Posts Tagged ‘RR Media’

SES Announces 1H 2016 Results; MX1 a €240 million Annual Revenue Business

Analysis, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
Aug 14 2016

Satellite service provider SES reported 1H 2016 results for its Video business of €665.7 million, an increase of 0.8% versus 1H 2015, and an increase of 4.1% when compared to the second half of 2015.  On a constant currency basis the Video business grew 0.3% on a year-over-year basis.    SESLogo

For the first half of 2016, the Video division contributed 70% of SES’s total revenue, an increase compared to the 66% contribution in 1H 2015, and the 67% contribution for the full year 2015.

SES’s acquisition of RR Media was not completed until July 6, 2016.   As such, no revenues from RR Media were included in SES Video’s first half results.  RR Media generated €63.2 million of revenue during the first half of 2016.

SES merged the former RR Media business with its SES Platform Services subsidiary.  The new subsidiary was rebranded MX1.

Update on MX1 Subsidiary

During SES’s investor day, Management disclosed the combined MX1 business is a €240 million annual revenue business with a backlog of €500 million (or two years of annual revenue).  The regional revenue breakdown is 70% Europe and 30% outside of Europe. Half of MX1’s revenue is generated by the resell of satellite capacity – with SES acting as the satellite service provider for 50% of this capacity.

For the full year 2016 the acquisition of the former RR Media business is expected to contribute €70 million of revenue to SES’s Video business (before eliminating intercompany revenue).

On the Company’s earnings call with analysts, SES’s CEO Karim Michael Sabbagh offered an anecdote on the SES’s initial synergies with RR Media by relaying a recent briefing by Avi Cohen, CEO of MX1 (and former CEO of RR Media) to the board of SES.  “…he [Avi] mentioned three key multimedia clients with whom they have served.  And he said had it not been for SES, we would not have signed them… this speaks for itself when you have the kind of capabilities that they have, that we have and the kind of market access that we have through our almost three decade long experience with these clients” said Mr. Sabbagh.

Update on Satellite Channel Developments

In its earnings presentation, SES reviewed data points on the channel growth over its satellite network during first half of 2016.

Total channels for SES’s Video business was 7,463 at the end of 1H 2016, representing an increase of 4.2% on a year-over-year basis, and sequential growth of 2.7% since the end of 2015.

HDTV channels distributed by SES grew 9.5% to 2,442 (32.7% of total channels).  60% of all channels are now broadcast in the MPEG-4 compression standard.  This compares to 54% in first half of 2015 and 60% at the end of 2015.

The channel count for Ultra HD (UHD) is now 16, versus eight at the end of 2015 and zero a year earlier.  Management highlighted the May 2016 announcement with Viasat to launch an Ultra HD sports channel.  The new channel will launch in Scandinavia in August 2016.

International markets outside of Europe and North America, including the faster growing markets of Latin America, Asia-Pacific, the Middle East and Africa, made up 38% of TV channels over SES satellites.  The channel count in this region grew by 1.7% during the first half of the year to a total of 2,850 channels.

The below slide from SES’s investor presentation illustrates channel and geographic growth of the Video business.

SES-slide 

Related Content

Press Release: SES first half of 2016 Results

Presentation: SES first half of 2016 Results

 

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

 

 

SES Completes Acquisition of RR Media; Renames MX1

Broadcast Vendor M&A, Media Services M&A, OTT Video | Posted by Josh Stinehour
Jul 06 2016

Satellite service provider SES today announced the completion of its acquisition of RR Media (NASDAQ: RRM), a provider of media services to the broadcast and media industries.  The acquisition was announced in late February 2016, but had been pending closing conditions and regulatory approvals.  RR Media’s shares ceased trading on the NASDAQ today.   SESLogo

As indicated in the original announcement, SES is merging the operations of RR Media with its Platform Services group to create a larger global media solution provider.  The new combined group will operate under the trade name MX1.  Avi Cohen, the previous CEO of RR Media, will serve as the CEO of MX1.MX1

The press release announcing the new trade name highlights the origin of MX1 from the below statement.

“Bringing it all together for the first time, MX1 aims to be the new number 1 in Media eXperience.”

SES’s new MX1 subsidiary will have 16 offices worldwide and six media centers.  MX1 is now responsible for distributing more than 1,000 TV channels, managing 440 channels of playout, and delivering content to over 120 subscription VOD platforms.

MX1 and SES’s HD Plus subsidiary will constitute the SES Media Solutions group led by Wilfried Urner.  HD Plus is a HD satellite TV offering in Germany.

Mr. Urner commented on the acquisition as follows, “We are confident that the new MX1 will leverage the expertise and success they have garnered in their respective key markets to expand their product portfolio. The addition of MX1 to the SES group is a first step in globalising SES’s video services business and in accelerating the completion of our goal to become one of the leading next generation media service providers”

Avi Cohen, CEO of MX1, added, “This is an exciting day for us as we introduce a new company to the industry and our new brand name and logo…This merger allows us to scale-up on a global basis and become the world’s leading media services provider, delivering next-generation digital video and media solutions to our worldwide customers.”

 

Related Content:

Press Release: SES Press Release on Completion of the Acquisition

Press Release: MX1 Reveals New Company Brand as a World-Leading Media Services Company

SES to Acquire RR Media for $242 Million in All-Cash Deal

 

 

© Devoncroft Partners 2009-2016.  All Rights Reserved.

 

 

Don’t Miss The Media Technology Business Summit at the 2016 NAB Show

Analysis, broadcast industry technology trends, broadcast industry trends, Broadcast technology vendor financials, Broadcast Vendor M&A, Conference Sessions, technology trends | Posted by Joe Zaller
Apr 16 2016

Media Technology Business Summit

1:00pm – 5:00pm, Sunday, April 17, 2016

Las Vegas Convention Center, Room N249

Open to all 2016 NAB Show Registrants

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2016 Devoncroft NAB Media Technology Busienss Summit

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Conference Agenda

1:00pm – Strategic Industry Analysis: Valuations, M&A, and Equity Finance

  • Joshua Stinehour, Principal Analyst Devoncroft

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1:25pm – Follow the Money: Trends Driving Media Investment

  • Joe Zaller, Founder & President Devoncroft

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1:50pm – Change is the New Normal: Transforming for Business Success in the New Media Landscape

  • Ulf Ewaldsson, SVP, Group CTO, & Head of Group Function Ericsson

 

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2:10pm – The Vendor C-Suite: Strategies for an Evolving Market

  • Louis Hernandez, Jr., President & CEO Avid
  • Charlie Vogt, CEO Imagine Communications
  • Larry Kaplan, Founder & CEO SDVI
  • Dan Castles, CEO Telestream

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2:50pm – The Broadcaster C-Suite: Trends Driving Investment Decisions

  • John Honeycutt, CTO Discovery Communications
  • Renu Thomas, EVP Media Operations, Engineering & IT Disney/ABC Television Group
  • Richard Friedel, EVP and GM Fox Network Engineering and Operations
  • Håvard Myklebust, CTO TV2 Norway

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3:30pm – Leveraging Hyperscale IT Infrastructure for Next-Generation Media Workflows

  • Michelle Munson, President, CEO, and Co-Founder Aspera, an IBM Company
  • Michael Koons, VP, Worldwide Systems Engineering Cisco Systems
  • Tom Burns, CTO, Media & Entertainment EMC/Isilon
  • Ulf Ewaldsson, SVP, Group CTO, & Head of Group Function Ericsson

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4:00pm – Service Provider C-Suite: Perspectives on Industry Trends

  • Chris Walters, CEO Encompass Digital Media
  • Ramki Sankaranarayanan, Founder & CEO Prime Focus Technologies
  • Avi Cohen, CEO RR Media

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4:30pm – AWS Keynote – “All In”: Cloud Transformation of the Media Industry

  • Alex Dunlap, General Manager AWS CloudFront
  • Sam Blackman, CEO and Co-Founder Elemental Technologies

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We look forward to seeing you there. Additional information on the Summit is available from the Devoncroft Partners website and the NAB Show website.

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© Devoncroft Partners 2009 – 2016. All Rights Reserved.

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Speakers Announced for the 2016 NAB Show Media Technology Business Summit

Conference Sessions | Posted by Josh Stinehour
Apr 04 2016

We are pleased to announce the full agenda and speaker lineup for the fifth annual Media Technology Business Summit at the upcoming 2016 NAB Show.

As a reminder, the Summit starts at 1pm on Sunday April 17th and is located in room N249 of the Las Vegas Convention Center.  The event is co-produced by Devoncroft Partners and the organizers of the NAB Show.  Admission is available to all NAB Show exhibitors and registered attendees (remember to bring your NAB Show badge).

Designed to be a thought-provoking kickoff to the 2016 NAB Show, this half-day conference examines the “the business of the media business” from the perspective of all levels of the media value chain.  It is also an opportunity to network with the media technology executive community ahead of the start of the exhibition.

An overview of the conference is included below.  Full details are available on the NAB Show website.

 

2016 NAB Show Media Technology Business Summit

 

1:00pm – Welcome and Introductions

Presenter:

  • Joe Zaller, President Devoncroft Partners

 

1:05pm – Strategic Industry Analysis: Valuations, M&A, and Equity Finance

Josh Stinehour of Devoncroft will take the podium for his annual (enthusiastic) presentation on developments in the media technology sector.  If you have any final announcements you would like Josh to consider for his presentation, let him know.

Here is a link to the NAB Show website individual session listing.

Presenter:

  • Josh Stinehour, Principal Analyst Devoncroft Partners

 

1:25pm – Follow the Money: Trends Driving Media Investment

Devoncroft founder Joe Zaller will present a summary of key data derived from a variety of broadcast market intelligence projects including the 2016 Big Broadcast Survey, the industry’s definitive demand-side market study. This market data will highlight the technology investments made in 2015, expectations for technology spend in 2016, and key trends driving technology investments.

Here is a link to the NAB Show website individual session listing.

Presenter:

  • Joe Zaller, President Devoncroft Partners

 

1:50pm – Change is the new normal: Transforming for business success in the new Media landscape

As the Media industry undergoes massive transformation, only the strongest or most considered will survive. To win at a time when change is the constant requires technology shifts, operational re-organizations and completely new business models that address the challenges of the new Media landscape of consolidated customers, and ever more fickle consumers.

Ericsson’s SVP and Group CTO, Ulf Ewaldsson, will reflect on how Ericsson’s own transformation, and that of Telecoms and ICT, has parallels with the Media industry, and why Ericsson has invested to become one of the largest global TV & Media providers of products and services. The session will also highlight some of the latest technologies that underpin success, and just how different a business mindset is needed to excel.

Here is a link to the NAB Show website individual session listing.

Presenter:

Ulf

2:10pm – The Vendor C-Suite: Strategies for an Evolving Market

CEOs from four leading media technology suppliers will debate the most important commercial issues facing the industry, and discuss their strategies to position their companies for success in a rapidly evolving marketplace.  The panelists will also offer opinions on how changes in the business environment are impacting vendors and customers.

Here is a link to the NAB Show website individual session listing.

Moderator:

  • Joe Zaller, President Devoncroft Partners

Panelists:

NAB 2016 Devoncroft Vendor CEO Panel

 

2:50pm – The Broadcaster C-Suite: Trends Driving Investment Decisions

Senior technology executives from leading broadcasters will offer informed perspectives on the most significant industry trends affecting technology budgets and the technology purchase decision.  The audience will benefit from an emphasis on the business implications of technology decisions to broadcasters.

Here is a link to the NAB Show website individual session listing.

Moderator:

  • Joe Zaller, President Devoncroft Partners

Panelists:

NAB 2016 Devoncroft Broadcaster CTO Panel

 

3:30pm – Leveraging Hyperscale IT Infrastructure for Next-Generation Media Workflows

A panel of executives from well-known IT vendors operating in the media technology sector will offer the IT community perspective on developments in the media sector. Participants will also share opinions on the implications of broader technology advancements to the sector. In particular the discussion will focus on the role of the IT vendor in the ongoing transition of the media technology sector to take advantage of technologies such as IP and virtualization.

Here is a link to the NAB Show website individual session listing.

Moderator:

  • Al Kovalick, Media Systems Consulting

Panelists:

NAB 2016 Devoncroft IT Panel

 

4:00pm – The Service Provider Perspective on Industry Trends

A panel of executives from leading media service providers will discuss views on both technology developments and deployment considerations for media organizations.  Discussion topics will include solutions for multi-platform content delivery, the economics of outsourcing, how service providers can leverage their scale to deliver increased performance and agility, and how next-generation data center architecture may impact the media ecosystem.

Here is a link to the NAB Show website individual session listing.

Moderator:

  • Josh Stinehour, Principal Analyst Devoncroft Partners

Panelists:

NAB 2016 Devoncroft Service Provider Panel

 

4:30pm – AWS Keynote – “All In”: Cloud Transformation of the Media Industry 

Amazon Web Services and Elemental leaders discuss the unprecedented impact of the cloud on media and entertainment industry business models. Alex Dunlap, general manager of Amazon CloudFront, and Sam Blackman, CEO and co-founder of Elemental, will share insights about media leaders who are going “all in the cloud”. The session will discuss cutting edge end-to-end media workflows, the advantages of video processing and delivery from the cloud, and how Amazon’s 2015 acquisition of Elemental represents the future of the media industry.

Here is a link to the NAB Show website individual session listing.

Presenters:

NAB 2016 Devoncroft AWS Keynote

 

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

 

 

SES Video Revenue Grows 7.5% in 2015

Analysis, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
Mar 03 2016

Satellite service provider SES reported full year 2015 results for its Video business of €1,354.9 million, a 7.5% increase versus 2014.  On a constant currency basis the year-over-year growth was reduced to 2.2%. SESLogo

For the 2015 year, the Video division contributed 67% of SES’s total revenue, a slight increase when compared to the 66% level of contribution in 2014.

In SES’s presentation to investors, Management highlighted several commercial developments within its Video business.  In particular, SES highlighted the securing of new contracts and the expansion of existing customer relationships with several high-profile media organizations including the BBC World News, Deutsche Welle, Viasat, Scripps Networks Interactive, StarTimes, Canal Holdings, and Televisa.

Also a part of the earnings release, SES announced the acquisition of RR Media, a provider of media services to the broadcast and media industries.  The Company intends to merge the operations of RR Media with its Platform Services group to create a larger global media solution provider.

 

Update on TV Channel Counts

The earnings release reviewed the TV channel growth over SES’s satellite network during 2015.

Total channels were 7,268 at the end of 2015, representing an 11.3% year-over-year growth versus the end of 2014.  Management disclosed that nearly 60% of all channels are now broadcast in the MPEG-4 compression standard.

HDTV channels distributed by SES grew 18.3% to 2,230.

The channel count for Ultra HD (UHD) is now eight in total.  Those channels are pearl.tv, Fashion One 4K, Airtel 4K, Dish UHD Promo, High 4K TV, INSIGHT, Nasa TV UHD and UHD-1.  In addition, a commercial agreement was signed in July 2015 to provide Sky Deutschland with additional capacity for Ultra HD broadcasts.

The European market accounted for 2,600 of the TV channels distributed by SES, which represents 40% of SES’s total channel count.  Channel growth in the European market was 9% in 2015.  HDTV channel growth in Europe was 26% year-over-year, reaching a total of 675.

In the North American region, SES ended 2015 with 1,744 channels, which is 24% of the total channel count.  HDTV channels increased by 3% in the region to over 1,200 channels.

International markets outside of European and North America (including the faster growing markets of Latin America, Asia-Pacific, the Middle East and Africa) made up 40% of TV channels over SES satellites.  The channel count in this region grew by 24% to a total of 2,900 channels at the end of 2015.  HDTV channels doubled to over 300 during the year.

The below slide from SES’s investor presentation illustrates the channel and geographic growth of the Video business.

 

SES-Investor-Slide

 

Business Outlook

During the call with analysts, CEO Karim Michel Sabbagh added commentary on the position of SES’s Video Business and the rationale for the RR Media acquisition.  Sabbash stated, “And despite the fact that we have a leading position, unchallenged position, in the video segment across the value chain, our view is that we can grow much further, and this was the rationale for us to think through how do we expand our media services capability and led us to the conclusion that the acquisition of RR Media and the merger of RR Media with SES Platform Services is going to be a highly accretive business.”

 

 

Related Content

SES Press Release on 2015 Financial Results

SES Presentation of 2015 Financial Results

 

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

 

 

SES to Acquire RR Media for $242 Million in All-Cash Deal

Analysis, Broadcast Vendor M&A | Posted by Josh Stinehour
Feb 26 2016

Satellite service provider SES announced an acquisition agreement with RR Media (NASDAQ: RRM), a provider of media services to the broadcast and media industries.  SES intends to merge the operations of RR Media with its Platform Services group (“SES PS”) to create a larger global media solution provider.SES_Platform_Services_logo

During its 2015 earnings release, SES indicated the contract backlog of SES PS was over €300 million.  By comparison, the RR Media contract backlog as of September 30, 2015 was $262 million.

Wilfried Urner, Chief Executive Officer of SES PS, commented, “RR Media has successfully developed the capability to manage and deliver premium content effectively, helping its customers to reach a global audience over multiple satellite, cable TV, IPTV, online and mobile platforms. SES, as the largest global platform for video in terms of reach and channels, adds global scale and considerable insights from the successful development of SES PS in Europe.”

SES will pay all-cash for the acquisition of 100% of the shares of RR Media at a price of $13.291 (USD) per share. The consideration equates to an Enterprise Value of USD $242 (USD) million, which represents a 52% premium to RR Media’s share price on February 25, 2016.

During RR Media’s Q3 2015 earnings release Management had issued 2015 revenue guidance of $140 million to $143 million with adjusted EBITDA in the range of $17.6 million and $20.4 million.  Using the midpoint of this guidance, the implied valuation multiples are 1.7x 2015 Revenue and 12.7x 2015 adjusted EBITDA.  As part of SES’s earnings release for 2015, management indicated the acquisition is anticipated to be earnings accretive in the first year.

RR Media is expected to generate between $160 million and $170 million for the full year 2016. The growth estimates for 2016 are based on recognizing the full contribution of two acquisitions made by RR Media in 2015 for Satlink Communications and Eastern Space Systems (ESS).

The announced acquisition has already been approved by the Boards of Directors of both SES and RR Media.  It remains subject to regulatory approvals and the approval of the shareholders of RR Media.  The transaction is expected to close in Q2 or Q3 2016.

Commenting on the announcement, Avi Cohen, Chief Executive Officer of RR Media, said, “SES Platform Services is an important industry player with the capabilities to service strong upper tier clients. With the combined infrastructure and industry expertise, the integrated company will have the capability to deliver innovative solutions to top tier clients, emerging markets and global customers. RR Media’s growth strategy has focused on top tier client and increasing scale. This deal achieves both of these strategic goals.”

 

 

Related Content: 

SES Press Release: RR Media to Merge with SES Platform Services, Creating a World-Leading Global Media Solutions Provider

RR Media Press Release: RR Media to Merge with SES Platform Services

 

 

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

 

 

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