5 Reasons Google Bought Widevine

Google (s GOOG) announced today that it will acquire Widevine Technologies, giving it access to technology necessary to securely deliver video to a wide range of connected devices. The acquisition is more than just a technology play on Google’s part; the Widevine purchase will also bring deep Hollywood relationships and improve its chances of getting Google TV deployed on consumer electronics devices.

Terms of the deal weren’t disclosed, but you can bet Widevine pulled in a pretty penny; the startup has raised $51.8 million in funding since recapitalizing in 2003, including a $15 million strategic investment last December that included EchoStar, (s SATS) cable operator Liberty Global (s LBTYA) and Samsung Ventures. Widevine could be invaluable to Google, as it provides technology and expertise in a number of fields that could help grow Google’s overall video business. Here are the top five reasons Google had its eyes on the company:

1. Everyone needs DRM
Widevine is a digital rights management firm, first and foremost, and DRM isn’t going away. Providing a secure way for content owners to distribute video online and to a number of connected devices will be table stakes in Google’s broader video ambitions. Whether it’s getting premium content on YouTube or securing video distributed to Google TV-powered devices, Widevine will give Google the technology and peace of mind to strike those deals.

2. Cozying up with Hollywood
Google has a problem — a content problem, that is. The company’s efforts to get long-form premium content on YouTube have generally fallen flat, and its Google TV products were met with universal disdain from media companies that acted quickly to block their online video streams from being accessible on those devices. Widevine has one thing that Google doesn’t: the trust of Hollywood. After providing the DRM technology used by a number of movie studios as well as online distributors like Netflix, (s NFLX) Sonic Solutions and Lovefilm to deliver videos online and on connected devices, Widevine is in a unique position to make introductions to some key players in Hollywood.

3. Connecting Google TV to more devices
Google launched its Google TV operating system on a series of TVs and Blu-ray players from Sony (s SNE) as well as broadband set-top boxes from Logitech, (s LOGI) but it clearly desires to embed the technology on other devices, and is rumored to be courting Samsung, Toshiba and other manufacturers to do so. Well, Widevine’s technology is available on products from Apple, (s AAPL) Haier, (s HRELF) LG Electronics, Nintendo, Panasonic, (s PC) Philips, (s PHG) Samsung and Toshiba, as well as more than 50 different set-top boxes. Google could leverage Widevine’s relationships with those manufacturers, and maybe even connect its technology into the broader Google TV code base.

4. YouTube Everywhere
In addition to getting Google TV on more connected devices, Widevine’s embedded technology could also help Google speed up distribution of YouTube video streams on more TVs, Blu-ray players and mobile handsets. Not just that, but by providing advanced DRM for those streams, Widevine could help make potential content partners more comfortable with those streams being delivered by YouTube.

5. Android needs adaptive streaming
Android mobile devices are swarming the market, and with Flash (s ADBE) installed, they promise users the ability to watch any video stream available on the web. There’s just one problem: Those videos, for the most part, aren’t optimized for mobile delivery. While Apple has built proprietary adaptive streaming technology for its mobile devices, Android phones don’t have a graceful way to deal with fluctuations in network bandwidth. Widevine, which makes video optimization technology in addition to DRM, could help solve that problem by helping Google to add adaptive streaming to future android devices.

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