Ericsson’s Broadcast and Media Services business, currently under “strategic review” by the vendor, has been renamed (back) to Red Bee Media in an apparent bid to strengthen the unit’s brand ahead of a possible sale.
In a statement, Ericsson said the Red Bee Media name and brand identity will apply to all of Ericsson’s broadcast and media services businesses worldwide.
The change means Red Bee Media will now operate as an independent business fully owned by Ericsson, with operations in Australia, France, Germany, the Netherlands, Spain, Sweden, the UK, the UAE and the US.
The Red Bee Media brand is widely recognised, and was formerly BBC Broadcast Limited before it was sold to Creative Broadcast Limited in 2005.
Shortly after, it was renamed to Red Bee Media, and the entity was acquired by Ericsson in 2014, to complement the Swedish firm’s broadcast and media portfolio.
Down the list of priorities
The company’s broadcast and media division was one of the areas championed by former CEO Hans Vestberg, who stepped down in July 2016.
Vestberg had outlined a strategy for the vendor to emerge as a market leader in TV and media technology, and the unit represented one of many efforts from the company to find new areas of growth amid a slowdown in its core networks operation.
However, with Ericsson’s financial struggles ongoing, the company’s new CEO Borje Ekholm is embarking on a restructuring plan in a bid to revive growth, with its broadcast and media division slipping down the priority list.
As outlined most recently at the company’s Capital Markets Day event in New York yesterday, Ekholm is putting the focus back on its core networks business to revive fortunes, stating that parts of its past strategy had a “risk profile we were not used to.”
Ekholm also admitted yesterday that Ericsson’s M&A strategy had resulted in “largely unsuccessful acquisitions.”
In yesterday’s update, Ekholm said the media business is still “under review”, as the company seeks to generate SEK10 billion in cost savings by mid-2018, which forms part of its wider turnaround efforts.
In his presentation, Ekholm did not mention the decision to rebrand the unit, but Steve Nylund, CEO of Red Bee Media, said in today’s statement that adopting the brand “will enable us to strengthen our position as an independent and agile media services organisation”.
Speaking to Mobile World Live, Paolo Pescatore, VP of multiplay and media at CCS Insight, said “it is apparent Ericsson is struggling to sell off this asset”.
“Many of its rivals are struggling in light of the challenging and competitive landscape. Therefore private equity could be the only realistic and viable option,” Pescatore added.