Posts Tagged ‘ENPS’

Broadcast Vendor M&A: Ross Video Expands News Tech Line-Up with Acquisition of ADS

Broadcast technology vendor financials, Broadcast Vendor M&A | Posted by Joe Zaller
Mar 10 2014

Ross Video announced that it has acquired Automated Data Systems (ADS), a provider of newsroom computer systems (NCRS) and broadcast prompters based in La Crosse, Wisconsin.  Terms were not disclosed.

Ross Video is buying ADS for its EZNews product line, a newsroom editorial system used by small call-letter TV stations, educational institutions, and government agencies.

As such the EZNews platform is a potentially a nice bolt-on acquisition for Ross Video, which surprised the industry with the introduction of an NCRS product called Inception at IBC 2013.

As with its previous acquisitions, Ross Video appears to be leaving the existing team in place, and enhancing the product development capability of the acquired company. Bill Sacia, former President of EZNews, has already changed his profile on LinkedIn, and now describes his job as ‘”leading the transition for EZNews clients to the new evolving, feature – function merging, more powerful Ross Inception Newsroom System.”

David Ross, CEO and majority shareholder of the eponymous broadcast technology vendor, told me that the company plans to incorporate the EZNews team into the company’s Inception NCRS development team.  “EZNews is the biggest of the small players in the NCRS market,” said Ross.  “We like the people and we really liked the ideas they’ve developed for smaller stations, and we plan to add these to our Inception product line.”

More importantly for Ross Video, EZNews has approximately 200 customer installations that can eventually be converted to the Ross Inception platform.  “200 customers is significant,” said Ross.  “It took Ross Video a long time to get that many customers for OverDrive” [the RossVideo production automation system].

Although Ross says the company put in place a full data migration plan for porting all EZNews technology and features over to its Inception platform, he does not seem to be in a hurry to do so. “We will continue to support EZNews customers and things will remain business as usual for them.”

One reason for this is that the primary customers for the EZNews system are colleges and universities who typically have smaller budgets than the TV station market where Inception is aimed.  Because EZNews has educational discounts built directly into its pricing, it tends to sell for significantly less than a typical broadcast NCRS system.

However, because these users are training the next generation of broadcast journalists, Ross sees them “as a very important long term customer base for Ross Video.” Therefore, Ross says he also has a plan to make it easy and cost-effective for EZNews customers who want to switch to the Inception platform.

“For the next year, all existing EZNews customers can upgrade, at cost, to (the more fully-featured) Inception platform. They’ll end up getting everything in EZNews and everything in Inception.  It’s really a great deal,” added Ross.

Ross will also continue to provide support for another ADS product, a popular, low cost windows based teleprompting software system called EZPrompt, which has more than 6,000 customers.

Including ADS, Ross Video has acquired eight companies in the past four years:

Most recently, Ross bought mobile video provider MCP, and announced its intention to create a national sports production company through the introduction of what it calls “openTruck” to Break Open Sports Production Market.

 

Previous Ross Video M&A deals include:

 

  • Montalto: Routing switcher research and development team

 

  • Cambotics: robotic camera heads and pedestals (2012)

 

  • Fx-Motion: “Furio” robotic camera systems (2012)

 

  • Norpak: data insertion and Nielsen products (2011)

 

  • Codan Broadcast: NK Series routing switchers (2010)

 

  • Media Refinery: XPression broadcast graphics (2010)

 

The ADS purchase is a classic Ross Video move.  The company has strategically used M&A to expand its product portfolio and increase its solution footprint in the broadcast market.

The strategy appears to be working.

Although Ross Video is a private company, the CEO occasionally uses social media to provide some metrics about its performance.  In November 2013 Ross said his company’s sales have increased for 22 straight years after achieving 8% revenue growth in fiscal 2013 versus the previous year.

In previous postings, Ross said the company’s year-over-year revenue growth in 2011 and 2012 was 47% and 17%, respectively.

According to my conversation with David Ross, the strategy also seems to be working for the acquired companies. “We’ve bought a lot of really cool companies, integrated them into Ross Video, and within a few years we’ve managed to increase their revenue by 5-10x.”

Given this track record, and the company’s family ownership, Ross can afford to be choosey when it comes to acquisitions.   And these days there seems to be a lot more to choose from.  Ross says he averages 1-2 inbound calls per week from executives who want to sell him their companies.

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It remains to be seen how well Ross Video fares in the NCRS business with Inception and EZNews.

For many years, the NCRS market seemed like a two-horse race between ENPS from the Associated Press and iNews from Avid.  Although neither AP nor Avid break-out revenue from their news products, the two companies are widely believed to have the lion’s share of category revenue between them.

However, it seems this market has been heating up as of late.  The IBC 2013 launch of Inception by Ross Video was one of several interesting developments in this area.

Other NCRS contenders include France-based Dalet Digital Media Systems. In the fourth quarter of 2013 Dalet’s revenue from TV newsroom systems was $17.9m (€12.9m), up 48.3% versus the previous year, and represented 35.1% of the company’s total revenue in the quarter.

Other vendors including Bitcentral and Masstech have also made inroads into the news technology market.

Nevertheless, David Ross remains very confident about his company’s prospects, saying the ADS acquisition “is a great step for Ross Video.  We look forward to the opportunity to grow even more into the newsroom market.”

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Related Content:

Press release: Ross Video Acquires Automated Data Systems (ADS)

Why Ross Video Bought MCP – Will Introduce “openTruck” to Break Open Sports Production Market

Broadcast Vendor M&A: Ross Video Buys Mobile Production Firm, Intends to Create National Sports Production 

Broadcast Vendor M&A: Ross Video Bolsters Routing Line with Sixth Acquisition in Past Four Years

Dalet Revenue Grows 7 Percent in 2013 on Strong Sales of Newsroom Solutions

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