There has been further consolidation in the playout service provision business, as Ericsson acquires Technicolor’s broadcast services division. Ascent Media got out of the sector just over a year ago with the sales of their playout business to Encompass Digital Media. Now, Ericsson has submitted a binding offer to acquire the broadcast services division of Technicolor in a EUR 19 million deal (circa $25M).
Ericsson already provides playout services for the Swedish broadcasting group, TV4, but the acquisition will put the company head-to-head with the large service providers including Encompass, Globecast and Red Bee. As multi-device delivery spreads, Ericsson is well placed to capitalize on the new media landscape with its reach from encoding to telecommunications. Although live channels are the headline operations for playout providers, just as important is media preparation for VoD delivery. Ericsson already reaches into the media delivery business with IPTV systems, as well as providing platforms for managed content delivery networks.
The acquisition will put Ericsson very much in the position of a “live to long-tail” systems provider, a timely match for the public demand for content delivery everywhere to every device.
"As the TV industry is undergoing fundamental changes with the transition to multi-platform, on-demand television, teaming up with a trusted partner enables broadcasters to meet the increasing commercial and technological complexity and competition in the TV market" said Magnus Mandersson, Executive Vice President and Head of Business Unit Global Services, Ericsson. "We combine our service and technology leadership with strategic investments in playout operations, broadcast capability and competence."
The acquisition will bring approximately 900 staff and playout operations located in France, UK and the Netherlands, serving several leading broadcasters, and will allow Ericsson to substantially increase its current broadcast operations in terms of channels managed and households reached.
The announced acquisition intention is in line with Ericsson's managed services strategy to broaden its capabilities in the broadcasting area. Ericsson applies the managed services business model established in telecom operations, to improve efficiency, introduce innovation and increase revenues for the broadcasters.