TVN and Avail Media Merge

Video-on-demand distribution services provider, TVN Entertainment, and Avail Media, a company that provides managed content aggregation services primarily to smaller IPTV operators (note: it offers an extensive line-up of linear TV channels, encoded in MPEG-4, as well as a companion VOD service), announced Monday that they are merging to offer what they claim will be "the first fully integrated, end-to-end solution for content owners and service providers." The companies say that the merger--which according to a report in the cable-industry trade publication, Multichannel News, sees TVN's owners, including majority owner, Morgan Stanley, receiving around $80 million for the company--is being funded by Avail investors, Columbia Capital, Novak Biddle Venture Partners, Valhalla Partners, and Pioneer Ventures, as well as by the National Rural Telecommunications Cooperative (which, in return for its investment, will take a seat on the merged entity's board). According to a report in the Los Angeles Times, the two companies will, for the time being, operate separately as divisions of Avail Media, which will continue to be headed up by CEO, Ramu Potarazu (who was formerly president and COO of Intelsat). TVN president and CEO, Doug Sylvester, meanwhile, will become president of Avail's TVN division.

The companies are billing the merger as enabling the creation of a "scalable and extensible platform enabling delivery of next-generation video distribution services." "We are moving quickly to an environment in which consumers can access any type of program--movies, TV shows, sports, news--on any device at any time," Phil Herget of Columbia Capital, said in a prepared statement. "No one company has assembled all the necessary components to ensure that content is provisioned, packaged, protected and delivered across multiple view platforms, multiple distribution partners in support of multiple business models in a seamless and integrated way. The combination of TVN and Avail provides the end-to-end solution to enable our customers to meet these evolving consumer demands."

According to TVN and Avail, the merged entity will be the largest independent provider of end-to-end content-aggregation, management and service offerings, and will deliver content from over 200 partners, including Hollywood movie studios, cable networks and independent producers, to over 46 million homes and 120 million viewers. The companies--which claim that between them they already provide services to "nearly every television provider in North America"--say they plan to "extend the technologies and content offerings available to their customers on a global basis." They say that their expanded services will include video over broadband, targeted advertising and interactive applications, and that the merger will enable their customers to offer linear programming from national broadcasters and localized, genre-specific, ethnic/international and long-tail content, as well as Hollywood studio titles. "In these challenging times, delivering value to consumers and investing in the future takes on even greater importance for our customers," CEO Potarazu said in a prepared statement. "The combined platform and reach of TVN Entertainment and Avail Media allows content owners and service providers of all types to outsource the manual, specialized function of managing and delivering video entertainment via an expert organization that performs these functions efficiently and cost-effectively now and in the future. Whether it is delivering video to the television screen today, or to the PC and mobile device tomorrow, our team shares a common vision of enabling both content owners and service providers to profitably deliver the services consumers want." TVN used Cowen and Company as its exclusive financial advisor and Montgomery & Hansen, LLP as its legal advisor for the transaction, while Avail Media was advised by Cooley Godward Kronish.