NewTek’s Andrew Cross Discusses Acquisition, NAB Show Plans

The NewTek president and CTO offers details on Vizrt’s acquisition of NewTek and NAB Show plans.
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SAN ANTONIO, Texas—It’s been quite a pre-NAB Show week for NewTek, and it’s only half way over.

Vizrt and NewTek jointly announced Monday, April 1, that Vizrt was acquiring the maker of products like TriCaster, IP Series and 3Play, as well as creator of the NDI IP protocol for an undisclosed price.

Andrew Cross

Andrew Cross

Despite choosing the first of this month to make the announcement, this was no April Fools prank. The very real deal brings together two formidable technology juggernauts—one focused on the higher-end video market with real-time broadcast graphics and workflow solutions, the other with a portfolio of IP-based video production technology frequently used in the middle and lower end of the market.

Originally, this interview with NewTek President and CTO Andrew Cross was scheduled for April 1 at 9 a.m. to discuss NewTek’s plans for the NAB Show. However, Cross had to postpone the Q&A due to a pressing matter. It wasn’t till late in the afternoon that that matter became clear. Cross was knee-deep in the deal.

In this Q&A, conducted April 2, Cross discusses why NewTek took the Vizrt offer, how the companies’ philosophies align and their products complement each other, what the acquisition means for the workforces of both companies and many other related issues.

He also discusses, as originally intended, NewTek’s plans for the NAB Show.

(An edited transcript.)

TVTechnology: I would imagine that over the years NewTek has probably had offers from other companies about a merger or acquisition. How did the Vizrt buyout come about, and why did NewTek take its offer?

Andrew Cross: Half of our company has been friends with Vizrt for years and years. I have been personal friends with their co-founder [Petter Ole Jakobsen]. We have a lot in common. I know people don’t look in the market and see that, but we are probably the two companies that made their bets on software-based, real-time technology on computers.

Going right back to their beginning days, they made their software on Silicon Graphics workstations. It was software. Back then that was as crazy as us making Video Toaster on an Amiga.

In many ways we share a common DNA and belief since our founding.

Both of us made the very same bets when 95% of the market didn’t see things the same way.

We have known each other for years, and we collaborate a bit, but we exist in different markets. Then about a year and a half ago my friend, who is the co-founder of Viz, came down to visit San Antonio—his first time here. We went out for pizza, and we were just sitting there thinking, “Gosh, we’ve got so little in common, yet the same philosophy. What would it look like if we put all of this together?”

Everybody looks at companies in mergers and acquisitions for an overlap, but by far it makes the most sense when companies don’t have that overlap. That way you don’t say, “We both have graphics solutions,” and work out which one has to die.

Here we have this situation where they do the high end and we do the low end and the middle. They sell direct. We have a channel. We are strong in video mixing; they are strong in graphics.

We started going through the thought process of all of the areas where we are just unbelievably complementary.

He told me they just got this new CEO. He only just started. My friend said, “How about if I go tell him that we should take a serious look at this?” I said, “What the heck? Let’s start that conversation.”

That is how it came about. They didn’t say, “We want to come and eat up NewTek and make you a part of us.” It really was like, “Wow, what would it look like if we really put this together?”

If you think about our market, there are a couple of really large players who have evolved out of businesses that are 50 years old and the way TV stations were run.

We thought, what would it look like if we made a business that was formed to serve the IT-based production, which is clearly where the future is. That is why this came about and why it happened. I find it super exciting.

TVT: Andrew, you will continue on as president of R&D of the combined company and Vizrt President Michael Hallen will lead the business. What about the rest of the employees at NewTek and Vizrt? Are layoffs planned? Or, do you even know yet?

AC: I absolutely do know, and this is really key. First off, just philosophically NewTek and Vizrt are very aligned. But this is an acquisition that is really based on the strengths of both companies, so this is absolutely not a situation where we say, “We’ve both got graphics systems so we are letting one of the graphics teams go.” We are in fact both strong companies. We are both very profitable companies, and it would be crazy to mess with that. When you think about what we have as a combined entity, it’s really quite mind-blowing.

TVT: Is there going to be a relocation to Norway or San Antonio? Or, are both operations going to stay put?

AC: Vizrt is very much an international company. So the answer is clearly no. NewTek is going to stay in San Antonio. Vizrt is going to stay in Norway. When it is really hot in the summer, it means we have a good place to visit. And, I can tell you that when it is cold and wet in Norway in the winter, they’ll want to come and visit us.

TVT: Can you tell me about the financial side of the transaction?

AC: I am afraid I can’t.

TVT: When will the deal close, or is it closed now?

AC: The deal is signed, and the deal will close on a date to be determined, but very soon. My head is spinning with the lawyers and accountants. But it is very soon.

TVT: What about Tim Jenison, founder of NewTek? Will he have a role in the combined company?

AC: Almost everybody knows he has not been directly involved in NewTek for years now. He is involved in that he created the concept. We grew up in his garage, literally. But he has not been involved in NewTek for many years. So he will be about equally involved in this, in that NewTek is very much part of what he brought to the industry, and he wants to make sure his child, NewTek, which is 30 years old, goes to a good home.

I look at this very much as "we are the kid that didn’t leave home and stayed in Tim’s garage, but now we are 30 years old and it’s time for us to leave home, but our parents still really care about us and have a vested stake in us being successful."

TVT: Will the acquisition have any effect on sales channels or service?

AC: I am hesitating. The short answer is absolutely not. We are both successful companies, and the goal is to continue to be successful and to use the things we can do together to make us more successful—not suddenly cut out part of what we are doing.

NewTek very much will continue to sell the way we sell. As a matter of fact, we are more dedicated to that now because Viz sells in a different way. In many ways, this leaves us more committed to our individual strategies. Our channel is almost like a part of NewTek. They have been for years. Some of these guys have worked with us for 20 years or more.

We believe in them. They are a part of what makes us successful. They are part of why Vizrt liked NewTek. So we have no plans on changing that. In fact, we see it as a way to allow us to focus on our strengths there.

TVT: One thing Vizrt is known for is its powerful, real-time broadcast graphics. I was wondering if there might be some synergy between that side of its business and technology and NewTek’s LightWave 3D.

AC: That is an interesting question, and I just have to be completely honest and say I don’t know. I think between us, we have incredible technologies of which LightWave is one, and it probably is one that few people in the video market even know NewTek has or know its power. How we take that and turn it into something that impacts the industry in a bigger way, I honestly don’t know. I do know we have the technology and pieces that are incredible, and we need to work out how we put those building blocks together.

TVT: What about NewTek and Vizrt’s presence at the NAB Show? Separate or integrated together in one booth?

AC: We will have separate booths, certainly, at this NAB. Who knows in the future?

TVT: Can I infer from the answer to that question that both companies will maintain separate identities?

AC: That is exactly right. I think that we both have extremely strong brands in different parts of the market, and we see that as a strength. There are very few customers who sit down and say, “Should I buy NewTek or Vizrt products?” We don’t plan on changing that.

TVT: Will you be overseeing research and development at both companies in your new role as president of R&D?

AC: Probably. The honest answer is that I am so totally invested in making this work, making it successful. I am excited about this project. Where I fit in is almost secondary in my mind to my excitement about the deal and the process. And yes, I think I will be involved in R&D at both companies.

TVT: The reason I brought that up is I was wondering if you have any R&D priorities for technology between the companies.

AC: I think both sides have very different strengths. If you look at the real-time rendering and graphics capability on the Viz side, they have some absolutely groundbreaking stuff. On the NewTek side, we have a really good understanding of how you merge usability with innovation. Bringing both sets of skills together will clearly be my key goal.

I think those are defining characteristics of both organizations, and if we can harness both of them that will redefine a lot of things in the market, and that’s very much our goal.

TVT: NewTek has developed and nurtured the NDI IP protocol. Vizrt has supported the suite of SMPTE ST 2110 standards. Does the acquisition bring opportunities for a bit of cross pollination?

AC: First of all, I personally and NewTek generally are supportive of 2110. We have always thought one of the great things about IP is that the real standard is IP in the same way that on the internet there are JPEGs and PNGs. They serve different uses, and nobody says, “Gosh, JPEGs vs PNGs, who’s going to win?” It makes no sense because they both exist on a web page.

This is one of the great things about the IP world, which is the real standard was never 2110 or NDI. It was IP itself. And these things serve entirely different uses.

I think NDI has and will increasingly become an important standard, and I also think 2110 has a very valuable place in broadcast. There is really no change in our view of that, and I think if you talked to Viz, even the day before the acquisition or a year before, they would have given you the same answer, which is there are different uses for these things, and both of them are important.

TVT: Shifting gears a bit, what highlights can the industry expect from NewTek at NAB?

AC: There are probably two distinct buckets of things that we are doing at NAB. One is obviously NDI. We are announcing NDI Version 4, which improves pretty much everything. It’s certainly the biggest release we have made with NDI since its launch.

It runs faster, so you can get more channels of video. It has better quality at that same bit rate. It supports 16 bits per pixel, so it offers higher color accuracy. So, it goes beyond what SDI did.

It moves to a really new, clever way of transferring data over a wire itself, which we are calling Multi TCP. That means it can share bandwidth along a lot of different paths through the network. It is very cleverly written so it can ensure the network cards on machines can hardware accelerate it all so that it causes a low CPU load. Remember, our goal is to make this work on any computer system out there.

That’s the easy stuff—kind of the bigger, faster, better kind of thing. But the things that we are doing that I believe are also very disruptive are, you know NDI has always been a compressed format. So if you think we have compressed data flowing around the network, and there is absolutely nothing that stops you from taking that compressed data and storing it on disk. It takes no CPU time. You are only limited by the number of streams you would be able to record if you did this. You are only limited by how much network bandwidth you’ve got into a machine or multiple machines and how fast the drives are.

We are going to give away for free the ability to record any number of NDI streams straight to disk without any kind of recompression, which means CPU usage is zero. If you want to put a machine that just records all of your videos on the network, you can.

I think that disrupts the ingest market in a way, although I wouldn’t say it disrupts the ingest manufacturers. I hope we are making their lives easier by standardizing things. Making it so they have easy ways to integrate with IP that don’t involve needing lots of capture cards in a machine and lots of compression.

But we take it one step further because in the process of recording we support the process of synchronizing all of the streams. Even across multiple machines. This is really important because if you think about the progression in the industry, cameras have gotten cheaper and cheaper.

You and I can now afford to do multi-camera shoots, particularly with PTZs where you don’t even need operators. But the entertainment content you will get out of them is remarkably difficult because they are not synchronized.

So unless you genlock everything, you end up with four big files of some event, but you have to go through this manual process of resynchronizing everything.

By us putting the synchronization side of that into our recording, we totally solve that problem. So that you can record any number of streams, drop them onto a timeline and it is all synchronized.

We even allow you—if you use NTP [network time protocol], which is easy to use and free—to synchronize across multiple computers. Now the recording is done so the computers will even synchronize with each other.

You can be recording things one place in the world, another place in the world, any number of streams and things always synchronize. This is really important, so that in many ways NDI is not just applicable to people doing live video, but it is starting to become really important for those who want to do post-production as well.

Now, if you think about an NDI converter box, and we will be announcing some really cool ones at NAB, you just hook those up. You just record those streams, drop them into an NLE, and there is nothing else to do. It’s a groundbreaking workflow.

We will also have an Unreal Engine plug-in for NDI. We are putting in place a lot of the pieces for a broadcaster who wants to run in the cloud. It doesn’t rely on multicast. It can be used on Amazon Web Services.

TVT: You mentioned another bucket, not the NDI bucket. What is in it?

AC: Obviously we have the TriCaster, too, and we are really pushing the envelope there. Honestly, the thing we are showing, I think is so cool. It’s something we have been working on for years. It’s been my dream to make this work for years.

Here is the basic concept. TriCasters are used by people who want to make a show. But if you are really truthful about this, nobody creates their show on a video switcher. Everybody creates their show in something like Word—because you plan it and write out a script.

What we have done is make a system that allows you to literally bring in a Word document. It analyzes the document and then runs the whole show for you truly automatically. You can put your whole script—who says what, the title of the show, everything—into a Word document, import that into your TriCaster, and push everything to a teleprompter output and through the teleprompter feed automatically run the whole show.

TVT: That sounds amazing.

AC: It seems so obvious when one thinks about it. It’s such a cool way of working. Think about kids in a high school. How do they create a show? The school project is they write out the script. This means kids can now create and run an amazing looking show, and it does everything for them.

It means journalists can work with Google Docs to put scripts of their show that the editor can use. They can automatically bring that into the video system, and they can just run through that show.

You know how you put comments in on Word. If you want a clip to play while you are saying something, you just add a comment where you say it, and it just says play the name of the clip and we use AI to understand what is in the comment and then automatically play that clip for you.

If you want to switch to a camera, you just put in a comment that says “Show Phil,” and it will go through all of your camera inputs and find the one that is showing Phil and automatically show that camera. It makes making shows so much easier and so much more fun.

TVT: Anything else?

AC: The other thing is our IP Series higher-end video switchers. We are making them accessible to people who want to run them on their own servers, whether they are in the cloud or their local server rack. This is for people who want to virtualize, people who want to build productions where you can scale them up and down based on what shows you are running that day.

Think about it this way. We took our 44-input, 4K switcher and we allow it to be run on an off-the-shelf server for people. They can choose to run it in the cloud. That’s pretty groundbreaking and that is definitely where the industry is ultimately headed.

Those are the highlights for NAB, but I will tell you, right after NAB we have a whole bunch of other stuff coming. We’ve been busy.