Ericsson has added to its broadcast services portfolio with the announcement that it is to acquire Red Bee Media. Following on from the acquisition of Technicolor’s playout division one year ago, Ericsson is backing its stated intent to become a global player in broadcast services.
Red Bee is a full service playout provider, noted for its contract to play the BBC channels to air. Red Bee spun out of the old BBC Broadcast department, which was responsible for playout of the BBC channels as well as branding and promo production.
Red Bee is controlled by Macquarie Advanced Investment Partners, which will sell to Ericsson following approval from relevant regulators.
Broadcast Engineering spoke exclusively to Thorsten Sauer, Head of Broadcast Services at Ericsson. So 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.
Existing contracts
At the time of the sell-off from the BBC, Red Bee signed a 10-year contract for playout services with the BBC that expires 2015, although it has recently been extended to run past the Brazil Olympics in 2016.
The BBC also recently renewed its contract with Red Bee for access services until July 2019. The new deal will see Red Bee Media continue to provide subtitling, audio description and signing services for the broadcaster’s portfolio of television channels. Under the terms of the new contract, Red Bee Media will deliver more than 60,000 hours of access services per year on behalf of the broadcaster.
Red Bee’s full roster of clients includes UK’s Channel 4, and it has recently announced it will be providing playout and media management services for BT Sports’ three new channels that launch Aug. 1, 2013.
Ericsson will gain a business with offices in the UK, Australia, France, Germany and Spain, complementing its current business in Sweden, Netherlands, France and UK.
The closing of the acquisition is subject to approval from relevant regulatory authorities and other contractual conditions. After completion, Red Bee Media will be incorporated into Ericsson's Business Unit Global Services.
