Ericsson is bolstering its media services business with the acquisition of TV production and technology firm Red Bee Media for an undisclosed sum.
The deal marks the latest step in Ericsson’s overall strategy to boost its video products and services, with Red Bee Media already managing back-end services for almost 90 per cent of VOD content in the UK for broadcasters including the BBC, ITV, Channel 4 and Channel 5.
The deal will see the addition of Red Bee’s 1,500-strong global workforce to Ericsson’s business, 1,240 of which are UK based. The acquisition will boost Ericsson’s UK business to circa 4,000 employees, with over a third working on the media services arm, making its UK base its “global media hub”.
In a statement the company said the TV and media industry is undergoing an “unprecedented transformation” driven by consumers' appetite for rich, interactive, anytime, anywhere entertainment.
“The confluence of communications, broadband and media technologies and the use of IP and mobile networks to generate and deliver such experiences is creating new opportunities in the ecosystem,” read the statement.
Citing its own study - Ericsson Mobility Report June 2013 - video is the “single biggest contributor” to traffic in mobile networks and this is expected to grow 60 per cent annually until the end of 2018.
Magnus Mandersson, Ericsson executive VP said the move marks a “step change” in its business, cementing its commitment to TV and broadcast services – a journey it began in 2007.
“We can create value for broadcasters by making digital content more accessible, enabling monetisation of TV content more efficiently.
“Video traffic shows very strong uptake in the mobile networks, and Ericsson can address the need of both broadcasters and telecom operators through our technology expertise and services capabilities.”
The deal follows the news of Ericsson’s acquisition of Microsoft’s IPTV business unit Media room in April.