Microsoft-funded, Utah-based online video firm Move Networks is acquiring Welsh IPTV distributor Inuk Networks in what looks like a much-needed move to prop up the business.

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Abercynon-based Inuk operates a PC IPTV service, Freewire, that delivers free-to-air and premium channels over broadband to about 100,000 students in university halls of residence through agreements with several universities. Inuk had also been trying to market its technology to pay-TV platforms on a wholesale basis as a means to give consumers an internet-based TV extender, but, when I met with CEO Marcus Lissiades in November, had so far failed to snag any clients outside academia.

In July, Inuk got a £9.5 million investment led by public broadcaster S4C’s digital commercial arm - newly flush from selling its SDN digital TV multiplex to ITV (LSE: ITV) for £34million - along with telecoms billionaire Terry Matthews’ Wesley Clover investment group. But within months, we heard Inuk’s cash position was deteriorating, likely after heavy spend on the Tandberg equipment necessary to make IPTV tick. Its accounts have been overdue since October and we understand board members including S4C CEO Iona Jones returned from overseas holidays in mid-December for an emergency meeting.

On Boxing Day, S4C agreed to loan Inuk a further £1 million through Inuk’s own Forevision subsidiary, Companies House filings show. The broadcaster secured an option on all Inuk’s property, equipment and intellectual property as security. At the time, S4C, which was funded by a £94.4 million annual handout from the government in 2007, gave us a “no comment”. Neither Inuk nor its investors chose to comment. Earlier this year, Inuk brought in a business strategist to review its position with a view to possible restructure, we understand.