Telestream adds Popwire Tools to its Product Base

Telestream recently announced that it was acquiring Popwire from Sweden's Teleca, a national telecom provider. Popwire, which showed its first version of CompressionMaster at the IBC show in Amsterdam in September 2003, had several solid products that many compared to the potential of the early Anystream or Media Cleaner Pro products. The company was one of the first to embrace H.264 and a client-server system for the Macintosh platform that took advantage of UNIX on early Xserve servers.

Popwire had benefited from the financial umbrella of Teleca to mature CompressionMaster and its other products based on the CompressionEngine technology core to an enterprise-level solution. But the software-based company was probably also stifled by the need to focus on solutions that made sense to its parent company.

The Telestream acquisition allows Popwire to move back out on its own. The new company, a wholly owned subsidiary of Telestream, will be named Popwire AB.

Telestream, which made a name for itself with the ClipMail Pro digital content store-and-forward systems, has long since branched out into transcoding solutions based on its popular FlipFactory product line.

The move provides strategic benefits to Telestream in several ways. First, the acquisition brings Telestream a core team of programmers that has telco and UNIX/Solaris experience, which allows Telestream to expand its product base into mission-critical areas it might not have been able to reach with FlipFactory.

Second, it aids Telestream's continued expansion into the Macintosh platform. Telestream successfully expanded its initial foray into the Macintosh platform, a QuickTime plug-in encoder for Windows Media content called Flip4Mac, when it was chosen as the official Microsoft solution to replace the languishing Windows Media Player for Macintosh. Telestream’s Flip4Mac player, freely distributed by Microsoft, solved a problem for Microsoft while also providing Telestream with significant market exposure, as the plug-in installation can also guide content creators to the paid Flip4Mac encoder. Microsoft’s choice of Telestream’s Flip4Mac was also a shot across Popwire’s bow, as Popwire had also created a competing tool for encoding Windows Media on the Macintosh.

Third, Telestream also gains a seasoned marketing arm in Europe that jointly with the Telestream international marketing team, can expand FlipFactory and CompressionEngine tools globally. The combined marketing team, once FlipFactory and CompressionEngine’s combined strengths are merged, will have a compellingly deep product line that should compete well against several better-known automated encoding solutions.

Telestream CEO Don Castles said in a press release that business growth in Europe continues to increase, setting the stage for the joint Telestream-Popwire presence at IBC in less than a month’s time.

Finally, this acquisition also shows that the encoding and transcoding markets are quite strong and growing briskly, especially as market demand for high-definition MPEG-2, VC1, and H.264 encoders and transcoders spikes with the move to encode content for Blu-ray and HD DVD discs in time for the anticipated pre-holiday push for the two next-generation content formats. "As industry needs continue to grow," said Castles, "this acquisition enables us to better offer more diverse media encoding applications."

Of particular interest to Telestream, especially given the decision today by Nokia to purchase Loudeye, is Popwire’s Live Engine, which provides live broadcast streams for mobile operators and is broadly deployed worldwide. The mobile space for live, on-demand, and store-and-forward solutions continues to evolve rapidly. Expect to see additional mergers and acquisition activity in the space in the coming months.