In a move that further broadens its broadcast services portfolio and capabilities in the TV industry, Ericsson has announced its intention to acquire media services company Red Bee Media, from an entity controlled by Macquarie Advanced Investment Partners, L.P.
The acquisition, which is subject to regulatory approval, supports Ericsson’s strategy to grow in the broadcast services market and takes advantage of its technology and services leadership to help broadcasters and content owners address the convergence of video and mobility. It will bring 1,500 highly-skilled employees, as well as media services and operations facilities in the UK, France, Germany, Spain and Australia. This will further strengthen Ericsson’s broadcast services business, which was started in 2007 and expanded in 2012 with the acquisition of Technicolor’s Broadcast Services Division in a €19 million deal.
With 1,240 of Red Bee Media employees being based in the UK, Ericsson’s UK business would grow to around 4,000 employees and with more than one-third working in the media services business, the UK will become a global media hub for Ericsson.
Since its foundation in 2005, Red Bee Media has established itself as a strong and diverse business with a growing number of customers around the world. It provides a range of media services; from media asset management to playout and digital video publishing, metadata services, multilingual access services and creative services to major broadcasters and broadband platforms. Red Bee Media, which is known for its high quality playout services, is also the largest editorial metadata provider in Europe, delivers more than 100,000 hours of subtitling per year for leading broadcasters.
Red Bee Media was formerly BBC Broadcast Limited. BBC Broadcast was created by the BBC in 2002, by placing a range of BBC channel creation and channel management services under one roof. It was part of an agreement with the British Government to create a commercial division that could supplement the BBC’s income from the television licence, thus keeping the licence fee increases down in the future.
On 1 August 2005, BBC Broadcast, together with its subsidiaries, was sold for £166 million to Creative Broadcast Services Limited, a company set up specifically for the purchase and jointly owned by Australian-based Macquarie Capital Alliance Group and Macquarie Bank Limited. The company was renamed Red Bee Media on 27 October 2005. Shortly before the sale, BBC Broadcast bought Broadcasting Dataservices from BBC Worldwide thus strengthening the EPG and programme metadata offering.
According to Ericsson, the Television and Media industry is undergoing an unprecedented transformation driven by consumers’ appetite for rich, interactive, anytime, anywhere entertainment. The confluence of communications, broadband and media technologies and the use of IP and mobile networks to generate and deliver such experiences is creating new opportunities in the ecosystem.
New services are expanding and re-defining the way consumers experience entertainment, placing new economic and creativity demands on businesses – whether they be broadcasters, telcos or other media companies – worldwide. According to the Ericsson Mobility Report June 2013 release, video is the single biggest contributor to traffic in mobile networks and this is expected to grow 60 per cent annually until the end of 2018.
“Ericsson is making a step change to our business, cementing our commitment to TV and broadcast services and continuing a journey we started in 2007,” says Magnus Mandersson, Executive Vice President and Head of Business Unit Global Services, Ericsson. “We can create value for broadcasters by making digital content more accessible, enabling monetisation of TV content more efficiently. Video traffic shows very strong uptake in the mobile networks and Ericsson can address the need of both broadcasters and telecom operators through our technology expertise and services capabilities.”
Ericsson’s core capabilities in hardware, software, systems integration and management/operations services have been deployed worldwide in the communications and broadband businesses to create success for many players. Ericsson provides innovative technology solutions for content acquisition, exchange, distribution, delivery and the provisioning of multi-screen entertainment experiences based on a 20-year, Emmy award winning heritage in media research and development.
Ericsson’s broadcast services expertise makes use of its industry leading position in managed services and serves leading regional and global broadcasters to bring enhanced efficiency into their business operations – being it live or thematic content.
Serving one billion subscribers worldwide, Ericsson is the leading provider of managed services for telecom operator networks. It has invested in processes, methods and tools in this segment for more than 15 years. In recent years, Ericsson has expanded this successful business model to other industries, such as utilities, transportation and the TV industry.
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.