In a not so surprising move, Quantel did announced the acquisition of Snell today. In a news release, the company is of course very upbeat about it qualifying it of a “new force in media technology”.
Well, I am not sure I’ll be that quick to say that. Is combining two companies that have a long history a “new force”?
Some say that this “was long-rumored in the industry” as it is the case for this blog since they had common owners. In any case, I don’t expect it was a shock that sent their competitors in crisis.
I always though that Quantel was an interesting company. It was a pioneer and early innovator in digital television. It’s heyday was probably during the 80 when it created the “Paintbox” and a series of advanced digital video effects processors. Quantel was always targeting the very high end of the market.
The problem for them is twofold:
-The high end of the market is not as high as it was. That segment has tighter budget and there is less organisation there.
-The lower end tools that sell for a fraction of the cost have became more powerful and more sophisticated and is grabbing an ever expanding slice of the market.
In that situation, Quantel have gone through numerous wave of attrition and cost-cutting. I have visited their headquarter in Newbury (in the Thames Valley, about an hour west of London Heathrow airport). The first time was in 1987 and business was good. At the time, they had manufacturing capabilities on site as their product did rely on purposed-built hardware. It was a dynamic place and business was good.
I did visit Quantel again in late 2010. It was a different experience. Much of the place was empty. No longer did they manufactured there. By then, it was mostly a software organization. It was a much smaller operation and you could see that the good times were a distant memory.
At this point, they pretty finished their transition to software running on Windows workstations. Their product still have a nice set of advanced features, you can still see the innovative company but their UI (User Interface) is really dated. It’s awkward except for maybe those who operated the “Paintbox” in the 80s.
The other part of the equation is off course Snell. Used to be called “Snell & Wilcox” until it merged with Pro-Bel in 2009. Both UK companies, Pro-Bel was based in Reading (not very far from Quantel) and Snell was in Portsmouth area. Both organisations and the merged Snell are different beast than Quantel. They have a tradition more rooted in hardware. Switchers, converters, distribution amplifiers are what they do.
They have faced tough competition over the years especially from North American vendors such as Evertz and Miranda. I did generally perceived their product as good quality products but not the most inovative.
From memory, I think the only product I bought from them was from their “Alchemist” product line as it was the best quality tool for frame rate conversion.
The New Quantel
We don’t know a lot still about the “New Quantel” that included Snell. We know that they will be physically located in Newbury, the historical Quantel location. We know that they intend to keep both brands, Quantel and Snell.
Will they keep both brand on the longer term? Who knows, probably not even them. On the long term, brands may be the most valuable asset of that organization.
The professional television industry is changing rapidly and there will be little space in a few years for the hardware technology of Snell. Quantel is already pretty much a software company which is good but their software offering is dated from an architectural and user point of view.
In the high end of the customer spectrum, there is still a need for ultra-performant, high-quality product that they offer. The question is: Is that market large enough to sustain that organisation and its competitor?
The mere fact that Quantel still exist is a testimony of the fact that they can remain innovative and that they can make the hard decisions to reduce the company size in time to survive.
There are large customers with a lot of ressources out there. For instance, Qatar-based Al Jazeera have very significant ressources. When they want to operate a network, they require an organisation that can provide a high-end highly efficient solution that is deliver as a turnkey. Money is not so much the issue as the performance of the system. One of the few remaining provider of such solution today is Avid but they have been struggling with the fact that the high end alone can’t sustain their organisation and that they have been losing the professional market to player such as Adobe, Apple, Autodesk and Sony.
Will the new Quantel dynamic enough and big enough to modernize their offering, redefine themselves and grab that market? Will Avid be able to find their way and keep being better than Quantel at it?
These are likely the answer to these question that will define how successful the “New Quantel” will be.