The crude and politically incorrect expression “Putting more lipstick on the pig” is classically used to describe attempts to make a corporate sale more attractive. This comes to mind around the obvious machinations going on at Ericsson around the NAB 2017 show in Las Vegas this week.
Just before Ericsson sells its TV assets – we listed most of them a few weeks back – Tandberg TV, Azuki, Mediaroom, Red Bee, Fabrix nPVR, Envivio encoding, Technicolor Broadcast – in a fire sale for a $1 billion asking price – it has announced as many deals as it can, related to those same TV assets, in a bid to raise the price and conjure some interest. We suppose that in the excitement, Ericsson employees who work in this division want to go out with a bang, not a whimper.
The list of announcements includes Telstra of Australia becoming the first customer to buy into the renamed Media First system that was Mediaroom, since it was acquired. The deal is only really at the production level – what Ericsson describes as virtualized video processing – nothing more than cloud based Workflow and encoding.
In September Ericsson said it would do a deal with Intel to shift media data centers entirely to the cloud at the same time as it struck a deal to make Media First interoperate with Android TV set tops
Ericsson said at the time it would collaborate with Intel to build a cloud-centric media infrastructure based around virtualized media applications combining Ericsson’s HDS8000 Hyperscale datacenter system and Intel Rack Scale Design to transform media datacenters to carry out media processing, media delivery and cloud DVR, based on harnessing micro-services. This seems to us simply Mediaroom on a cloud server, scalable depending on what you are doing at any point in time – such as bulk VoD encoding or streaming a live sports event.
Telstra has always been an Ericsson fan, and has had a long term love of LTE Broadcast along with continual trials of this Ericsson favored technology. It and will install MediaFirst Encoding Live, MediaFirst Encoding On Demand, MediaFirst Packaging, and MediaFirst Management Controller.
Another TV deal at Latin America’s Televisa this week also features the Ericsson’s AVP Encoder running HEVC encoding, Multiplexer and HEVC receivers with an integrated DVB-S2X demodulator for DTH.
Televisa will use it to up its investment in HD services distributed through ATSC broadcasts in Mexico. No other country in Latin America uses ASTC (apart from Guatemala although that’s in Central America rally), so this is not going to affect Televisa’s OTT service Blim, which runs as an SVoD throughout the entire continent.
Yet another Ericsson deal this week is with the Inspur Software Group, a cloud computing and big data service provider, which will partner with Ericsson to give it access to more business in China – basically hosting Media First cloud services for Chinese customers.
And it has already lined up its first customer in Shandong Cable Network, an existing Ericsson customer for the past 4 years, which is taking the next step to its VoD by taking its preparation to the cloud.
Meanwhile Ericsson is also putting together a content discovery strategy at last, but only for broadcasters, bringing together a large trailer library in Internet Video Archive, complete with meta data and images, with ColorTV, a video indexing specialist, and Austrian recommendation specialist XroadMedia. Ericsson’s discovery ecosystem will be delivered through a single API in real time, the company says. The offering offers 14,000 sources of video globally and a portfolio spanning 10 million films and titles.
Yes, but shouldn’t it have seen that it needed deals of this nature prior to announcing that it is seeking strategic alternatives for its TV business? It could be purely a technical issue, but others have managed to retrofit discovery services to the old Mediaroom, so Ericsson should have been able to do this far earlier and any new acquirer of this business may want to undo several of these deals, the moment it takes control.
And to top it all off, the most significant issue will be just how desperate Ericsson is to sell this cluster of technologies off. It announced new figures this week, with a huge loss of SEK 10.9 billion ($1.24 billion) for the first quarter, taking in a further SEK 8.4 billion ($956 million) in provisions on customer contracts, SEK 3.3 billion ($375 million) in asset write downs and SEK 193 million in restructuring charges. Pass me the lipstick.