As Sony completes its acquisition of Nevion, head of media solutions in Europe Hiroshi Kajita and head of marketing for professional solutions Kento Sayama speak to IBC365 about why the Japanese giant has bought the Norwegian solutions company.
Sony’s acquisition of Nevion will allow the Japanese vendor to better provide an “end-to-end solution” for its broadcast and media customers at a time when the Covid-19 pandemic has accelerated the industry’s push to IP.
Sony Imaging Products & Solutions confirmed the acquisition – made for an undisclosed fee - at the end of September. The deal came more than a year after Sony first invested in Norway-based Nevion, announcing a “partnership” in June 2019.
At the time, Sony did not disclose how big a stake in Nevion it had taken on, but Norwegian financial newspaper Finansavisen reported at the time that Sony acquired 45% of the virtualized media production solutions company.
So why did the Japanese giant opt to make Nevion a subsidiary, rather than continue with the partnership that it claims has been “very successful”.
“What we find in general is that we’re complementing each other,” explains Kento Sayama, general manager, Media Solutions Marketing Dept – Sony Professional Solutions. “We specialise in studios and OB trucks, or the production gear and equipment and systems. And we have an HD or 4K, HD 2110 based IP systems running already.
“Nevion specialises in network management, and facility-to-facility management. So together, we can actually support a broadcast project, starting from the facility out to one IP-to-IP connection, and then build what goes into an individual facility.”
This, he adds, will allow Sony to start “providing synergy” and try to provide something that will serve the industry at a time when the pandemic is “accelerating the need for remote production and resource sharing”.
When a buyer talks about synergies, it often means job cuts and office closures, but Sony denies this is the case. In fact, Sayama explains, Sony plans to not only maintain the Nevion brand, but also to invest in the company further.
“We see this to be a growing business, one where we need to invest,” he explains. “We need to add people we need to add skills, because that’s where the stage is in terms of IP remote production industry.”
When speaking to IBC365, Sayama is joined by his colleague Hiroshi Kajita who heads up Sony’s Media Solutions division in Europe. He has sat on the board at Nevion ever since Sony invested in the company.
- Read more: Interview: Hiroshi Kawano, Sony
Acquiring Nevion means Sony can have a “wider discussion” with its global customer base, he explains. “It means we’re not limited to one piece of the solution but can offer the entire operational transition for our customers.”
Sony’s broadcast and media customers have, he adds, faced a real upheaval driven by the coronavirus pandemic. “Our customers have had to quickly adapt to the situation, where now people are thinking of the changing of their workflows.”
Sony has seen an increasing demand recently in broadcasting and other business areas for remote production technology and remote integration (REMI), he adds, as they allow resources such as equipment, facilities and even staff to be shared across locations in real time, resulting in greater efficiency and effectiveness.
“Back in March, there were many small projects to have small cameras streaming for their news operations or production. But now customers are seriously starting to look at how they can adopt connected cameras to establish working from home in their broadcast operation.”
The pandemic, then, hasn’t really changed Sony’s position on remote production, but it has accelerated its plans in line with customer demand. The acquisition of Nevion may have happened anyway, but the coronavirus has reinforced Sony’s thought process.
Sony and Nevion had already been carrying out joint conversations with customers, but the Nevion unit will now sit under Sony’s Kajita explained that Sony will now contact Nevion’s customers - which includes the likes of the BBC, TV 2 (Norway), France Télévision, Telenor, Plazamedia, RTRN, ARD ZDF, Pac-12 Networks and BT – over the coming weeks to discuss what the merger means for them.
Scalability and reach
For Nevion, the acquisition is “excellent news” for its customer base as it means the company can now offer a “one-stop shop” of integrated, flexible, scalable and future-proof solutions, with the backing and resources of a much larger organisation.
Speaking to IBC365, Nevion VP of marketing Oliver Suard explains: “We have been working with Sony as part of a strategic partnership since June 2019 and have developed a good relationship at multiple levels. In particular, we have put together a joint value proposition centred around four main solutions: IP in the facilities, remote production, OB-vans and distributed production – in which our products and services play a key role.”
Nevion’s equity ownership prior to the takeover was distributed as 45% to Sony, 46.5% to Herkules Capital, and 8.5% to Selvaag Invest.
The Nevion leadership, headed up by Geir Bryn-Jensen, is expected to stay in place. On the announcement of the original tie-up, Bryn-Jensen explained it would allow Nevion “to offer a lot more to our customers, both existing and potential, than we have been able to until now. It will also give us a much greater scalability and reach.”
- Read more: Interview: Geir Bryn-Jensen, Nevion
The relationship clearly worked. Suard explains: “In Sony, we have found a likeminded company, which enables us to augment our offering with very complementary products and ITS market reach for our solutions and products. This is very important at a time when many of our customers are looking for turn-key transformative solutions based on IP and virtualisation.”
When Sony initially announced its investment in Nevion last year, analysts Devoncroft chalked it up to a two-word and three-word answer: “Remote production” and “software-defined networking”.
“It seems self-evident that the number of remote productions will only increase from here, but centralising production hardware is just the beginning,” wrote Devoncroft’s Joe Zaller, prior to any knowledge of the coming pandemic. “Many broadcasters plan to take remote production principles much farther, believing they can deploy completely decentralised production workflows where equipment and personnel in multiple locations work together on a live event.”
Investing in Nevion offers Sony “the opportunity to start changing its overall go-to-market strategy in the live production sector.
“While Sony’s participation in live events typically ends when content leaves a truck or control room, that’s where Nevion starts. The company’s Virtuoso platform is a software-defined media processing node that provides a wide-variety of tools to enable broadcasters to transport signals between remote locations and a central facility securely and with low latency.”
From a business point of view, “Nevion was an attractive target because of its technology portfolio (by extension technology investments), its alignment with several top industry trends, and its adjacency to the acquirer’s product set,” he adds.
“To put the main takeaway in plain terms: even within lower growth / choppy market segments there is an opportunity for suppliers to build shareholder value.”
So, what does Zaller think this adds for Sony? “It gives Sony SDN across product offering and a proven IP-based solution,” he tells IBC365. “Sony has its own IP protocol (NMI) that is used in many systems, but ST-2110 is more widely deployed and Nevion provides them the tech stack.
“Nevion also sells to a different part of the market than just live production, news, sports, etc where Sony traditionally sells (Nevion also sells to these users as well). More broadly, if you believe IP is the future, owning all of Nevion gives them technology and team to “IP-ify” everything across Sony portfolio – including things that are not broadcast specific.”
When asked if Nevion is the final piece of the puzzle for the Japanese giant’s production business Sayama jokes that if Sony was at the end of that journey, then its whole business would be “done”.
“It is a never-ending journey. We started from analogue tape and we had the move to digital and HD. We have had networks, the move from linear media to non-linear media, so lots of change,” he adds.
“The media and broadcast industry will continue to develop and request new things. So, we’re not anywhere close to the end of the journey, we’re still right in the middle of it. Things in the future will be virtualisation, cloud and 5G, which we can already see on the horizon.”
What about more acquisitions? Will Sony dip its toe into the buyers’ market again soon?
They refuse to rule it out. “That really depends on the case, I think it’s very difficult to say yes or no, but we will always keep that as an option.”
For now, however, the focus is on “business continuity” and the growing opportunity and interest in remote production.
Kajita says: “Stay tuned. Nevion has a very unique and interesting way of approaching business, and they have very unique technologies. We’re looking forward to getting that synergy out into the market and have a new type of conversation with our customers.
“This is a growing area. This will bring great benefits to our customers. We can have more discussions, with them at a deeper level, and this will provide value to our broadcast partners.”