Queiroz, vice president of product management at Google, said streaming video is rapidly becoming the standard way to find content to watch right away. He pointed to YouTube -- which gets more than two billion views daily -- as well as the growing popularity of subscription services and tablet devices.
"Content creators and distributors are making huge strides in bringing us content in this way, but to do so, many require high-quality video and audio, secure delivery, and other content-protection and video-optimization technologies," Queiroz said. "With these tools in place, they can easily and effectively give you access to the rich library of content you want to watch, with the immediacy you've come to expect."
Widevine Casts Wide DRM Shadow
For all those reasons, Google acquired Widevine. Google liked Widevine's diversity. The company has worked with the studios that create popular TV shows and movies, cable systems and channels that broadcast them online and on TV, and hardware manufacturers who allow streaming.
"By forging partnerships across the entire ecosystem, Widevine has made on-demand services more efficient and secure for media companies, and ultimately more available and convenient for users," Queiroz said.
Michael Gartenberg, an analyst at Gartner, sees the acquisition as a good move. DRM, he noted, has been an issue for the Android platform. Netflix, for example, recently said it has not issued services for Android because there's no central DRM it's comfortable with.
"Acquiring Widevine makes sense for Google," Gartenberg said. "One of the lessons Google has learned is if they want to do business with content providers, they have to figure out how to play by some of those rules."
New Revenue Stream
Beyond Android-based smartphones, YouTube and Google TV also stand to gain from the acquisition. What's more, with the Widevine buy, Google is picking up a new revenue stream.
Queiroz said Google will maintain Widevine's agreements with existing clients and continue taking on new clients. Hundreds of clients, including AT&T, Netflix, Best Buy, Samsung, NBC.com, Blockbuster and DISH Network, use Widevine's multi-platform DRM and video-optimization solutions. Widevine also has more than 60 patents for content-protection and video-optimization technologies.
"With the recent growth of Internet video and network-connected devices, it is increasingly important for technology to provide consumers with the capability to watch what they want, when they want, where they want," said Brian Baker, CEO of Widevine. "By working with Google, we are even further committed to the consumer Internet video experience and to the needs of content owners."