How KIT Digital Will Conquer the World

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KIT Digital has a very simple ambition: It wants to rule the world.

To be specific, this global provider of IP-based video asset management (VAM) solutions wants to dominate the over-the-top (OTT) transmission of video content to mobile and web-based viewers. This is why KIT Digital has been on an extended buying spree; it is purchasing the capabilities required to be a one-stop distribution platform for broadcasters and content producers worldwide.

“We are going after the big fish that other VAM providers are too small to serve,” says Gannon Hall, KIT Digital’s executive vice president of global marketing. “As a result of our acquisitions, KIT Digital now has a 45–50% market share in the IP-based video platform software sector, with a client portfolio across the American, Europe/Middle East, and the Asia-Pacific regions.”

Results speak louder than words, and KIT Digital is certainly delivering results. Its client base includes broadcasters such as ABC News, The Associated Press, BBC, CNN, ESPN STAR, News Corp., and NBCUniversal. It also includes network operators such as AT&T, BSkyB, FOXTEL, Telecom Argentina, Telefónica, SingTel, Verizon, and Vodafone Ltd. It has nonmedia clients such as Airbus, Best Buy, Bristol-Myers Squibb, General Motors Co., NASDAQ, NATO, SAP, and Volkswagen.

To cast KIT Digital’s growth in another context—money—the company’s 1Q 2011 financial results noted 5% revenue growth to $34.5 million; that is up 98% from the previous year. Much of that growth can be attributed to KIT Digital’s new acquisitions adding their revenues into the mix. But even without this boost, “Management estimates that organic growth year-over-year was approximately 38%,” say the 1Q 2011 financials.

KIT’s Buying Spree

Back in late 2007, KIT Digital was known as the ROO Group. It was a video aggregator that was having very serious money problems. On the verge of teetering into oblivion, the company was saved when Kaleil Isaza Tuzman (now KIT Digital’s chairman and CEO) bought controlling interest in the ROO Group, renamed it, and turned its focus from consumer to B2B streaming video.

Tuzman had previously garnered attention as the subject of Startup.com, a documentary that tracked the birth, growth, and eventual sale of his dot-com company www.govworks.com (now a dead URL) in 2001. He subsequently established KIT Capital/Recognition Group. He then invested in and served as president of JumpTV, Inc. (www.jumptv.com) from 2005 to 2007.

“Tuzman recognized that nobody had grasped the potential for video asset technology and service outside of the U.S. market,” says Hall. “This was a multi-billion dollar opportunity just waiting to be seized. He also saw that existing VAM providers were too small to properly support truly large corporations. To realize this chance as well as capitalize on the VAM market’s global potentials, he needed to expand KIT Digital’s capabilities fast.”

In line with this strategy, Tuzman started buying companies. Lots of companies. In 2008, KIT Digital acquired Visual Connection (telco/IPTV services), Kamera (mobile TV), and Morpheum (CMS vendor). The next year, the company bought Narrowstep (broadband TV provider), NuNet (its technology was incorporated into KIT Digital’s VX Enterprise solution), and The FeedRoom (broadband video).

  

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