Verivue’s CoBlitz buy addresses "uncompensated traffic"

Verivue, a vendor of content delivery network platforms to support managed video services, has added a new dimension to its CDN offering, today announcing its acquisition of CoBlitz, a provider of CDN infrastructure to support over-the-top video services.

The deal combines Verivue’s traditional cable TV focus with CoBlitz’s telco approach to create a turnkey offering with broader appeal. Verivue is aiming to help all types of service providers deal with the growing problem of “uncompensated traffic,” prevalent on their networks from sources such as OTT video sites, said Verivue CEO Jim Dolce. An example of this kind of traffic is the increasingly popular Netflix streaming service. “The telco might charge $39 a month for broadband service, but if you start doing a lot of Netflix streaming, they are still going to be charging $39 a month,” Dolce said. “They aren’t getting anything from the traffic that is taking more and more of their network capacity.”

The challenge will increase as video-friendly devices like iPads and Google TV set-top boxes become more popular, he added.

“We’re seeing 50 percent CAGR growth in uncompensated traffic right now, so carriers must find different ways to architect their networks,” Dolce said. “You can use a CDN to replicate content so that you don’t have to use your backbone capacity to keep going to get it.” Using CDNs to replicate content at the edge helps network operators avoid the great capital costs to build more capacity into their networks.

The CDN space has become fairly crowded with different vendors in recent years, and it would not be surprising to see more deals like Verivue’s buy of CoBlitz that match managed services-focused CDNs with OTT-focused CDNs to craft a more turnkey approach. Verivue decided CoBlitz was a good fit for it after finding that the two companies had customers in common.

Both companies are privately held and have been around since 2007. The acquisition was an all-stock deal.