I had a long history with Harris Broadcast. My first summer job when I was 15 back in 1980 was a radio host in an eastern Canada radio station. I was doing my own technical operation with an Harris mono console with large rotary knobs and playing records with heavy-duty Harris turntable.
Harris has never really been the innovator in broadcast. In my mind it is more about stable and proven technology than in breakthrough. I even joked about it during the last couple of years when Harris Broadcast division was sold by the Harris corporation to the “The Gores Group” saying that the phrase that captures them the best would be “Harris, broadcast as it used to be”.
Anyway, Harris Broadcast did announced yesterday that they would spit the company in two parts:
–Imagine Communications is more or less the part of Harris Broadcast that provides solutions to TV studio operations, including management solutions and infrastructure products.
–GatesAir keeps the transmitter business as well as the radio gears. It is what may be the “historical” Harris as I remembered from the radio days.
At first glance, this may seem like an odd move. For sure the Harris brand is better known than these two other brands. Usually, a good well known established brand has more power than lesser known brands. So why do this move? Not knowing the behind the scenes reason of this I can speculate two possibilities:
-The Harris Broadcast name usage was limited in scope or in time from the spin-off from the Harris Corporation last year,
-The Harris name was more attached to older technologies then new breakthrough advances.
But beyond the name, what is the logic to break down Harris Broadcast in two? Typically a private investing firm like “The Gores Group” will invest in a company like Harris Broadcast when it sees a possibility to turn it around for more money then they bought it. The buy it at a bargain price (they paid only $225 millions a year ago, which is not a lot for such a significant operation) and they find way to squeeze more money out of it. The fact is, if they bought it for $100 million less than Miranda was sold to Belden (and Miranda had a smaller product base than Harris Broadcast) it is most certainly because the market did perceived it as weaker player then Miranda or Evertz.
Once you consider that, then own do you change the image and make it seem more valuable without investing massively in R&D? You analyze the best way to squeeze more short term efficiency and look at splitting it in parts than may be easier to sell than the whole. Doing so while also trying to renew the image to make it seem more competitive and more cutting edge.
Will this work? I don’t know. Value of organisation is often a question of perception so they might succeed. But if you look at the fundamentals, the existing product portfolio is as dated as it was yesterday and I haven’t seen any real breakthroughs coming out of it. And now they have the added chalenge in convincing their installed base that they will continue to have the same or better service while building their new identity. These are real chalenges in the current marketplace. I can’t help to think about the multiple rebranding that Grass Valley went through with ownership changes from Tektronix, Thompson and now Belden without ever being able to recapture the past glory of the brand and that doesn’t make me very optimistic for “Imagine Communications”.
After all, GatesAir may be in a better position in the transmitter and radio marketplace, even if its a more limited one.