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30 TVBEurope Feature A bold vision of the


Charlie Vogt sits on the FCC Advisory Council, and is an important member of both the IABM and TIA on the supplier side. He has been the CEO of Imagine Communications for a year, and recently won Finance Monthly’s annual CEO award for his transitional achievements at the company. For this issue of TVBEurope, he talked to George Jarrett


DURING THE great rush of consolidations around NAB, Harris Broadcast affected an identity switch and at the same time completed the cultural re-direction that so many other corporations are pursuing in the service of TV Everywhere. The acquisitions of Digital Rapids and Imagine happened under the watchful eye of Imagine Communications’ CEO Charlie Vogt, who spent much of his career helping Telcos and MSO companies build out their subscriber base access networks. What did he learn back then? “That there was a huge convergence coming, and you could see it from just spending quality time with the likes of AT&T and Verizon,” he said. “Over the next three to five years we are going to see a pretty significant landscape shift. There were some big moves that go back to 2012 when Disney bought Lucasfilm and CBS bought TV Guide. There has been a lot of activity that has driven new shapes within our space. “An AT&T or BT has focused for decades on the access plant and being able to provide that last mile of connectivity, whether it is fixed or wireless. The move that you saw AT&T make recently was really a dual one because it quietly acquired two companies — DirecTV ($48.5 billion) and Leap Wireless ($1.2 billion). Leap gives AT&T spectrum it desperately needs, and DirecTV gives it a bigger fixed wire footprint in the home, and it gives it access to subscribers that it does not have today,” he added. Vogt’s wider market knowledge tells him that the content distributors are trying to control a bigger footprint of the subscriber base. “Eventually, they are going to go upstream and will either create their own


content or acquire it. Ultimately, they want to own everything from the lens to the consumer. First and foremost, you have to have the fixed wireless access to be able to do that, and certainly what broadband and the internet have done is to create a huge opportunity for both entrepreneurs and the really large giants,” he said. “Suppliers like us tend to follow our customers.” Over 15 to 20 years we saw massive consolidation shifts in the Telco world, followed by a lot of consolidation amongst the supplier community because it was selling into fewer and fewer companies. Taking this as a foreboding, Vogt said, “We went from hundreds of high quality telecom companies that were spending lots of money to 25 or 30, and if you were not selling into these it put pressure on your business. That kind of convergence is going to occur in the media and entertainment space over the next five years,” he added. “We know what Ericsson is doing with its acquisitions from Tandberg to Red Bee, and Cisco has started dabbling in this space with its acquisitions (Collaborate, Assemblage, Threat GRID). There is certainly going to be supplier consolidation as the broadcast and multi-channel video programme distributor market continues to consolidate.”


Some really smart people So, Imagine had to be savvy in the way it aligned its strategies. How did Vogt apply what he knew from building IP networks to pushing Imagine in a new direction? “Harris spent close to a billion dollars in the last ten to 15 years on acquiring technology, although there wasn’t a very clear technology vision or strategy that aligned with all the great acquisitions,”


Charlie Vogt, Imagine Communications


www.tvbeurope.com August 2014


he said. “What we have successfully done is to dissect everything we had in the portfolio and do a good job of aligning it with where we know the industry is going. “If you are convinced it is going to move into a software-defined, IP-oriented, cloud-based, TV Everywhere landscape, then you have to start playing the technology innovation and M&A microscoping game in that direction,” he added. Vogt and his senior staff changed Harris into Imagine by dumping what felt more like a catalogue of products and switching to a solution-oriented business represented by three fundamental pillars (portfolios): applications, playout and networking.


“The only reason why you carry out M&A is if the market makes a left or right turn and you are going straight, or if


you took in some technology companies that have found their way two to three years ahead of your roadmap,” he said. “Everybody is on different timelines, and often it is the time-to-market that drives the behaviour within companies to acquire today.


“You do this assessment of ‘make versus buy’, and how long it will take you to get to the trial phase, the adoption phase, and to market. You look at technology, customers and people. That’s why you buy companies,” he added. “We’ve got a very robust R&D roadmap, and will spend $90 million to $100 million, but in the case of Digital Rapids it was doing very different things in software-based/file-based transcoding and encoding, and it had a very unique workflow management platform that we felt was really going to change the landscape.”


For Imagine to develop its own equivalent, assuming it had the intellectual property from a people standpoint, would have taken several years. “Digital Rapids was an easy decision because we are big believers in multi-screen TV Everywhere. Content is going to be distributed to thousands of different devices and the way content is going to be packaged, formatted and delivered is going to be very unique. Digital Rapids brought us some key technology,” said Vogt. “Regarding ‘Little Imagine’ (an in-company name): while it was developing specific encoders and transcoders, it actually had a next generation ABR technology that really hadn’t hit the market. “We found it to be a huge advantage for us, and both transactions line up in the category of ‘we can get to market a couple of years faster’,” he added.


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