July 2014
www.tvbeurope.com
TVBEurope 39 Feature The game changer
Simon Frost joined Ericsson in 2007, when Tandberg TV was acquired. He is now the head of marketing for Ericsson’s TV business sector. George Jarrett talked to Frost about the wave of consolidations announced around NAB, IP strategies, consumer perceptions, the impact of new market entrants, and Red Bee – a corporate marriage made in heaven
ERICSSON HAS 110,000 employees. It has customers in 180 nations. It manages over a billion mobile subscribers. It has scaled these mighty peaks with a steady stream of acquisitions that progressed from Tandberg and Mobeon, to Optimi, Telcordia, Bel Air Networks, Technicolor Broadcast Services, Concept Wave, the IPTV platform Microsoft Mediaroom, and TV anywhere specialist Azuki Systems. Then came the long closure game for Red Bee Media, which coincided with dozens of mergers and acquisitions in the media market. Was this part of an industry-wide readjustment for the media battles ahead? “There are always multiple reasons but if you look at our customer base it is also consolidating very fast,” said Frost. “If it was NAB and you were looking US centric you had Comcast/Time Warner, you had DirecTV/AT&T (announced but not closed) and you had Vodaphone with its cash spree (Kabel Deutschland). “Our own media customers are consolidating, and they are doing so for two key reasons. One is for the delivery technology to the home. All of those powerful players need an IP strategy to the home for the future of connected TV and two-way delivery of content,” he added. “Powerful satellite- based platforms really need IP strategies as much as anyone else, and obviously cable is looking at IP. So reason one is about having the right delivery capabilities to the home.” The other reason is just pure scale, and it involves new entrants. “These start-ups, like the Netflix’s of this world, come into this market with exclusive content. We all know the classic model of bidding for exclusive content, so the price of quality content is only going to go up as more players bring in new money,” said Frost. “The scale you have in revenues drives the scale of the investment you can bring, both in technology, but more
Simon Frost
“Powerful satellite- based
platforms really need IP
strategies, and cable is looking at IP”
Simon Frost
importantly in content. The more exclusive content you have the more subscribers you drive, so it is a virtual circle and it is quite a hard one to crack as a new entrant,” he added. “It is a big price ticket to come in as a new entrant. That is why we are seeing so much industry consolidation, and I think that is part of the reason you are
seeing vendors in this space also make strategic acquisitions to build out their portfolios in strategic ways.”
Red Bee was a huge deal because it takes Ericsson closer to the content services end of the business. “Yes it is huge,” agrees Frost. “Ericsson is pretty well known in TV given the equity transfer of brand from Tandberg TV, but yet it could still be stronger. It is strong in its core market of Pay TV particularly. Red Bee, along with the Technicolor part acquisition, has really spread that recognition for Ericsson far more towards the content creation side of the market. “We have yet to see how that plays out. If you look at the Mediaroom acquisition there is a lot of design experience from a UI/user experience point of view – labs that are looking at the next generation of discovery mechanisms for content and how you interact with content,” he added. “You have also got our consumer lab TV studies that we do, so I think we see the whole thing adding to the melting pot.”
Continuing to delight the consumer
This led to Ericsson’s plan to publish six Game Changer white papers by the end of this year, the first being ‘Forever Evolving Experience’.
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