❝ The landscape of the broadcast and media industry is changing … the reality is that this consolidation with mergers and acquisitions
will never stop .❞
APB PANELLISTS
6 NEWS & VIEWS
April 2018
Is consolidation in the broadcast and media technology supply industry now just a fact of life ?
BY PETER BRUCE
In February this year , the announcement of the acquisition of Snell Advanced Media ( SAM ) by Belden perhaps did not come as a huge surprise . The merger with the Grass Valley brand is poised and expected to be formally unveiled at 2018 NAB Show . It was clear to many that SAM was up for sale and Belden ’ s name often came up in the rumour mill ; Belden had already made several purchases in recent years , acquiring Miranda in 2012 , Softel in 2013 and significantly Grass Valley in 2014 . It was apparent that Belden had the cash to go further .
The collection of companies that Belden has acquired may seem a small gathering of non-cable and high IP ( intellectual property ) value companies for Belden , famous for its wires . But there is much more to these simplified brands .
SAM itself was already a consolidation of Snell and Wilcox , Pro-bel and Quantel . Merging them with Belden ’ s Grass Valley brand will combine them with the already consolidated brands within Grass Valley .
Grass Valley itself has been through a number of mergers and acquisitions , beginning with Tektronix in 1974 . It was then acquired by Thomson in 2002 . Of which Thomson had already acquired Philips Broadcast , which had already taken in Bosh / Pye TV making BTS , who had already acquired companies such as Alamar . In 2005 , Thomson Grass Valley acquired Canopus . In 2009 , Thomson sold Grass Valley to a private equity firm , and it was subsequently acquired by Belden in 2014 .
In all , Grass Valley now encompasses around 20 originally separate brands as a result of the continuous consolidation that has happened over its many years of broadcast supply .
The newer sub-industry of the OTT world has also gone through its consolidations , which seems to have peaked ( to
date ) with the acquisition of Elemental Technologies by Amazon in 2015 . Broadcast suppliers gasped at the rumoured price of around US $ 500 million .
In the broadcast RF field , there has been a huge consolidation of the big rivals . In early 2017 , Vislink Communication Systems ( already merged with GigaWave ) was acquired by xG Technology , the parent company of Integrated Microwave Technologies ( IMT ) — also has already merged Nucomm and RF Central .
At trade shows and conventions today , you look at peoples ’ name badges to see what the latest company they have merged with is . Consolidation is happening faster and faster , and it seems it will continue at an even faster and unabated rate .
Are you getting confused and losing track ? Well , there is more to come .
The landscape of the broadcast and media industry is changing . However , is it contracting ? Well , no . The IABM DC Global Market Valuation and Strategy Report indicates the valuation is growing — although slowly . However , for those who have followed the report , the services section has been growing every year to the point where services currently account for 56.6 % of the broadcast and media industry .
Additionally , when you look at the technology , the real move away from hardware to software and services is happening at a great pace . The new entrants into the supply side of the broadcast and media sector are from both the top and the small ends of the scale .
From the top end , we see these newcomers at the major exhibition and conventions coming from huge conglomerates from the IT and telecom sectors — the multi-billion club , rather
❝ The landscape of the broadcast and media industry is changing … the reality is that this consolidation with mergers and acquisitions
will never stop .❞
than being from the multi-million club from inside the industry , which was commonplace in the past .
The new owners at the front of the exhibition halls are the likes of AWS , EMC , Verizon , Telstra and so on , who form a new billion-dollar turnover per year club .
The concern might be that , because of their huge potential in the form of fi- nancial resources , our beloved broadcast industry will become just a sub- or sideindustry to their main activities .
Over the years , we have seen many bigger boys appear at the big shows with great stands and then disappear only a few years later . This time , it may be different though ; the digitisation and move to services has meant that their core business and technology complements what they are already doing now in other technology sectors .
At the lower end , an amazing number of small enterprises are springing up , providing niche IP with software solutions that are able to adapt at an incredible rate . The concern with these guys is that often the business model is for them to
Louis Boswell CEO CASBAA
APB PANELLISTS
Graham Stephens CTO Media City Development , Malaysia be acquired and absorbed into one of the big guys three to four years down the line — effectively becoming an R & D department for the big guys .
So , is it better to absorb an existing company into a bigger one , rather than develop your own solutions ?
Well , the reality is that technology is moving so fast that a larger company cannot wait for an unknown outcome from its R & D team to get a solution . Perhaps this is the best way to go ; if purchasing a smaller company fast-tracks the solution , then so be it .
For those who understand and track the broadcast and media industry , the feeling may be that several companies could be over-paying for the cost of restructuring the industry — particularly when it comes to the mergers and acquisitions of the medium-sized companies with others that have lived in the same space .
Why are all these mergers and acquisitions happening in the first place ?
Firstly , like all companies in the ‘ high tech ’ sector , we are transitioning from hardware to software / services . Secondly , the consolidation of technologies from parallel industries is happening at a faster and faster rate . Thirdly , the end-user is having to transition to the new technologies to stay alive .
The recent IABM End User Survey shows that technology purchases are focused on the move to over-the-top ( OTT ) and multi-platform content delivery first on the list , with IP infrastructure third on the list . These technologies are suited to the IT or telecom industry , while the traditional companies are having to consolidate and adapt to address their customers ’ rapidly changing requirements .
The reality is that this consolidation with mergers and acquisitions will never stop . The rate of change will never be so slow again .
Peter Bruce is IABM Director , APAC
Goh Kim Soon Senior Vice-President Broadcast Engineering Mediacorp
Shad Hashmi
Vice-President , Digital Development , Global Markets & Operations , BBC Worldwide Asia