Posts Tagged ‘SES’

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.

 

 

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.

 

 

Impressions of IBC 2012: M&A, Cloud, Multi-Platform, 4K, Efficient Operations, CiaB, and the “Return of Grass Valley”

broadcast industry technology trends, broadcast industry trends, broadcast technology market research, content delivery, market research, technology trends | Posted by Joe Zaller
Sep 20 2012

A previous version of this article appeared in the “Tech Thursday” Spotlight Section of TVNewsCheck

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Against the backdrop of the ongoing European debt crisis and the afterglow of the 2012 Olympics, nearly 51,000 visitors made their way to Amsterdam for the annual IBC trade show. Major themes of the five-day broadcast technology jamboree included vendor consolidation, buzz about new technologies for multi-screen content delivery and social TV, futuristic technology demonstrations, and several important new product introductions.

The broadcast vendor community got a little less fragmented on the first morning of IBC, with a merger announcement by two Norway-based video transport technology providers — Nevion and T-VIPS

Although no additional deals were unveiled at the show, vendor consolidation was one of the most discussed themes at IBC, and according to statements made by some of the leading vendors, there is potentially a lot more consolidation on the way.   

Newly acquired Miranda technologies made its debut as a “Belden brand” at IBC, and Belden EVP Denis Suggs was on hand at the show to meet customers and explain his company’s vision for the broadcast industry, and why they decided to buy Miranda in one of the largest broadcast technology M&A deals in recent years. 

In a nutshell, Belden saw the opportunity to acquire a cash-generating company with a top-class management team that’s growing faster than the overall market and jumped at it. Including Miranda, Belden now generates approximately $450 million a year in broadcast-related revenue, making it one of the industry’s largest players, and it appears they are not done doing deals in this space. 

Suggs said Belden views Miranda as a platform from which is can further expand its broadcast industry operations, and that it intends to support Miranda’s existing plan for further acquisitions.

Grass Valley CEO Alain Andreoli echoed a similar sentiment at his company’s press conference. He said that Francisco Partners, the private equity firm that owns Grass Valley, has a $3 billion fund behind it and will support Grass Valley’s efforts to become an industry consolidators.

When the dust settles, he said, Grass Valley may not be the largest player, but it will certainly be in the top three. Last year, Grass Valley bought PubliTronic, a provider of channel-in-a-box (CiaB) technology, to gain a larger foothold in the playout market. Expect to see Grass Valley and other players making additional strategic moves that help them enter attractive new market spaces.

But most IBC M&A talk centered on Harris Broadcast, which is currently being divested by its parent company. Although rumors were flying at the show about who might buy the division, its executives were tight-lipped. Harris Broadcast President Harris Morris would only say that the deal is progressing according to plan, and is on track to be completed as soon as the end of 2012.

New products and services based on cloud technology, multi-platform content delivery and social TV services dominated many demonstration and hallway conversations at IBC, particularly in the “Connected World” pavilion, where dozens of new and established firms displayed a host of products aimed at securing a place in this emerging ecosystem.

Despite the enthusiasm of vendors, many buyers publicly and privately expressed caution about the technology.

Critics of cloud technology cited immature technology, bandwidth limitations, security, and an unproven business case as barriers to its adoption. Likewise, broadcasters and content owners expressed concern over the “disconnect” between the desire of end-users to receive and consume video content on an ever-increasing number personal devices, and the ability of broadcasters to create sustainable and profitable multi-platform business models.

Cloud-based discussions at IBC ranged from real-world case studies of how EVS helped broadcasters set up private clouds to facilitate remote production of the Euro 2012 soccer championships and London Olympics, to practical solutions from Signiant and Aspera for managing the delivery of file-based content over IP-enabled and cloud-based infrastructure, to new solutions for cloud-based video production.

Cloud-based production is an emerging trend, but initiatives such as the ‘Adobe Anywhere’ initiative will prove to be a catalyst in this area. Taking cloud-based production to the “next level” are new firms like VC-backed start-up A-Frame, which is building from the ground-up a complete cloud-based video production environment that marries the experience of broadcast and post-production experts with forward-thinking IT-based software experts. 

On the multi-screen front, Ericsson introduced its first encoder based on HEVC/H.265 compression technology. The company says that its HEVC implementation offers the potential for users to reduce bandwidth by up to 50%, thereby enabling more efficient delivery of content over multiple platforms, including mobile networks.

Harmonic unveiled a new version of its ProMedia transcoder, aimed at enabling its customers to deliver an integrated multi-screen experience to their subscribers. Harmonic also introduced new members of its senior management team: CMO Peter Alexander, and CTO Krish Padmanabhan, who recently joined the company from Cisco and NetApp, respectively.

Noticeable by their absence on the Harmonic booth at IBC were the familiar Omneon and Rhozet brand names, which have now been absorbed into Harmonic. “Harmonic is a branded house, not a house of brands, and our singular focus is delivering excellent video quality to consumers everywhere,” said Alexander.

The Sony/SES Astra demonstration of live delivery of 4K images over satellite drew a lot of attention.

For many years, 4K images have been trade show “eye candy” for visitors, but at IBC 2012 Sony and SES showed that technology exists today to transmit high quality 4K images over satellite at a manageable 50mbit/s using h.264 compression technology.  The stunning live video images were delivered via an SES satellite to an 84-inch Sony Bravia 4K display.

The demo prompted speculation that 4K will be the “next HD” in terms of consumer adoption and broadcast infrastructure upgrades. Other observers took a more practical approach, saying that the industry might see 4K being used as a high-end production format in near to mid term, but that it will be a long time before broadcasters who have already spent millions on the transition to HDTV decide to upgrade again to 4K.

Indeed, when it comes to broadcast infrastructure upgrades it is operational efficiency, not higher resolution, which appears to be the primary demand of broadcasters. Thus, many vendors at IBC were promoting solutions designed to help broadcasters transition their operations to file-based and IT-oriented workflows. 

One of the ongoing initiatives in this area has been the development by a large number of vendors of integrated IT-based playout technologies, more commonly known as channel-in-a-box (CiaB).  These systems offer the promise of increased operational efficiency and significant cost savings through the integration of previously disparate playout and master control functionality into a single IT-based platform. Over the past several years, major vendors including Grass Valley, Miranda, Snell, Harmonic, and Evertz have offered products.

At IBC 2012, Harris became the latest entrant into the market with the launch of Versio, a CiaB system based on several of the company’s existing technology platforms including the Nexio server family, ADC automation, and Inscriber graphics. 

When describing the new Versio product at the company IBC press conference, Harris Morris said the No. 1 requirement for automated IT-based playout systems is reliability, and that this is an area where Harris Broadcast excels. Morris also emphasized that CiaB platforms rely heavily on automation technology, where Harris Broadcast is an established leader, making the company a natural choice for broadcasters considering integrated IT-based playout.

Although Harris Broadcast touted the fact that their Versio platform is based on the company’s existing technology platforms, it stopped well short of saying that the new system is a direct replacement for its current products, particularly its popular Nexio server family.

Instead the company described Versio as a robust cost-effective way for broadcasters to quickly add new services and digital subchannels channels, and to provide backup in emergencies.

“Channel-in-a-box should be about opening up new possibilities rather than limiting how a broadcaster can operate across multiple on-air scenarios,” said Andrew Warman, senior product manager at Harris Broadcast. “It’s limiting to look at channel-in-a-box as a system replacement for servers, automation, and other play-to-air systems. Broadcasters need freedom to build appropriate workflows for their operations, including external components.”

However, other vendors clearly see the CiaB market differently, and have taken a very different approach than Harris Broadcast, especially those firms that do not have an existing playout server business to protect. 

Snell Chief Architect Neil Maycock said that his company’s ICE platform is not only “ready for prime-time,” it is on the air today delivering high value content for major broadcasters.  Maycock also said that ICE has a unique architecture that enables it to scale from a single channel implementation, through a multi-location centralcasting model, to a large multi-channel playout environment.

PlayBox CEO Vassil Lefterov said he has built his entire business on disrupting the traditional server-based playout market. “We believe our singular focus on this application is a key advantage,” he said.  “Playbox has thousands of live channels on the air today and is working to re-define playout operations for many of our customers.”

Grass Valley, which like Harris has a significant video server business, took a more pragmatic approach.  SVP and CMO Graham Sharp said that “it’s likely CiaB and other IT-based playout systems may ultimately impact everyone’s server business, so we’ve taken the decision to cannibalize our own products where necessary by embracing IT technology, because if we don’t do it to ourselves someone else will.” 

Grass Valley was among the vendors with significant new products. Introductions included a new LDX camera platform that scales from a basic model to a high-end super-slow motion system; a new video server family, and brand new electronics for the Kayenne and Karrera production switchers.  Grass Valley said all its new products feature native 1080p processing, and provide straightforward upgrades via software.

Grass Valley also made bold claims about its future product plans, stating that by 2014 it will have replaced its entire portfolio with all new 1080p, IT-focused products. 

GV’s Sharp also hinted at a major NAB 2013 announcement from Grass Valley: “Next year we will introduce a completely new integrated IP-based platform that is totally format agnostic.” he said.  “We believe this new platform will enable a new way of working that we call non-linear production….”

All Grass Valley products, including those launched at IBC 2012, will be compatible with the new architecture, he said.

Sharp concluded GV press conference by saying: “If there is one take-away from this presentation about Grass Valley, it’s this: We’re back.”

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