When Grass Valley called, PubliTronic's world changed forever

Sometimes a simple phone call can make all the difference in the world.

This past summer, Harold Vermeulen, a 46-year old engineer and entrepreneur who started a company called PubliTronic in the Netherlands, was happily realizing a vision he had in 1997 to help content distribution networks replace aging (and expensive) master control suites throughout Europe and the Middle East with a fully integrated, IT-centric system that cost a third of the price to deploy.

The integrated playout system features three primary components: an automation system, a server and a graphics (channel branding) engine. Secondary features can include closed captioning, EAS, foreign languages and second audio programming (SAP) functionality.

After about three years in the business, his company found some success in the UK and emerging markets like Singapore and the Middle East, but he always felt confident he could expand and reach new markets that needed such technology. The problem was that he had limited resources to move the company to the next level and bring it to new markets and countries that were sure to adopt a similar cost-effective approach.

Then came the phone call that changed everything. U.S.-based Grass Valley was calling to inquire about its interest in PubliTronic’s technology and the company’s future growth strategy. After some discussion, Grass Valley liked it so much it said it wanted to buy the company.

In his mind (during the call), Vermeulen told himself that his company was not for sale, but his heart said otherwise.

“We were not for sale when I got the call, but we had the ambition to grow the company as quickly as we could, and I soon became excited by the idea of merging with a global organization like Grass Valley,” he said. “At the time, we had some momentum in Europe, but our global presence was very fragmented (Singapore, Middle East, Australia) and our resources were limited. It was a very nice phone call, to say the least.”

As of Oct. 12, 2011, PubliTronic became a wholly owned subsidiary of Grass Valley, with all of PubliTronic’s products to be rebranded as the Grass Valley K2 Edge server line. Vermeulen was simultaneously named vice president of media playout solutions at Grass Valley.

Alain Andreoli, president and chief executive officer of Grass Valley, said he made the call after completing a bit of due diligence on PubliTronic (as well as several other integrated playout system suppliers). The more he learned of the small Dutch company, the more he liked what he saw — and that included Vermeulen himself.

“When we began to focus on PubliTronic, we were very impressed because we saw much more than what we had heard about the company,” Andreoli said. “And we like Harold and see him as a key transforming executive, a rising star, that can help us as a business moving forward. What we also like is that the culture of the company is very entrepreneurial, very young and proactive. We need to inject such a culture into Grass Valley. It’s good for us.”

Andreoli said Grass Valley sees a big upside to the integrated playout market segment, as only about 10 percent of the facilities worldwide that need playout have converted to such systems. The remaining 90 percent, he said, will come on board in the next five years.

Many refer to this category as “channel in a box,” but Vermeulen said his technology is so much more.

“Channel in a box is a single PC where all content is locally stored and played out. That’s the low end,” Vermeulen said. “It does not scale up easily to multichannel operation. What we are doing with integrated playout systems is replicating all of the sophisticated features of a traditional master control suite. We’re targeting the high end with this technology, and there are other vendors that are beginning to see what we see.”

For Vermeulen, integrated playout systems are not a new idea. That’s why he founded the company in 1997. They worked with cable and satellite operators in the early years that were just getting their TV services started, didn't have a lot of money to build live studios and needed unmanned systems that could run reliably and completely automatically.

“We grew it from there to the broadcast area and found a number of early adopters,” Vermeulen said. “Our customers adopted our technology because we could help them do something that was harder and more costly to do in the traditional way. For example, they wanted a lot of interactivity (SMS feeds, etc.), and that grew as the economy cycled up and down. Over the past few years, the bad economy across the world has really helped our business. But, again, we saw this coming a long time ago.”

Today, PubliTronic’s technology is used by the BBC, MTV and Nickelodeon in the UK (and up to 80 more channels for Viacom throughout Europe), as well as by the CNN Airport channel in the U.S. to support the automated channel playout. (PubliTronic, now Grass Valley, will also help launch several new channels at Crawford Communications in Atlanta in the next few weeks.)

“I think we have proven that traditional playout is expensive and there are cheaper ways to do it,” Vermeulen said. “Integrated playout is the future, and we were happy to learn that Grass Valley has the same vision we do. I have no doubt that in a few years, every server manufacturer will offer an integrated playout solution and every automation vendor will develop interfaces to these types of systems. I think the real challenge is for the vendors to show that they have experience in integrated playout technology so that their customers will feel comfortable with it. Future solutions will be software-centric, and integrated playout technologies will be part of an overall IT platform. There’s no doubt about it in my mind.”

During the past few years, PubliTronic has been gaining experience with the software and learning how best to support automated playout in the most reliable and cost-effective way. Now under the Grass Valley banner, the sky’s the limit.

Andreoli would not reveal how much money Grass Valley paid for PubliTronic, but he did say, “We think it’s a fair deal for both parties, and we’re happy because we see the potential in the same way that (Harold) does.”

And the feeling is apparently mutual: Vermeulen said he was very happy as well.

“The partnership with Grass Valley was triggered by our desire to penetrate new markets, including the U.S., where we see great opportunity,” Vermeulen said. “After talking to Grass Valley, we both realized that there was a lot of good chemistry between our two companies and virtually no overlap in terms of products. The more we talked, the better the idea sounded, and I soon realized that it was a perfect fit.”

However, Vermeulen said he surprised even himself when he finally agreed to be acquired.

“Yes, it was a surprise,” he said. “If you had asked me at the beginning of this year, ‘Will you be selling the company?’ I would have said, ‘No, the company is not for sale, not at all.’”