HD ENG on Vitec Group agenda with Nucomm, RF Central acquisitions

Last month, the Vitec Group acquired RF Central and Nucomm — two leading microwave vendors, both of which are among the suppliers of ENG radios, antennas and systems needed to complete the massive 2GHz TV Broadcast Auxiliary Service (BAS) relocation project Sprint Nextel is funding.

As part of the relocation project, BAS licensees will replace their analog systems with digital equivalents operating on 12MHz-wide channels. While that alone isn’t the totality of what’s required for microwaving HD live shots, it’s an extremely important component.

HD Technology Update spoke with Vitec Group CTO Jerry Gepner about the acquisition of the companies and what it might mean in terms of making HD ENG a reality.

HD Technology Update: At NAB2007, Sprint Nextel’s Mike Degitz said that only 3 percent of eligible TV BAS licensees had installed all of their new digital microwave radios, antennas, etc. That leaves a huge opportunity for vendors involved in supplying the equipment needed to complete the 2GHz BAS relocation. Isn’t it a bit counterintuitive that Nucomm and RF Central would sell to Vitec Group at this particular moment when the push is on?

Jerry Gepner: I would feel pretty comfortable saying the BAS relocation opened wider a window of opportunity, but sometimes there is a greater opportunity as part of a larger group to capitalize on what could be seen as a reshuffling of the market. Those sorts of things don’t come along all that often in any business.

HDTU: Is that why the Vitec Group decided to get involved now in the microwave transmission market?

JG: First of all, we purchase companies with a long-term view. Why get involved? Because we had owners willing to sell for starters, and it’s a natural fit for what Vitec does. If you look at what our broadcast companies do, we are primarily an accessories company.

Now, a lot of people think of accessories as things you put on stuff. But intercoms are an accessory — an important one — but it’s not core acquisition technology. Portable power absolutely is an accessory, camera support, robotics. So, this is a natural strategic fit for us.

HDTU: Will both Nucomm and RF Central continue to operate independently, or will there be a consolidation?

JG: The brands themselves are going to continue to exist. Both companies as brands will continue to exist, which is something Vitec Group companies are known for. We have several competing brands that both continue to thrive — for instance Sachtler and Vinten. Both make camera support equipment for the professional marketplace. Both brands thrive.

RF Central’s brand, particularly RF Extreme, and Nucomm’s brand — there’s room in the marketplace for both. Now, that doesn’t mean we will not try to coordinate things like back office operations and coordinate sales initiatives to get the greatest market share. Potentially, we could even consolidate procurement because if you have two people making similar products and there’s an overlap, you want to take advantage of those sorts of strengths. But the brands themselves absolutely stand on their own.

There are two sales forces; there are two companies. We are not moving anybody. One is in Hackettstown, NJ, the other is in Carlisle, PA. Their workforces continue to exist and expand. In fact, they are both growing and will continue to grow.

HDTU: The Sprint Nextel-funded 2GHz TV BAS relocation project positions broadcasters for HD ENG. Certainly it removes the RF system expense from the equation. The obstacle seems to be the price of HD MPEG encoders — $25,000 to $30,000 apiece. As one chief engineer told me, with eight ENG vans, that’s a quarter of a million dollars, which is beyond his budget. What will happen to encoder pricing going forward?

JG: Encoder technology, like any other technology, is coming down in price, and we all know that. You threw out the $25,000 to $30,000 figure. It wasn’t all that many months ago that that was $40,000. I remember buying HD encoders that were $60,000 when the first TANDBERG and ASTRA encoders came out — they were $50,000 to $60,000 a copy.

We are starting to see with the advent of FPGA (field programmable gate array) technology — and this is something where both companies are strong, particularly Nucomm — all of their stuff is FPGA-based. The beauty of FPGA is you can load a new core into the existing FPGA without having to make any hardware changes, and all of a sudden, the box does something different.

It’s still expensive, but it’s probably not as expensive as buying dedicated hardware. And it’s a lot more seamless, so somebody can buy technology now.

HDTU: Even with FPGA technology, committing to HD ENG is still a major financial undertaking for a station, isn’t it?

JG: I recognize this. The move to HD is a tough economic discussion because it’s not going to bring in a dime more for the advertising. So, it is pure expense. You don’t see any additional revenue coming in on the other side, but if you can buy hardware that lets you get there very easily and cost effectively, it’s easier to do.

We are formulating a strategy across both companies that will let you get to HD. Most people don’t know that Nucomm’s radios right now have three different kinds of modulation built into them. Depending on what you need and what you want to spend, you can have all three forms enabled on the radio. The same is going to be true on the encoder side.

This may not extend strictly to MPEG-2. Using this approach you can also enable other encoding technologies. We are seeing the emergence of a lot of competing codecs. We have MPEG-4 Part 10, the H.264 codec gaining a lot of support. It may have a place in news. I think as a complement to a lot of the file-based and PC-based workflows out there, it definitely has a place in news. MPEG-2 has been the workhorse, very well established with high quality.

These are all codecs that can be loaded into the FPGAs pretty much whenever the broadcaster is ready. So, it doesn’t have to be as painful, at least operationally. Is it going to cost more? Yeah, it’s going to cost more. It’s as simple as that. Is it going to cost $25,000 per encoder more? I can’t say specifically, but probably not. Just because the technology will allow us to do things more efficiently, the likelihood of someone needing an external box is pretty low.

From a microwave standpoint, unless somebody wants to go HD tomorrow, where they’d likely need an external box, in as little as six months, there will be products on the market that will take HD-SDI in directly and do the coding onboard — on the back of the camera or sitting on your fixed link. Even more importantly, it will be the same basic product we are selling today.

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