12.16.2005 11:04 AM
With two major acquisitions, Thomson eyes NLE, IPTV and mobile markets

About two years ago, Thomson looked at the emerging landscape for broadcast, video production and content distribution, and decided to make its move. Last week, the company announced that it had acquired the Thales Broadcast & Multimedia (TBM) business unit. The week before it acquired PC-based HD editing company Canopus. Both will complement Thomson’s Grass Valley Broadcast & Networks business in a number of key markets, such as broadcast, professional video production and government.

The two deals, valued at $156 million and $109 million, respectively, culminate a two-year strategy to extend the reach of Thomson’s Grass Valley business and make it more competitive in an era of manufacturer consolidation.

This two-year plan is not just about external growth, but internal growth as well, said Jeff Rosica, vice president of strategic marketing and technology at Grass Valley.

Many see Thomson’s new activity as a reaction to the on-going industry merger, such as Avid Technology buying Pinnacle Systems, and Harris Broadcast acquiring Leitch Technology. But Rosica said the acquisitions of Canopus and TBM are “more about opportunity than trying to defend ourselves.”

Joe Turbolski, director of marketing and sales operations for the TBM line of transmission products, was very positive about the merger and how it would help his business.

In buying TBM, Thomson gets a full line of products and platforms for IPTV services, video-on-demand, mobile TV and digital TV, and radio broadcasting systems and equipment. Although terrestrial transmission in the U.S. is not a growth business, broadcasters around the world are continuing to purchase DVB systems in large numbers. It’s estimated that TBM holds the No. 2 market share position worldwide for over-the-air transmitters.

The delivery of content over an IP infrastructure and sending video to mobile devices are two important markets for Thomson going forward. Yet, is there a danger of Thomson getting too big, as several companies did (e.g., Dynatech and Tektronix) in the mid-90s? Rosica said the Thomson business is run efficiently and includes fail-safe provisions that keep executives not only focused on growing the business but also on making the existing businesses profitable.

Thomson has also entered into a strategic partnership with Thales, the parent company of TBM, that will make Thomson a preferred customer of Thales’ video content management and distribution solutions for in-flight entertainment, security, and defense applications.

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