Broadcast services and technology provider Satellite Information Services Limited (SIS) is to withdraw from the Outside Broadcast (OB) market, citing commoditisation of the market and contract renewal difficulties. It took the decision following a strategic review of its OB activities. It is understood that some 240 jobs are at risk.
SIS’s Chief Executive Gary Smith said that it had become apparent that the Outside Broadcast market had become a commodity marketplace, where price was the dominant factor. “Our difficulty in reaching terms with BBC Sport over the renewal of their sports contracts offered a vivid reflection of the problem.” The BBC sold its OB operation to SIS in 2008, and more recently has sought bids for sports OB work in separate lots.
Smith said that as a significant full-service provider in the Outside Broadcast market, SIS had maintained a large fleet of state-of-the-art trucks and equipment and employs more than 200 highly talented staff. “Our business has been geared to long-term commitments and strategic relationships, with a commitment to delivering the highest professional standards at competitive prices. This is true across all of our business, not just in the OB market. We have always sought to be competitive in our pricing, but we have never been prepared to sacrifice quality just in order to deliver a cheaper service. In view of the pricing pressure for long term contacts for customers such as the BBC, we have come to the conclusion that the Outside Broadcast market, as it is today, no longer offers an arena in which it makes sense for us to continue to operate,” he stated.
Smith explained that SIS would be immediately engaging with those who have an interest in acquiring the company’s Outside Broadcast capabilities. He anticipates that the SIS Outside Broadcast division will cease trading at the end of March 2014 when the BBC contract comes to an end. Reassuring existing customers, suppliers and staff, he confirmed that the company remains committed to operate as normally over this period and will meet all contractual commitments.
Smith said that the company had made this decision “with great regret”, recognising the outstanding qualities of the Outside Broadcast team at SIS, and the contributions they had made to the broadcasting industry, the company and its reputation. He nevertheless argued that the decision would now allow the company to focus with renewed confidence and determination on the other parts of its business, where its commitment to excellence continued to be reflected in strong market demand and a high level of customer satisfaction.
Broadcasting sector trade union BECTU branch secretary Sean Kelly said: “By inviting bids for one third of our work in ten separate lots, BBC Sport opened the way for competitors to bid at marginal prices, ignoring overheads, whilst SIS OBs did not have that luxury. The structure of the tender process seemed designed to disadvantage SIS OBs. BBC Sport has destroyed the company which was BBC Television Outside Broadcasts, together with the livelihoods of members who had worked loyally for the BBC for most of their careers.”