Devoncroft Digest — June 27, 2010

Posted by Joe Zaller
Jun 27 2010

Here’s a recap of some of the items that caught my eye over the past week or so.

Broadcast Technology Vendor News

Another M&A Deal — RGB Buys Ripcode

In a multi-platform, multi-format world, video transcoding is one of the technologies that everyone needs.  But transcoding is a tough business with fierce competition, and it’s considered by many to be a commodity product.  This makes it tough for pure-play transcoding vendors (which is why most of them will tell you that they focus on workflow optimization).  All of the above makes it an interesting market to watch, so I took note when I read that Ripcode has been purchased by RGB networks. I always thought Ripcode was a pretty interesting company.  They raised a lot of money for their platform and they had a different approach to others in the market.  It will be interesting to see how they perform as part of RGB. 

To read more about this, check out Dan Rayburn’a Business of Video Blog, which has complete coverage of the deal here.

 

Evertz Delivers Good Results for Q4 and Full Year

Evertz Technologies delivered pretty good results for their Q4 and full year, topping the expectations of equity analysts. 

Here are some highlights from the company’s earnings press release here.

Revenue for Q4 was C$75.3m, down 3% versus the same period a year ago, but up 14% over the previous quarter.

In terms of geographic split, sales in Q4 from the US and Canada decreased by 28% versus the same period last year, but this was partially offset by a 41% y/y increase in international revenue (which Evertz defines as markets outside of the US and Canada).  International revenue rose by 23% versus the previous quarter, while sales in the US and Canada decreased by 28%.

Revenue for the full year was C$286.5, a 9% y/y decline. 

Annual revenue from the US and Canada declined 26% versus last year, while international revenue was up by 24% over last year.

The company’s gross margins slipped a bit to 58% (versus 61% last year).  On the earnings conference call, the company attributed this to pricing pressures and the cost of international expansion.

Overall, this was a strong performance from Evertz.  The company’s international growth is particularly notable. 

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Wegener Issues Preliminary Results

Wegener, which was delisted from the NASDAQ earlier this year, issued preliminary operating results for the third quarter ended May 28, 2010. Final results for the third quarter of fiscal 2010 will be released on July 12, 2010.

According to the company’s press release  preliminary operating results for the third quarter of fiscal 2010 were revenues of $2.1 million and a net loss of approximately $(487,000) or $(0.04) per share compared to revenues of $2.9 million and a net loss of $(883,000) or $(0.07) per share for the same period in fiscal 2009.

Company President & CEO Troy Woodbury said that “bookings performance in the third quarter was an improvement over the first and second quarters of fiscal 2010, but there is significant room for improvement.”

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French Employees Protest Grass Valley Sale

TVB reports that nearly 200 Grass Valley employees at the company’s facility in Rennes France went on strike to protest the shutdown of production. Grass Valley, which has been for sale for what seems like forever, is one the broadcast industry’s most storied names. 

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Dolby Opens R&D Center in China

Dolby Labs announced that it’s first “from the ground up” R&D facility outside of the US will be based in China.  In the company’s press release, Dolby VP Mahesh Sundaram said “China is strategically important to Dolby. The establishment of Dolby China’s R&E Center is an important milestone as part of our continued commitment to China and innovation.”  The facility will focus on sound technology.

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Technicolor Opens New Lab in Palo Alto

Meanwhile, French technology provider Technicolor (formerly known as Thomson) has announced that it is planning a new lab in Palto Alto, CA.  The company says the new lab will focus on the personalization of digitally delivered content, and enhance the company’s research skills in content discovery.   The company also says it chose Palo Alto for its proximity to excellent universities and for the potential for interaction within the Silicon Valley technology ecosystem.

 

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Broadcast Technology Vendor Confidence Beginning to Return

According to an article in TVB Europe, the IABM (the association which represents broadcast and media technology suppliers worldwide) has published the results of a new study about industry confidence.  The result — the worst of the recession appears to be over in the broadcast and media technology sector and vendors are feeling increasingly optimistic about the future.

The IABM says that 74% of vendors who participated in their poll are response anticipating better business next year than last, and that 47% of those surveyed are already reporting better order volumes than expected.  However the study also found that the industry is facing strong pricing pressure.

Disclosure: Devoncroft and the IABM partner on market intelligence.

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Other Items of Interest:

TVB reports that the new PricewaterhouseCoopers 2010-14 Global Entertainment and Media Outlook predicts that advertising revenues remain fragile in nature and spending is unlikely to return to former levels, and that by 2014, the U.S. advertising spend is expected to still be 9 percent below its level in 2007.

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NetApp Files 10K with SEC 

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Following April Announcement, John Malone Formally Steps Down as DirecTV Chairman 

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According to Dan Rayburn, here’s the “best article by far” about Google TV: “Google TV: everything you ever wanted to know” – Best article by far on the subject by Engadget. 

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The Wall Street Journal reported that News Corp Want to Buy Rest of BSkyB, but that Sky is holding out for more money.

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Harmonic was upgraded by Merrill Lynch, who say that the Omneon acquisition could be significantly accretive in 2011 

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Cablevision bought Bresnan Communications for $1.4Bn

 

 

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Market Research Note of the Week:

Innovation Rankings of Broadcast Technology Vendors – The Top 30 Globally

In keeping with the theme of top 30 rankings, let’s now turn to one of the most important metrics for any technology company – innovation.

The product side of the film & broadcast industry is driven by technology and innovation.  All vendors strive to create techniques that will make their products stand out from the competition.  Thus innovation is a very important component of the brand image and reputation of vendors in this space.

To find out which broadcast technology vendors are considered to be most highly regarded in terms of innovation, more than 4,000 broadcast industry professionals were  asked to rank broadcast technology vendor brands for “Innovation” on a scale of 1-10 — with 10 being best in the market, and 1 being worst in the market. 

There’s a broad mix of vendors included in these ranking, including both audio and video and audio companies.  There are also interesting similarities and differences in terms of the types of products produced, geographic location and company size.  So let’s look a little deeper into these results….

To see the full results, included three ranking tables and analysis, please follow this link.

You can find other 2010 Big Broadcast Survey (BBS) here:

The Top 30 Broadcast Technology Vendor Brands by Overall Opinion, Ranked, Globally and Regionally

The Top 30 Broadcast Vendor Brands by Net Change in Brand Image.

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