NeuLion EVP Chris Wagner Discusses DivX Acquisition as 4K Streaming Makes Strides

Earlier this month, NeuLion acquired DivX, a provider of digital-video–distribution technologies. According to TechCrunch, it was a cash and stock deal worth at least $62.5 million. The substantial investment will enable both companies to address the global shift to 4K video in over-the-top (OTT) environments.

“4K is going to happen on digital before it happens on legacy cable and satellite,” says Chris Wagner, co-founder/EVP of NeuLion. “Digital is just perfect for it. There’s all of these new devices coming into the market that are 4K-enabled; at the same time, the prices of those devices are dropping, and the content libraries are growing. That’s why the DivX acquisition made sense.”

The two companies have enjoyed a friendly relationship in recent years, commonly working together and co-bidding on some business ventures on the entertainment side. The two have already paired on a substantial 4K test this year: NeuLion worked with the NBA to send a live stream of BT Sport’s 4K production of the Milwaukee Bucks-New York Knicks game from London’s O2 arena to NBA headquarters in New York on Jan. 15.

The deal is a logical one for NeuLion. The company specializes in digital distribution but needed a boost to get 4K on the big screens that it needs to be viewed on. DivX already possesses stronger relationships with consumer-electronics device developers.

“You need that big screen and the ability to play out on it along, with the encoding and transcoding,” says Wagner, noting that DivX will become a part of the NeuLion family but retain its name, which has valuable clout in the industry. “HEVC gives the ability to do 60 frames per second at four times HD on a big screen, which needs to be 55 in. or bigger, and now we can do that all over-the-top. That gets me very excited.”

All of DivX’s 270 employees — including more than 100 engineers — will become NeuLion employees, bringing the combined companies to 575 employees in 17 offices worldwide.

The deal marks the third time that DivX has publicly changed hands. In October, the company was a part of a $75 million deal that pulled DivX away from Rovi to Parallax Capital Partners and the StepStone Group.