First Technicolor, Now Red Bee

From Telephones to TV, Ericsson Making a Commitment to the Television Broadcast Industry

Communications giant Ericsson, yes Ericsson who made phones and in 2012 was announced as the largest provider of wireless network equipment has announced its intention to acquire UK-based services company from an entity controlled by Macquarie Advanced Investment Partners. The planned purchase – which is subject to the usual regulatory approvals – comes at a time of profound change for the synchronicities between the broadcast sector and communications providers, as highlighted by BT’s forthcoming launch of its own dedicated sports channels.

Ericsson says the purchase would support its strategy to grow in the broadcast services market, and would bring into the fold 1,500 highly skilled employees, as well as media services and facilities in the UK, France, Germany, Spain and Australia.

The move follows on from the introduction of Ericsson’s broadcast services business in 2007, and its subsequent expansion with the acquisition of Technicolor’s Broadcast Services Division in 2012. If the new deal goes through, Red Bee Media will be incorporated into Ericsson’s Business Unit Global Services.

Magnus Mandersson, executive vice-president and head of Business Unit Global Services at Ericsson, says: “Ericsson is making a step change to our business, cementing our commitment to TV and broadcast services and continuing a journey we started in 2007. We can create value for broadcasters by making digital content more accessible, enabling monetisation of TV content more efficiently. Video traffic shows very strong uptake in the mobile networks and Ericsson can address the need of both broadcasters and telecom operators through our technology expertise and services capabilities.”

From my point of view, there surely has to be a conflict of interest if this goes through. It would mean the play out services for all BBC, ITV and Channel 4 channels come under the Ericsson global division. That has to be a concern, no?

Reading 'Broadcast Engineering who spoke  exclusively to Thorsten Sauer, Head of Broadcast Services at Ericsson.

Why the acquisition?

“The primary focus was to broaden our offering,” Sauer said.

As Ericsson Broadcast Services expands, will it run out of Tier 1 customers?

“We would like to offer our services to all customers that can benefit.” Sauer said. “The skill set we are building is relevant for broadcasters large and small. (As an example) some of the skills (from Red Bee) in content distribution are relevant to cable and telco side.”

Sauer continued on this theme of new customers.

“We would be interested in new customers that want a high-quality service," he said. "We have to have a good offering for different market segments. Some customers have big demands with live content; another segment has more thematic channels with a different channel requirement. We believe (in this latter area) we can add a lot of value though industrialization of processes.”

Ericsson clearly wants to offer a high quality of service, but to be competitive, it will do that in a highly industrialized way.

One area Red Bee has been active in is the skinning of streamed content with the RedPlayer. The RedPlayer second-screen app has proved a success, being adopted by several leading broadcasters. This will dovetail with the recent acquisition of Microsoft’s MediaRoom IPTV platform. IP delivery is not new to Ericsson.

“We already operate 80 streaming channels in Scandinavia, so that side of Red Bee will strengthen our proposition.” Sauer said. “We can leverage the complementary skill sets of the middleware we have, with the user interface design from Red Bee.”

Red Bee has products as well as services, notably Piero, 3D analysis technology for televised sporting events. How does that fit with the managed service portfolio?

“Piero is an interesting technology," Sauer said, "but we need to understand it better before making any judgment.”

From its past as BBC Broadcast, Red Bee also provides access services including captioning and audio description, as well as creative services for channel branding and promotions. Ericsson operates limited access services in the Netherlands, so the acquisition will strengthen this area. This becomes another offering to its customers, especially with the legal requirements in many countries to provide the services.