Open Insight #11
(Click here to read the Swedish version)
Welcome to Open Insight, our blog for investors. This is where you can find out more about our offering and market position, our progress, our challenges and our growth.
We started the year with a strong quarter clearly indicating that we are delivering our strategy with strong drive and commitment despite the general uncertainty in the world. This success is also driven by our competitive offer, our hard work in strengthening the sales organization, intensifying our marketing and our ability to help and support our customers to develop their businesses.
In March I had the opportunity to travel to USA and Canada to meet large media companies and service providers whom gave us positive feedback on our new products – further confirmation that we are on the right track. In this edition I will share my experiences and observations.
During the highly anticipated NAB Show in Las Vegas we experienced significant interest in our portfolio, especially related to the cloudbased Nimbra Edge, for which ease of use, security and the migration from satellite to cloud, were the most topical areas of discussion.
My trip to USA and Canada afforded me many observations and reflections. Within the media market, I noted a few overarching trends for broadcasters and service providers. For broadcasters there is strong consolidation and centralization of content and distribution, where for example WarnerMedia and Discovery, are merging to create Warner Bros Discovery. I also noted companies with streaming service platforms broadening their offering to create a greater “stickiness” of the content they deliver. For example, Netflix is broadening its offering so that a larger proportion is live content and Prime is offering more live content and sport. We also have companies like NENT (Nordic Entertainment Group) increasing both the amount of content it offers and reach, expanding from today’s Nordic customer base to a target of 14 European countries in the future.
For service providers the shift is towards global expansion, and strengthening of global presence. For example, providers like Tata are looking to strengthen their position further within USA, and Telstra Australia is expanding and becoming stronger within the global market. The counter-trend includes service providers which instead are strengthening their position regionally and exiting their global footprint. Many companies are broadening their content, with amongst other things, production services. Here we have, for example, the Switch, which through its cloud offering MiMiC – which includes Nimbra Edge – has gone from focusing on distribution to supplementary production services.
Highly productive NAB Show in Vegas
After over two years of canceled conferences, the NAB (National Association of Broadcasters) Show in Las Vegas, USA in April was highly anticipated by both us and customers as an opportunity to finally meet. Our stand was well-visited and we are extremely grateful to have met with so many customers, both existing and new, and for the significant interest shown in our offerings.
Positive feedback on solutions and demos
The focus was threefold, firstly related to our new JPEG XS compression solution with high quality and ultralow latency which is key for our distance production solution. Our JPEX XS solution was released to customers last winter and was used during the winter games.
Secondly related to our Cloud solution, where our cloud product, Nimbra Edge, was in the spot light due to its user friendly accessibility and simplicity. We had many discussions related to using Nimbra Edge in primary distribution instead of using satellite, but we also demonstrated live, together with our partner Simplylive, how Nimbra Edge can receive streams for a distance production in the cloud to later re-distribute to the content owner.
Thirdly related to IP Gateway which is our new offering for IP based networks, and the launch of IP Media Trust Boundary, necessary security function for media traffic in open IP networks which we have developed and delivered to, among others, Red Bee. We have added new functionality to our IP Media Trust Boundary solution which enables full control of individual video streams. It also facilitates transport between different IP customer networks, which is critical for all major future IP media networks.
Demonstrations were very popular, with Nimbra Edge being the most in demand where we demonstrated how easily we can integrate coders from third party suppliers. This was closely followed by IP Media Trust Boundary with its sophisticated control of individual media streams.
Other popular demos included our robust and powerful IP media platform Nimbra 1060, which can handle multiple 100 Gbps streams, our open IP Gateway, Aperi, which can be used for the secure handling of open networks, and our internet contribution platform, Nimbra 400, which has received awards for its user friendliness and which is now fully integrated with Nimbra Edge.
Our synch solution solves many challenges
Building mobile networks is complex and there are high demands on functionality, security and reliability. The networks are progressing towards cloud architecture with increased virtualization and it is vital that our products and solutions fit within both current and future networks.
Reduced costs and faster 5G roll-out
Synchronization is a pre-requisite for mobile networks to function and is one of the biggest challenges the operators are facing in order to build high quality and profitable 5G networks. Our new synch solution has several advantages.
The biggest advantage is that we separate the synchronization from the operator’s transport equipment. Instead of having to consider synch in each individual part of the network, it can be built as another network function. This enables optimal synchronization separately from the transport layer and simultaneously, the transport network can be optimized without impacting the synch requirements. Another advantage is that current equipment can be re-used in parts of the network that do not need to be upgraded hence avoiding 5G roll-out costs.
Targeting our target group
The primary target group for our synchronization solutions are mobile operators. From approximately 800 operators in the world, we have identified around 50 that we are targeting, primarily in Europe and Asia (excluding China). Our principal focus is on this target group which will expand over time.
Currently, we have 5 PoCs and tests at customer sites where the feedback has been positive. Most customers however are in the first phase of roll-out within a few big cities. The challenges with time synch will be in the next phase of national roll-outs, over large areas and over existing networks.
The experience and understanding of the challenges with time synch varies widely between operators and we often act as an advisor explaining the problems and solutions. This is due to historically, 3G and 4G primarily using GPS bound solutions and time synch not being an important feature of the networks. The understanding and perception of how critical time synch is for 5G has increased significantly in the last year and the geopolitical situation have also emphasized the need for a GPS independent synch solution.
The fact that the major national roll-outs, which are best suited to our solution, are planned for in the future serves us well and gives us the opportunity to broaden our knowledge about our solution and to cost optimize the 5G platform.
Transitioning from satellite to cloud creates growth opportunities
As revealed in Open Insight #7 we can see that transportation of media that today happens through satellite will, in the near future, be transported via the cloud, both due to cost benefits and scalability. Net Insight believes that this trend will increase, which points to significant growth potential for the company.
Satellite was previously used for TV channel distribution, which today can be replaced by cloud products like our Nimbra Edge. The frequency bands used in many countries by broadcasters for contribution and distribution will instead be used for 5G mobile reach and these broadcasters will have to switch to other alternatives like the internet and IP.
What makes Nimbra Edge so competitive?
Our proprietary cloud solution Nimbra Edge is being recognized for its compatibility with different clouds and protocols, user friendliness, integration with third party equipment and ability to securely transport media streams. We work closely with our large customers to adapt our product to the market and to customer needs. The progress is going to plan and we are constantly introducing new functionality, the latest relating to value adding services (VAS) for protection of streams and handling of multi stream formats for distribution.
Annual Report 2021 published
Our Annual Report 2021 was published on April 22, and is available from our website. In the report you can read about the highlights of the year, financial position, market trends and our strategic initiatives. To increase the readability and make it easier to navigate through the chapters, we have web adapted the report to landscape format with interactive functionality.
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CEO Net Insight