Ericsson Sells Majority Stake in Media Solutions But Retains Services

Ericsson has at last settled the immediate future of its media activities after almost a year of review, retaining full control of its Red Bee Media services business while selling off a majority 51% of its Media Solutions division.

It is not clear whether Ericsson would have liked to sell both businesses but was unable to find a buyer for Red Bee Media, which lost £27 million ($38 million) in its last financial year.

However, Ericsson had separated the two businesses and revived the Red Bee Media brand in November 2017, having earlier absorbed it into Ericsson Broadcast and Media Services. This suggested that Ericsson had already decided to retain Red Bee Media and revert to that name, which was well known to its existing customers who are mostly in the UK, but also including scattered clients in Australia, France, Spain, Germany, Finland, Sweden, Canada, the US and Abu Dhabi. It began as BBC Broadcast in the UK but was spun out and eventually became a significant provider of content delivery and playout services, ending up being acquired by a then expansionary Ericsson in July 2013.

Red Bee Media now has 2,500 employees worldwide across 8 media hubs and distributes over 2.7 million hours of programming, with clients including broadcasters BBC, UKTV, ITV, BSkyB, TV4, TV5Monde, Canal+ and Channel 4, as well as a few enterprise customers like Barclays Bank. It is still UK centric, delivering the majority of video on demand (VoD) services in the country, including the BBC iPlayer. While that will be a concern to Ericsson, the company is hoping that recent innovations such as development of virtualized live playout allowing customers to launch and commission channels with limited live content on a pay-as-you-go basis, will help drive further international growth.

In retaining Red Bee Media while selling the technology and products division, Ericsson is effectively reversing its earlier expansion strategy achieved largely through acquisition. This led to the creation of Ericsson Media Solutions as a major business providing hardware and software video compression technology for both contribution and distribution, as well as advertising, content personalization and video delivery platforms. This largely began with the purchase of pay TV technology firm Tandberg Television for $1.4 billion in 2007, followed by other significant acquisitions such as HyC Group, Fabrix Systems and the Mediaroom IPTV middleware platform from Microsoft. The latter was rebranded as the MediaFirst OTT platform with an upgrade path offered to Mediaroom customers. A 51% stake in all this has now been sold for an undisclosed sum to One Equity Partners, which was spun out of JP Morgan bank and has investments in industrial, healthcare and technology sectors in North America and Europe. The two firms will form an independent company to develop the video technology company, which Ericsson insisted will now have “strong and committed financial support”. This move is expected to be completed in Q3 2018. 

Let us know what you think…

Log-in or Register for free to post comments…

You might also like...

Audio Over IP - Making It Work - Part 2

To fully leverage the benefits of IP networks we need to think in IT terms. Just replacing the acronym MADI or AES with IP is insufficient as all we end up with is a very complex, poorly utilized, static network.

A Brief History of IP - Routing IP Networks

Network routing is a phrase that is bandied about broadcast forums liberally. But what exactly does it mean to route an IP datagram? And why is it important for broadcast and radio stations?

Viewpoint: The Role Of SaaS: Using Software As A Service For Media Processing And Playout

Video consumption is changing with increased demand for video content anytime, anywhere, on any screen. As broadcasters and pay-TV operators look to deliver more content, including live, VOD, catch-up TV and start-over TV, to subscribers on a wide range of…

Audio Over IP - Making It Work - Part 1

Building and operating IP networks is much more than just about saving money on infrastructure costs. Its success is deeply rooted in the ease of flexibility, scalability, and inter-connectivity that it can provide. And one of the greatest benefits of…

Google Leaves RDK Trailing with Android TV Operator Tier

Android TV is finally being adopted on a large scale by pay TV operators three years after its launch and seven years on from the original unveiling of its predecessor Google TV. One casualty could be the RDK (Reference Design…