Ericsson beefs up its media services business with the acquisition of Red Bee Media

Sweden’s Ericsson is doubling down on its digital media business after it announced that it has agreed to buy UK-headquartered Red Bee Media for an undisclosed sum.

The acquisition will beef up Ericsson’s broadcast services business by adding Red Bee’s 1,500 worldwide staff and its operations in the UK, France, Germany, Spain and Australia. Those additions will take Ericsson past 4,000 employees in the UK and, with one-third of its British workforce involved in media services, it says that the country will become its ‘global media hub’.

Ericsson’s core business is enabling services for operators and, in bulking up on creative content and media, it is aiming to help its customers deliver more compelling services and products, particularly around video. Citing its own report, Ericsson says that video is “is the single biggest contributor to traffic in mobile networks” and it is expected to grow by 60 percent per year until the end of 2018.

Founded in 2005, Red Bee provides a range of media-based services — or more precisely things like TV production, content marketing, multimedia content delivery — for clients such as ESPN, BBC, Channel 4 and Microsoft.

The deal reflects Ericsson’s growing focus on media services which complements its existing hardware and software business, so says Magnus Mandersson, who is Executive Vice President and Head of Business Unit Global Services at Ericsson:

Ericsson is making a step change to our business, cementing our commitment to TV and broadcast services and continuing a journey we started in 2007. We can create value for broadcasters by making digital content more accessible, enabling monetization 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 Red Bee deal follows Ericsson’s purchase of Microsoft’s IPTV business unit Media room in April. That transactions allowed the Redmond-based company to focus on its Xbox console, while giving Ericsson a market-leading 25 percent share of the IPTV and multi-screen solutions space.

Other high-profile Ericsson deals have included its exit from its Sony Ericsson mobile hardware joint venture, and its decision to carve up a joint venture with ST Micro after the duo failed to find a buyer for their loss-making chipset business.

Headline image via JONATHAN NACKSTRAND / Getty Images