Interactive TV News Round-Up (II): Ericsson, Technicolor, NBC, NewFronts, Ooyala

Digitas NewFront 2012

--Ericsson to Acquire Technicolor's Broadcast Services Division

--NBC to Participate in NewFronts

--Ooyala's Bismarck Lepe: NewFronts "a Step in the Wrong Direction"

Because the [itvt] editorial team has been working on The TV of Tomorrow Show 2012, we are covering stories in this issue in round-up/summary format.

  • Ericsson said Tuesday that it has submitted a binding offer to acquire the Broadcast Services Division of Technicolor. The deal, which is expected to close around mid-year, is valued at EUR 19 million, with a potential earn-out, based on anticipated 2015 revenues for the division, of up to EUR 9 million. "The closing of the acquisition is subject to relevant customary regulatory administrative approvals and consultations," the company states in its press materials. "The acquisition will bring approximately 900 highly skilled professionals and playout operations located in France, UK and the Netherlands serving several leading broadcasters, and will allow Ericsson to substantially increase its current broadcast operations in terms of channels managed and households reached. The announced acquisition intention is in line with Ericsson's managed services strategy to broaden its capabilities in the broadcasting area. Ericsson applies the managed services business model established in telecom operations, to improve efficiency, introduce innovation and increase revenues for the broadcasters." Said Magnus Mandersson, EVP and head of Ericsson's Global Services Business Unit: "As the TV industry is undergoing fundamental changes with the transition to multiplatform, on-demand television, teaming up with a trusted partner enables broadcasters to meet the increasing commercial and technological complexity and competition in the TV market. We combine our service and technology leadership with strategic investments in playout operations, broadcast capability and competence."
  • [itvt] recently reported (see the article published on itvt.com, February 27th) that AOL, Google/YouTube, Hulu, Microsoft Advertising and Yahoo! had teamed with advertising agency, Digitas, to launch the Digital Content NewFronts (DCNF), upfronts for online video and other forms of digital media. Last week, a number of other companies agreed to participate in the NewFronts, including Vevo, Digital Broadcast Group and--perhaps most significantly--NBC Universal. AdAge's Michael Learmonth has more.
  • In related news: Bismarck Lepe, co-founder and president of product strategy at online video platform provider, Ooyala, has published a blog post, in which he argues that, by mimicking traditional TV upfronts, the NewFronts "miss the mark." "The idea of online media companies trying to sell video inventory through an upfront process feels like a step in the wrong direction," Lepe writes. "TV advertising and online video advertising are fundamentally different. Upfronts obscure the real opportunity of online video advertising, which comprises real-time viewer data, precise ad targeting, social features and click-to-buy options. The power of online video advertising comes from matching paid content to viewers, locations and devices in real time--not selling blocks of ads months in advance. TV broadcasting is a chainsaw and online video micro-casting is a scalpel. They both cut, but one is a more precise instrument. Recent findings show that brand recall resonates deeper with corresponding online video ads compared with standalone TV commercials, especially for the coveted 13- to 34-year-old demographic. Another advantage that online video has over traditional video distribution channels--especially for large tech companies like Yahoo! and Google--is the ability to offer a comprehensive, multiplatform viewing experience. It's the difference between reaching viewers only when they're on the couch, remote control in hand, and reaching viewers whenever--and however--they choose to connect. What's more, tech companies hold the power to offer advertisers unrivaled access to consumers and their preferences. Advanced content recommendation technology will soon deliver paid content that matches a viewer's likes, dislikes, device type, location and more. Innovation is tricky. It's iterative. There are hits and misses. Digital New Fronts are interesting because they show the online video market is maturing. But as online media companies explore new ways to generate revenue, they should remember that online video ads have the most power when they are deployed in real time to receptive viewers, not sold months in advance like TV paid messages."
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