Private Debt ·

Pause. Play. The Smart TV Industry

Bandar A. Al Omran

Bandar A. Al Omran

VICE PRESIDENT

Based on the strength and sustained global growth of the smart TV industry, we have identified Vewd as a dominant market player in this space and attractive for income-oriented portfolios.

Strong Demand for Software Solutions

As consumer demand for content on connected devices booms, smart TV makers are increasingly in need of software solutions to provide slick streaming video services and outstanding user experience. According to a recent International Data Corporation report, two key elements required to support the expansion of the smart TV market will be the software ecosystem and the ability of the operating system to connect to other devices in the household.

Pioneering Smart TV Solutions

In 2007 Vewd pioneered the first smart TV with Philips, establishing the company as a market leader and founding member of the smart TV revolution. Vewd is now a leading smart TV operating system with over 15 years of experience in the OTT and connected TV device industry.

Today Vewd provides custom engineered middleware solutions to smart TV makers such as Sony, Vestel and Philips and set-top box makers such as Tivo, Arris (Motorola), Sagemcom, and Cisco. This software is already deployed in every Sony Bravia TV (including Android TV’s), enabling HTML5 based apps such as YouTube, Hulu and BBC iPlayer to function.

Source: Gos Reports

Stable Revenue Streams

Vewd generates stable cash flow returns with 70% of the company’s revenue based on a licensing model to TV and set-top box makers. This is typically a minimum of 2-3 years for new contracts with royalty-based revenues. After the minimum period, contracts renewal rates have been at a historical retention rate of 95%.

Dominant Market Position

Vewd’s distinguished global reputation and market dominance makes the company an attractive and reliable target for a private debt investment strategy.

Vewd’s market share of the non-proprietary market outside of China currently stands at 55.0% and over 50 of the world’s leading pay TV operators currently use Vewd products. This gives Vewd close to ten times the market share of its primary competitors, Access and Espial.

40 million devices per year are currently shipped with Vewd SDK (software development kit), with over 100 million devices shipped with their embedded software over the last 3 years.

While open source software can be used in place of Vewd, significant work is required to optimize software for the hardware architecture of TV’s and set top boxes. Vewd thus has virtually unrivalled dominance of the fast-growing market for OTT and hybrid TV solutions.

Source: Market Decipher

Portfolio Construction

Vwed is part of our thematic play on technology and was structured as a private debt position, as part of our Capital Yield Program.

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