US-listed search engine group Google, which owns the YouTube video sharing platform, has agreed to buy digital rights management provider Widevine Technologies from its venture consortium containing at least six corporations.
YouTube has more than 2 billion page views per day of its videos but has struggled to gain premium content compared to peer Hulu, which is backed by four strategic investors, including Disney and News Corp.
Brian Baker, chief executive of Widevine, said: "Through a combination of content protection and video optimization technologies, we’ve provided consumers with the highest quality Internet video experience while giving them freedom to watch on a variety of devices."
Mario Queiroz, vice president of product management at Google, said: "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.
"The Widevine team has worked to provide a better video delivery experience for businesses of all kinds: from the studios that create your favorite shows and movies, to the cable systems and channels that broadcast them online and on TV [television], to the hardware manufacturers that let you watch that content on a variety of devices. 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."
Widevine has raised more than $63m over the past decade, including $15m in December last year from Nasdaq-listed cable group Liberty Global, Samsung Ventures, the corporate venturing unit of Korea-based Samsung Group, and a third undisclosed corporation that was not Google a deal source said. The source added: "The exit was unanticipated altogether at [the] time of [Widevine’s] last round, and did not get onto Google’s radar until late summer this year."
Its previous rounds disclosed on its website included $16m in April 2006’s series C from computer network equipment maker Cisco Systems and Canada-based telecoms operator Telus. The two companies joined as new investors a consortium of venture capital firms: VantagePoint Venture Partners; Bear Stearns Constellation Ventures (subsequently renamed Constellation Growth Capital and acquired by investment bank JP Morgan’s hedge fund manager, Highland Capital Partners); Pacesetter Capital, a 40-year group investing in the growth of small business ownership for mostly African American and Hispanic entrepreneurs; and Phoenix Partners, which has reportedly closed.
These four VCs had provided $7.8m in February 2003.
Besides Constellation and Phoenix, the initial investors providing more than $11.5m to Widevine in 2000 were Japan-based strategic investor Dai Nippon Printing, Charter Ventures, a US-based VC backed by Hong Kong’s Cha Group, and angel investors.