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From 2015 40 million homes will lose analog TV reception in Brazil. We have invested in a E2E IPTV solution. We seek for an investor-partner for the undertaking to speed up significantly the go-to-market process. We have already customers.

Business Details

Short Description

In Brazil, migration from the analog to the digital TV system that will already start in 2015 will open a business opportunity to provide television media to the population that will be deprived of the traditional public TV, also allowing the combination of internet offerings, Pay-TV content (films, news, sports) and also telephony, satisfying a latent demand and with a value proposal both affordable and interesting for the consumer and for players in the value chain.

We, a company organized by executives with a wide experience in the Pay-TV industry, intend to explore this opportunity by offering specialized services to ISPs (Internet Service Providers) that are independent and regional throughout Brazil.

The proposal includes the provision of a complete plug and play IPTV solution (television via internet) in such a way that any one of the more than 4,000 independent ISPs in Brazil starts to enjoy a public TV product and Pay-TV contents in their existing network, making the ISP infrastructure profitable and serving a great number of public TV, internet and telephony consumers in the database of these ISPs, who suffer the "blackout". The television offer through the ISP has several advantages over large Broadcasters. The IPTV platform is completely based on software, and counts on internet protocol, also known as IP (Internet protocol) to carry its content. Software technological advances already enable the provision of triple-play (internet, telephony and Pay-TV) over IP, in addition to providing visual quality and superior sound, with no need to compress the signal as it is done by large Broadcasters. The IPTV platform also allows increased flexibility to adapt to technological evolution and great interaction with the end consumer.

We already have (i) the completely developed solution ready to be taken to the market, (ii) strong partnerships with leading international suppliers (that even sponsor the company through marketing budgets, confirming the actual opportunity potential), (iii) a business model highly profitable designed for the beginning of large-scale sale of this solution to ISPs, initially in the Southeastern and Southern regions, and (iv) well advanced negotiations with many potential clients, resides preliminary talks with other 210 ISPs in the Southern and Southeastern target regions.

We managed to provide on one Headend and Backend platform the whole solution and technology for encrypted content (Pay-TV), open content (ISDB-Tb) and interaction/applications (widgets), with no need for the operator to deal with several solution providers. Currently, competition does not have a complete solution, thus demanding integration, costs and Time-to-Market (TTM) delay.

The consumer is offered an affordable TV solution, filling the gap left by the blackout and also satisfying the demand for pay TV content. For the ISPs, it is a unique opportunity to make its infrastructure more profitable and to assure loyalty of the customers, who will inevitably seek a solution for the ?blackout?. For the suppliers of equipment and technology, it is an important commercial opportunity that would be of difficult access otherwise, gaining this large and growing market in Brazil.

We seek for capital and an investor-partner for the undertaking so to speed up significantly the go-to-market process and the implementation of the company business plan

Executive Summary

Purpose

The Company currently provides differentiated Pay TV over IP solutions (IPTV) to Internet Service Providers (ISPs) in a market of great potential and growth, and is seeking for an investment of US$ 1 million to implement its business plan. The purpose of this investment is: to buy equipment that will enable ISPs to immediately launch their IPTV services and the due disclosure through countrywide Marketing campaigns. We understand that ?Time-to-Market? and to be known by all ISPs in the country are indispensable elements for the success of the project.

Pay TV market in Brazil

Brazilian population is a great consumer of television and internet media, with an increasing and strong interest not only for public channels but also for differentiated television entertainment programs such as interactivity applications. TV plays an important role in people's lives as it is part of their daily routine with purposes that go beyond entertainment. It contributes for building society's educational, moral and cultural organization.

According to the IBGE [Brazilian Institute of Geography and Statistics] in the 2010 Census, now there are more television sets than refrigerators in Brazilian homes. TV sets are present in 95.1% of the homes, refrigerators in 93.7%. According to the PNAD (National Household Sample Survey - 2013), durable goods such as television sets grew from 97.2% in 2012 and 2013 together - equivalent to about 1.3 million more units. Source: IBGE 2013 census

In this context, Brazil is among the largest potential internet and Pay-TV markets in the world. The expectation is that pay TV earnings will grow 89% until 2017 in Latin America and according to Frost & Sullivan, class C and a convergent offer should drive demand for new pay TV solutions. Source: Teletime

Innovative carriers such as Netflix (content services via OTT) and Akamai (CDN ? Content Distribution Network) have experienced a significant growth in Brazil, according to market research and analyses held by those companies report data that show that Brazil is the 1st in the world in IPv4 addresses growth (Source: DigitalMagazine).

Despite this impressive growth, a significant part of the population still consists of major consumers of public television through traditional analog reception and a potential consumer of a differentiated TV offer (pay TV or similar). It is estimated that more than 40 million households still depend on analog public TV reception.

In July 2013, Decree nº 8061, determined what the industry began to call ?analog blackout?. This decree imposes the shutdown of the 700 MHz band (among others), currently used by analog TV broadcasters, for a public tender of that signal and the offering of 4G technology.

This analog blackout will be held in stages, with a transition period from analog TV to digital TV starting in January 2015 and ending in December 2018.
According to Anatel data, 724 cities are served by the digital signal, which could have the analog system already turned off in the first stage of the ?analog blackout?, enabling a public tender of the 700 MHz band in the same year. Nevertheless, this measure may cause an impact on the coverage of other cities. Several countries in the world have already gone through this transition and thus public channels stopped existing in the analog mode, creating a unique opportunity in the industry for players both specialized and well-prepared to satisfy the new demand.

The Company

Is formed by executives with more than 30 years experience both in the Pay-TV and the telecommunications segments, who have great expertise in this market and in the whole value chain of the Pay-TV market. After several years working in companies such as Sky Brasil (NetSat Services), NagraVision (Kudelski Group), Conax Latin America (Telenor Group), Viaccess-Orca (France Telecom), Cryptography Research (a division of Rambus), Magnaquest and Equifax do Brasil, they have identified this unique opportunity and have already worked for around 16 months in the project using their own personal funds.