40 TVBEurope Feature BroadStream Solutions deal adds to M&A activity
THE BURGEONING trend in mergers and acquisition activity continued as forecast in June, as global broadcast technology provider BroadStream Solutions acquired OASYS, the automated playout software technology specialist, for an undisclosed fee. The deal will see the consolidation of all operations under a global holding company, enabling BroadStream Solutions to expand its global reach to markets in which OASYS is currently active. The deal is also seen as a vehicle to enhance the position of OASYS products in the US. Mark Errington, BroadStream Solutions’ CEO, explained, “The acquisition is great news for both OASYS and BroadStream customers who now have access to a wider range of products. The broadcast industry is undergoing a transformation, spurred by consolidation in the market sector, changes in customer consumption habits, spreading of advertising revenues, changing broadcaster
“The key piece for this was our analysis of the fact that consumer expectations will continually evolve,” explained Frost. “Our message to the market is to most people in the media value chain but it is sharpest for pay TV operators. That’s the point where you are trying to justify the amount of money you are charging a subscriber for a package service, but it is equally relevant for a broadcaster that’s trying to drive viewership and wants advertising revenues.”
The primary message concerns the consumer’s perception of the value of any content delivery. “It is continuing to shift. We started to see some cord cutting and shaping in the US based on key heavily bundled packages of services – linear channels,” said Frost. “The consumer is just going to keep evolving. You are going to have to keep re-assessing your business model because frustration could cause challenges to the revenue you will earn in the future. That is the key piece we are trying to get across, and part of it is about continuing to delight the consumer with the ultimate in content.
“In a way, we see it as two aspects from the experience. The discovery of content is an opportunity and a frustration element to consumers today in a more connected world. I can do this on iPlayer on my connected TV but I cannot do that on my Skybox. There is an opportunity to make this much better, so
budgets and rapidly updating technology. Now BroadStream and OASYS have joined forces, we are well placed to ensure that our customers gain maximum ROI, with better long- term fl exibility of products, that can be reconfi gured as channel requirements and workfl ows change.”
The owners of both companies, Mark Errington and Herbert Brenninkmeijer (OASYS) will remain as senior leaders within the business, with Errington assuming the role of CEO at BroadStream Solutions and Brenninkmeijer remaining chairman of the board. BroadStream is also making a series of additional appointments to support business growth and reinforce its ongoing strength and innovation in customer service.
In terms of integration, the team at OASYS will be consumed into the new entity, with the company’s products being brought into the wider portfolio to become the basis of all playout innovation in the future.
I think discovery is one key aspect,” he added. “What was the interaction with content itself will evolve with social media networks, with being persistently connected with mobile. The creative side of the TV business can start to explore the programming format itself, of how to leverage technology for making content more immersive for a consumer.” There is a huge desire to create great ‘fi lmic’ content, so much so that budget-wise, top drama is running at £1 million an hour. Series like Happy Valley and True Detective have
does things in different ways and there are many broadcasters doing their own thing. In a world where those challenges are only going to increase, trying to address connected devices and play services and smart TVs is ever more technologically challenging for a broadcaster. We have a lot of insights across how each technology is going — mobile networks, devices — and a lot of expertise around the challenges broadcasters will face,” he added. “All of them have an aspiration to be on all of these new devices, delivering over the internet, and meeting the challenges of producing great quality experiences for consumers. They also want to leverage their business internationally as much as possible. They have scale challenges and technology challenges that we have a lot of insight into.”
Mark Errington, CEO, BroadStream Solutions
Frost. “The quality of content will go up in the premium areas. That is the most compelling stuff and that’s the thing people would be prepared to pay for, change their lifestyle for.”
The reclamation of spectrum What casts the bad shadows on the market? One issue we never hear the end of is ‘spectrum grabbing’. “I do not know whether we would say spectrum is an issue. Spectrum is a valuable bit of real estate that most governments are looking to leverage for the common good,” said Frost. “But what we are
the UK example we now have connected TV platforms. “We have got YouView, and globally in many other countries you have HbbTV for platforms. There are now linear channels appearing on the internet, to an internet delivered platform, so linear broadcasting does not have to be through the UHF spectrum. And we are seeing consumers shifting ever more to wanting on demand access to content,” he added.
Red Bee puts Ericsson closer to traditional broadcasters. It can put in elements like portfolio, business scale and
“We will see more quality content at the high end as more money comes into the industry and more people commission exclusive content to drive exclusivity for them”
set new standards, but will budgets hold?
“There is a strong potential that we will see the cost of content going up because more people keep appearing. It is the way into the market if you are a new entrant. Just look at BT Sport, for example: you drive exclusivity on rights for some of it, and if you look at the Netfl ix example, you commission your own content. Entry is either buying the rights to something or commissioning something you think will be compelling,” said
mainly seeing is the discussion between the reclamation of spectrum that has been typically used for terrestrial broadcasting for mobile broadband. The EU approach is about harmonising bits of spectrum for that, and if you look more long-term, is broadcasting – and I mean the technology of broadcasting in the UHF spectrum – the single most important way of reaching consumers? To a broadcaster it is important, and it will be important for a long time, but even if you look at
Simon Frost
insight from being a world leader in managed services for Telcos. What picture does Frost see here?
“We are effectively one of the world’s largest mobile operators for our customers, so we have a lot of best practices expertise with how to do managed services. So a lot of the logic for getting in there (Red Bee) was that we could bring a lot of ethics for best practice into broadcast,” he said.
“Broadcast itself is quite fragmented; each broadcaster
Mobile traffi c growth to jump tenfold Will the internet stand everything heaped on it? Will the mobile companies carry so much video content that they quickly exhaust the spectrum they grab from broadcasters? “I don’t think we will exhaust anything. Spectrum is a slightly separate discussion. Mobile traffi c growth is going to jump ten times between now and 2019. There is going to be a quadrupling of the amount of people on the internet through mobile – going from two billion to eight billion mobile broadband subscribers globally,” Frost explained. “The fi xed internet is pretty much capped, just teetering around one billion, but with the massive growth in mobile will the internet sustain the demand for video consumption as it is? No it will not. But what is already happening but needs to cement itself a little more is what the industry is actually doing: the people who want to distribute quality experiences on the internet need to assist the engineering of that network to guarantee their ambitions,” he added. “The content industry has happily become part of this network society and the connected world. Groups that were representing the content owners and broadcasters are coming together with the people that made an effort to understand the ecosystems and understand the devices, because that’s what they need in the future.”
www.tvbeurope.com July 2014
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