Ericsson’s latest catch is London based playout, content discovery and metadata specialist RedBee Media, to flesh out its portfolio in broadcast services, which has long been a focal point for the whole group. But Ericsson may have been equally attracted by RedBee’s client portfolio, which may be UK centric but includes a number of big names in other countries as well. On top of the BBC, ITV, Channel 5, BSkyB, Virgin Media, BT and YouView in the UK, RedBee Media clients also numbers Liberty Global, Microsoft and France Telecom Orange among its customers. The Liberty Global account is particularly significant since Ericsson has little presence there and RedBee Media was chosen as exclusive provider of metadata services for its Horizon hybrid platform, being slowly rolled out across all its markets. In April 2013 RedBee had another big win with a multi-year deal to provide playout and media management services for BT’s live sports channels, including English Premier League football.
Then most recently of all Red Bee Media late last month announced a multi-year deal with Nordic pay TV platform Canal Digital DTH to supply rich metadata services spanning Norway, Sweden, Denmark and Finland. There is also speculation that RedBee Media is working with Intel over metadata that would help drive its forthcoming TV service, including booth linear and on demand programming.
Ericsson hopes that RedBee will provide a leg up into such accounts for the various other broadcast technologies it has acquired, largely through acquisition over the last six years, although with internal development making an increasing contribution.
Formerly a telecommunications equipment company that later entered the mobile phone business as well, Ericsson was hit hard by the dotcom collapse of the early noughties laying off thousands of staff. But it gradually returned to profitability and in the process actually managed to pick over the bones of the UK Marconi Group, which had suffered much worse from the dot com collapse.
But then it embarked on a major shift of direction into TV through acquisition of Tandberg TV in 2007 for $1.9 billion, bringing pay TV infrastructure with a world leading position in H.264/MPEG-4 encoding, which then was just entering the video ecosystem. It has since reinforced its position through several more acquisitions, such as the broadcast services division of French media company Technicolor (formerly Thomson) for €19 million in 2012 and then in April 2013 the significant takeover of Microsoft’s Mediaroom IPTV software business. Like the latest RedBee buy, Mediaroom propelled Ericsson into major accounts such as Telefonica, which was building its Global Video Platform (GVP) for worldwide IPTV and OTT distribution around Mediaroom. Also significant was a partnership with CDN company Akamai, although that was less focused on video than in enabling priority for the relatively small amounts of data involved in ecommerce transactions over cellular networks, in their joint development of Mobile Cloud.
Ericsson had also made some significant infrastructure acquisitions relevant for its TV business along the way, such as Redback Networks in 2007 to obtain carrier edge routers suitable for IPTV distribution, and the CDMA2000 and LTE business of Nortel’s carrier networks division for $1.18 billion in 2009.
RedBee brings Ericsson 1500 staff in broadcast services staff of which 1240 are in the UK and the rest scattered around operations in France, Germany, Spain and Australia. The move will make the UK a major media hub for Ericsson, with around 4000 employees there in total, which is a natural step for a Swedish group.
RedBee itself has diversified progressively since its foundation in 2005 when it was spun out of the BBC’s channel management services in a sale for £166 million ($260 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. It was then renamed Red Bee Media in October 2005.
RedBee subsequently strengthened its position in European multilingual subtitling and translation services by buying German specialist Titelbild Subtitling and Translation GmbH and Mundovisi’n, the largest independent subtitling and audio description company in Spain. These made the company into the largest supplier of subtitling, signing and audio description services. Then in August 2011 Red Bee Media expanded into the burgeoning content discovery market by buying TV Genius, again for an undisclosed sum. That was also a European centric operation so Ericsson was looking somewhat top heavy in that market, although the Mediaroom acquisition rebalanced the group towards the Americas, especially after BT ditched the platform for its BT Vision hybrid IPTV/DTT service.
Apart from Telefonica, significant Mediaroom customers include Oi Telecom in Brazil, Telus and Bell in Canada, and biggest of all AT&T.