Ericsson is buying the Broadcast Services Division of Technicolor for about $25 million (€19 million).
The acquisition will allow Ericsson to expand its current broadcast operations in terms of channels managed and households reached. The company has been strong in Northern Europe, while Technicolor has led the market in much of the rest of the continent.
There’s an ongoing trend based on the notion that efficiencies can accrue to those who can manage both ends of the video process: contribution at one end and playout at the other.
Harmonic’s acquisition of Omneon in 2010  is an example of another company pursuing this strategy.
"As the TV industry is undergoing fundamental changes with the transition to multi-platform, on-demand television, teaming up with a trusted partner enables broadcasters to meet the increasing commercial and technological complexity and competition in the TV market," said Magnus Mandersson, executive vice president and head of business unit global services at Ericsson.
For Technicolor, the sale was a means of focusing its attention.
Frederic Rose, CEO of Technicolor, said, "This transaction is consistent with Technicolor's strategy to focus on media monetization solutions, new growth businesses and strengthening its balance sheet.”
Ericsson had claimed to be the top independent playout service provider in the Nordic countries. After the acquisition, Ericsson said it will be the leading independent playout service provider in all of Europe.
A relatively modest $25 million investment buys Ericsson a dominant position in the European broadcast market.