DigitalTV: You recently took over as CEO of Thales Broadcast & Multimedia. What entities does the new Thales incorporate?
Chase: We have completely changed our name and we have consolidated all of the entities such as Thomcast, Comark, Comwave, under the new banner.
DigitalTV: What is the basic product range?
Chase: The broadcast piece refers to our traditional businesses, which were analog transmitters, high power range, low power range, radio transmitters, microwave transmitters, and so on. But we also have a very nice range of multimedia products-stream servers, gateway products-between "MPEG" and IP and back again.
DigitalTV: There seems to be some crossover between the product lines of Thomson Multimedia and Thales. Aren't there some products that are in competition between the two companies?
Chase: As is the case with our industry these days, sometimes you find yourself partnering and sometimes you find yourself competing. They [Thomson Multimedia] have a very large presence in the home, like receivers. We are very much a business-to-business supplier.
DigitalTV: How was the name Thales chosen?
Chase: Thales was the name of a Greek mathematician. He was a very smart man. And, we are part of a nine-billion dollar company, and a fair amount of research was done, worldwide, to find the name. It connotes an image of high tech and thoughtfulness.
DigitalTV: Were you a corporate outsider, or did you work your way up the ladder internally?
Chase: Before this I was at Compression Labs, which is an encoding company in Silicon Valley. And then, three years ago, I joined Thales, then called Thomson CSF, at our U. S. operation based in Southwick, MA. I've been in the industry since 1989.
DigitalTV: How big is Thales, both revenue- and people-wise, and where is it located?
Chase: We bring in about $200 million dollars and we are headquartered in Conflans, France, about 25 km west of Paris, and we have operating companies in Switzerland, Germany, France, and the U. S. We have a worldwide sales force, with about 20 people in the United States as well as a presence in Asia, Europe, Africa, and South America.
DigitalTV: How does this compare with the previous status of the separate companies? In other words, is the sum greater than the parts?
Chase: We took the existing companies, combined them, and changed the name. Initially, there was a lot of confusion, even among our customers who had bought products from us for years, about the difference between Thomson Multimedia and us.
DigitalTV: Thales is active in servers. Isn't it a bit late to be going after server customers?
Chase: You're right, there are some very strong players in the server market. But servers apply to many of our customers and what they are doing with video, as we can bring programming close to the network edge. That is why we are interested in servers. But, as our mission statement says, we are committed to open standards.
DigitalTV: One of the problems for all of the manufacturers is that the move to HD and DTV has slowed. That, in turn, has held up the purchase of new DTV transmitters, which had been expected to be a "gold rush" a year or two ago. What will Thales' strategy be in the U. S. to ride this out?
Chase: We are not seeing a slowdown. In the U. S. market last year we had a 43 percent growth of bookings and a 34 percent growth in sales. What we are seeing is that some customers want to come out very quickly with a high-power solution, while others want to deploy a beachhead solution-which means "just get me started"-and in some cases customers are saying they want the lower-power solid state approach. So, one of the brand new things we showed at IBC was a 10 to 400-W frame unit that we are calling Affinity. We are seeing a lot of different types of requests for solutions. Thales is the largest supplier of broadcast transmitters in the world, by far.
DigitalTV:Harris got out in front of the curve and sold more DTV transmitters-to the early adopters at least-in the U. S. than anyone else. And, they did a pretty impressive job globally as well. What is Thales going to do to entice the remaining transmitter prospects to your solutions?
Chase: Harris is a strong competitor and we have a lot of respect for those guys. But a fundamental underlying driver behind that phenomena is that the broadcasters, according to the FCC mandate to have to go digital, were the VHF ones, a traditional strength of Harris. Whereas, our traditional strength has been in UHF and high-power. So, although Harris took an early lead, the market share numbers for us have been steadily increasing and in fact, although Harris has a slightly larger installed base than we do now, we believe that we now have the majority of the strategic agreements signed. Such as Paxson, NBC, and so on. The race is not always to the swift. And, the vast majority of transmitters have yet to be installed. We are in there fighting it out every day.
DigitalTV: 8-VSB versus COFDM or ATSC versus DVB-do you take a position, or are you attempting to be neutral?
Chase: We trust our customers. What we try to do is be their best technology partner. About 50 percent of the transmitters we ship are DVB and the other 50 percent are 8-VSB [ATSC]. So, we are prepared to go where our customers want to go.
DigitalTV: As the CEO, do you see global broadcasting as a growing, shrinking, or flat market?
Chase: We see it as growing. The digital revolution in the United States is being closely followed by the digital revolution abroad. Our customers see broadcasting as one of many ways to reach their viewers. They are very interested in reaching them via satellite, streaming video, and so on.
DigitalTV: Can you foresee a time, a few years out, where the market for digital transmitters will be saturated? When that time comes, what will you do to build revenue?
Chase: That is an open discussion within Thales. There are roughly 1,700 TV stations existing in the U. S. and a relatively finite number around the world. Some of those stations will want to improve their power, but this [the saturation] is a natural phenomenon. We have to continue to grow the multimedia portion of the business.
DigitalTV: We cannot ignore the acts of terror in New York. But the whole broadcast and multimedia business had been down already. There have been massive layoffs and cutbacks. This is certainly going to make that worse. Any comment?
Chase: I can't foresee how this tragedy will affect our industry, except regarding our customers and friends who were located in the World Trade Center Twin Towers. We lost some people we work with. The most direct impact is sorrow and a deep sadness for the families. We are in shock. A few days ago, right after the event, there was an industry conference call held, organized by the broadcasters in New York, which included Dielectric, Harris, and ourselves, to determine what could be done to help the stations affected to get back on the air. I'm proud of our team and how they are handling it. I told them, "don't worry about the money, do what you need to do." We've pulled back transmitters from some customers and rerouted them to New York and rented a trailer for one customer. We also put 40 of our people at the disposal of local broadcasters.
Douglas Sheer is a contributing writer for DigitalTV.
Thales Broadcast & Multimedia www.thales-bm.com
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