For decades, the buzz around the Harris booth at the National
Association of Broadcasters (NAB) conference concerned the latest transmission
technology for TV and radio. But this year, the company will unveil the fruits
of its $340 million cash acquisition of Encoda, an enterprise-level traffic,
billing and automation system.
Harris, a Quincy, Ill.-based supplier of transmission and automation
hardware and software, deals with customers that integrate traffic, automation
and digital-asset management systems from a variety of vendors. Now they will
be able to enjoy one-stop shopping. This leaner approach provides operational
stability and fewer headaches for stations, the company says.
“When you look at enterprise-class systems versus point-to-point
systems, the return on investment is more compelling,” says Jeremy Wensinger,
president/GM of Harris' Broadcast Communications division. He notes that such
systems eliminate the need for multiple service contracts: “How many
software-maintenance and hardware-maintenance agreements do you really want to
manage?”
NAB Offerings
For NAB, Harris is building a “Harris Resource Suite” (HRS),
including a Broadcast Presentation Manager (BPM) and Media Mover (MM), to
replace the current Encoda ADC system. “In the future, the log will no longer
be the foundation for what a broadcaster delivers,” Wensinger says.
“Instead, the digital asset will be.”
This next-generation automation system will tie more information into
that asset, says John Sorensen, head of Harris' Software Systems division and
former CEO of Encoda Systems. A commercial clip, for example, will have
business information and rules attached to it, not just an ID number and
traffic information. Integrating automation and traffic in the control room,
Sorensen points out, allows any change to be reflected in the traffic systems
in real time.
Flexibility benefits
HRS will also have a graphical user interface (GUI), minimizing training
time.
“Customers will be able to configure the GUI to meet their specific
needs,” Sorensen says. The BPM will provide rules-based scheduling of
branding, audio voice-overs and other content.
“It also allows for the ability to monitor channels and playout
anywhere within the facility or across WANs [wide area networks],” Sorensen
adds.
The acquisition of Encoda allows Wensinger to put his stamp on the
broadcast communications division. He moved into the new role after
successfully heading Harris' government division.
Harris had done well selling DTV transmitters, but as the market cooled
(only 90 stations are not yet broadcasting digital signals, and potential
long-term growth is about 5% per year), the division needed to expand.
So far, the moves are paying off. The broadcast division recently
reported $98.9 million in revenues for fiscal second quarter 2005, an increase
of 49% over the year-ago period. Encoda contributed $21 million of that
revenue.
Prior to the 2004 Encoda acquisition, Harris' automation group worked
on systems for facilities that needed fewer than 15 channels of automation. The
addition of Encoda's automation line expands that capability to more than 15
channels. Encoda's traffic and billing software rounds out Harris'
technology portfolio, allowing it to be a full-service (traffic, billing,
automation) provider.
The new automation system is handled by a new division: the Software
Systems Business Unit, which is headed by Sorensen. “Buying Encoda was almost
like a reverse acquisition; our automation business was folded into their
unit,” says Wensinger. “All our software applications will be built by
them, and we think it's a powerful way to go to market.”
Perfect timing
Sorensen says the timing of the acquisition was perfect from Encoda's
standpoint. Encoda, owned by venture capitalists, was looking for a buyer.
Harris was looking for a buy. More important, both companies were looking for a
change. “If you look at where the digital environment leads our customers,
it's to a complete end-to-end digital-content delivery system,” says
Wensinger. “We have that, thanks to Encoda.”
The move also gave Encoda some much needed resources. Harris has more
than 5,000 software engineers in Melbourne, Fla. Encoda had about 300. Sorensen
believes a surge in the talent pool will help Encoda stave off competitors on
the traffic side. Developed more than two decades ago, Encoda's system was
considered solid, but rivals VCI, OSI and WideOrbit provide more features and
flexibility.
OSI President Ed Adams agrees that Harris' moves will beef up the
traffic side of its business. But OSI is “working toward that sort of
integration of metadata [delivered via satellite] with companies like
Pathfire,” he says.
“The challenge Harris faces is, the days of locking out competitors,
something Encoda's proprietary system did, are over. Any software provider
looking to do something exclusive,” he says, “is setting themselves up for
failure.”
