The start-up of television content streaming cloud services created by the engineer Gats Gaiļis and his father, the former Prime Minister of Latvia and businessman Māras Gaiļis SIA Vices is acquired by PLAY, a subsidiary of Japan’s largest television operator, Nippon. It is planned to use joint forces to spread the cloud service created in Latvia much more widely than before. The transaction amount is confidential and not disclosed.
“We had worked together for several years, so we knew there was good synergy between the two companies, including a shared mission to drive digital transformation in the media and entertainment industry. The acquisition of the company will help develop the offer and scale the company, especially increasing our presence in Asia,” says SIA Veset co-founder and manager Gatis Gailis.
The founders of Veset met the new owner in 2019, when the Latvian company provided the Japanese partner with the first four-channel content transmission cloud service. This year, PLAY decided to buy Veset. “In recent years, working with Veset, we have been convinced not only by the quality of the technology created, but also by the entire team, which has the same values as us. I am sure that the merger will be a win-win not only for both companies, but also for our customers and their viewers,” says PLAY CEO Kazumichi Kuroda.
G. Gailis points out that this is a good deal, because Veset gets additional financial opportunities to work with larger clients. “With our technology, PLAY sees a good opportunity to exit the Japanese market and offer its services globally. Also, PLAY is the largest customer of Amazon’s cloud service AWS (Amazon Web Services) in Japan, which will also allow us to get better prices for services and access to the AWS sales network worldwide,” says G. Gailis.
200 TV channels worldwide
The idea of a content transmission cloud service was born in 2011. At that time, businessman and former prime minister Māris Gailis was suggested by his friend Jānis Vaišļia to return to the television business – he was already working on television in the late eighties. M. Gailis told his son Gatis Gailis about this idea and they decided to create the company together, involving Jānis Krampānas as well. “At that time, there were 20 television channels in the Baltic States, so it was immediately clear that we had to offer a solution that would be useful on a wider scale, not only in our region. As an IT engineer, I had worked with cloud technologies, so we decided to develop a solution in the cloud,” says G. Gailis.
Offering cloud services in this industry is difficult. Television is a conservative and slow industry with high accessibility requirements. For example, if the accounting system is down for one minute, perhaps no one will even notice, but if the TV channel is down for five seconds, the supplier will receive a penalty.
Veset acquired the first customers on its own, however, it became clear that additional resources would be needed for growth. Therefore, in 2014, the company attracted investments of 700 thousand euros and established the parent company “Veset International” in London. “London is the center of European television – the BBC and all other major television channels are located there. To be interesting to them, we should have been in London,” says G. Gailis.
Currently, Veset has customers in 20 countries – more than 200 television channels use content transmission software created in Latvia. 70% of customers are in Europe, the rest are in the USA, Japan, Mexico, Brazil, etc. “This business is pure export. Our technology is also used by an information technology company whose market value is several trillion dollars, but whose name we cannot disclose,” says G. Gailis.
Veset has 16 employees, most of whom are located in Riga. It is planned to increase the number of programmers.
Several years ahead of competitors
When television plans content, it is clearly known that, for example, there is one program at 10:00 in the morning, followed later by a commercial, and at 11:00 a.m. a movie. Traditionally, television channels use various specific equipment to broadcast such content, as well as need networks, data center support and engineers who know how to manage this process. Veset replaces all that with a cloud service. “The management of the TV channel does not need to invest in equipment, they only have to pay the subscription fee for our and AWS services. A big benefit is scalability – a media company can, for example, create three new channels and close two old ones in a short time. This gives flexibility to the media business,” says G. Gailis. M. Gailis adds that Veset was the first company in the world to offer such a service. In 11 years, competition has already arisen, but he is convinced that several years of experience is Veset’s competitive advantage. Until now, the big television channels were reluctant to cooperate with a start-up company from Latvia. “It would be a big risk for them to give up their equipment and switch to our technology – what if we disappear one day? Now that the company has been bought by a Japanese company with significant financial resources, those concerns are allayed. I am sure that soon Veset technologies will be used by many more television channels than before,” said M. Gailis.
