Grass Valley Group Questions & Answers Vibrint Acquisition

The Acquisition

  1. What exactly is the Grass Valley Group acquiring?

      2. Grass Valley Group is acquiring Vibrint Technologies, its employees—including its world-class software engineering team—and its PC-based systems and software applications for hard-news editing. This is a key strategic acquisition that anticipates the needs of video-based news organizations as they begin their transition to digital.

  2. What are the terms of the acquisition?

      3. As the Grass Valley Group is a private company, terms of the transaction are not being disclosed.

  3. Why did the Grass Valley Group make this acquisition?

      4. Today's acquisition addresses one of the most critical activities related to making high-value content available via television as well as Web media: the ability to rapidly assemble and edit hard news stories for on-air and online packages. It also expands the Grass Valley Group's strategy to deliver a full spectrum of standards-based news production products to complement its Emmy® award-winning Profile® XP Media Platform.

  4. Does the Grass Valley Group intend to divest itself of any of its newly acquired assets?

      5. No.

  5. Will there be layoffs associated with this transaction?

      6. There are none anticipated.

  6. What will happen to Vibrint's employees?

      7. All Vibrint employees will be joining the Grass Valley Group and will remain headquartered in Massachusetts. In fact, the Vibrint and Grass Valley Group engineering staffs are already tightly integrated.

      This approach is consistent with the Grass Valley Group's strategy to enable talented product teams to remain within their communities and continue to make significant contributions to the company's growing cache of software, hardware, and Internet technologies.

  7. Will Peter Tarca be joining the Grass Valley Group?

      8. Yes. Peter will become the Vice President and General Manager of the Vibrint Product Line Division.

Vibrint Product-Related Issues

  1. Which Vibrint products will the Grass Valley Group support?

      2. Grass Valley Group Customer Services will support all Vibrint systems and applications.

  2. How reliable are Vibrint's systems and applications?

      3. Based on a number of direct customer interviews, we are very, very pleased with the reliability of Vibrint's systems and applications. In addition to reliability, Vibrint's customers have praised these solutions for their ease of use: by combining familiar tape-to-tape editing conventions with the benefits of nonlinear systems, most new customers are on the air within 24 hours of installation.

  3. What about Vibrint's server platform—will you continue to support it?

      4. Yes. The Vibrint VideoServer platform is the system upon which all Vibrint software applications are hosted. We will continue to support this platform. It is a great platform for supporting sophisticated applications such as nonlinear editing and complements the play-to-air strengths of the Profile.

  4. Will product pricing change?

      5. No, product pricing will remain unchanged for the present.

  5. What service offerings will the Grass Valley Group provide for Vibrint systems and applications?

      6. For all Vibrint systems and applications, our Grass Valley Group Services organization will offer technical phone support, and software updates for those customers that purchase service contracts.

  6. What about Vibrint products sold through resellers—how will you support them?

      7. We currently require all our channel partners to be certified in supporting our products. We expect to broaden that certification to include Vibrint systems and software.

  7. What about product installation and training?

      8. For the near-term, installation and training will be provided through Vibrint's existing support organization. Longer term, we will continue to ensure that staffing levels for installation and training services are commensurate with our base of users.

  8. Will you supply spare parts for Vibrint hardware solutions?

      9. Yes, replacement parts will continue to be available for all Vibrint systems.

Vibrint Market-Related Issues

  1. What market opportunity is the Grass Valley Group pursuing with this acquisition?

      2. The worldwide newsroom market is on the cusp of a wholesale transition to digital technologies. As they make this transition, news broadcasters hope to gain competitive advantages by removing existing technology barriers between the news scripting and video production processes. While some have introduced digital nonlinear technology for features-related production, they have not been able to make similar investments for the two-machine, cuts-only, hard news edits bays that represent the majority of news station edit bays. Conversion of these edit bays—estimated at just three percent worldwide—has been stalled not by a lack of desire, but more by the failure of nonlinear systems to meet the specialized price-performance requirements of hard news editing.

      In April 1999, Vibrint introduced the first cost-effective, open and standards-based digital news production solution targeted precisely for hard news production. We believe that today's acquisition addresses one of the most critical activities related to making high-value content available via television and Web media: the ability to rapidly assemble and edit hard news stories for on air and online packages. In so doing, it expands the Grass Valley Group's strategy to deliver a full spectrum of standards-based news production applications for its Emmy award-winning Profile XP Media Platform.

  2. What is Vibrint's share of its target markets?

      3. Vibrint has begun to make inroads in both large and small US markets, with customers in New York, Los Angeles, Boston, and several smaller-market cities.

  3. How do you expect Vibrint products to perform in the coming year?

      4. Initially, we expect the Vibrint applications to continue their penetration of the United States market. We expect to start making significant inroads into international markets at the year's end.

  4. Does Vibrint have any sales outside the United States?

      5. To date Vibrint products have only been sold in North America.

  5. Does Vibrint have any sales/support operations outside the United States?

      6. Vibrint's existing direct sales/support organization will join with the world-class Grass Valley Group direct sales and service organizations to sell and support the Vibrint products.

  6. Does Vibrint support the servers of any other manufacturers?

      7. Interoperability is a key objective for the Grass Valley Group and its Vibrint product line. For example, the digital media leader is developing an SDTI-CP (Serial Data Transport Interface-Content Package) with Sony MPEG recorders and IMX VTR, as well as with Sony's new Betacam SD.

      Because Vibrint's solutions for hard news editing are the first to be truly open and standards-based, the company has been able to easily integrate them with a number of solutions from other manufacturers. In addition to the Profile XP Media Platform, Vibrint supports integration with the Pinnacle MediaStream video server and the Avstar and ENPS newsroom computer systems. Vibrint is also collaborating with Sony to provide SDTI-CP (Serial Data Transport Interface-Content Package) connectivity between Sony's Betacam SX® products and Vibrint's NewsEdit™ system. The digital transfer capabilities of SDTI-CP allows broadcasters to capture in the Betacam SX format and then edit directly from tape-to-disk on Vibrint's NewsEdit without any generational loss.

      Similarly, the Profile line supports to high-speed Fibre Channel interfacing to the Avid Newscutter, the Vibrint NewsEdit system, and other leading nonlinear news editing manufacturers to be announced at NAB. By submitting a Fibre Channel streaming protocol for SMPTE standardization, we expect the Profile line to be able to interface with an ever-increasing number of nonlinear editors. Similar to NewsEdit, the Profile XP Media Platform at NAB will be demonstrating technology to interface via SDTI to leading tape formats.

      In summary, both Grass Valley and Vibrint have a demonstrated commitment to openness.

  7. What are the plans for 625/50 news production products?

      8. Version 2.0 of Vibrint's digital news production products includes support for 625/50. This version is expected to ship within 60 days after NAB.

The Strategy

  1. Why did the Grass Valley Group choose this particular time to acquire this particular company?

      2. The Grass Valley Group knows more about high-quality video than anybody else—especially as video goes digital. It is this company's publicly stated intention to provide the software, hardware, and new media technologies which broadcasters, journalists, and other content providers need to fully tap into the digital era. Given the imminent mass migration of newsroom operations to digital, there is no better time than the present for this acquisition.

  2. Doesn't this acquisition mark a return to the non-linear editing business—a business the Grass Valley Group exited only last August?

      3. This acquisition targets a specific and largely untapped market segment: news production solutions for hard news. This is a unique market opportunity and one in which the Grass Valley Group has yet to participate.

  3. This will be Grass Valley's fourth editing solution (Sabre, VideoDesktop, VIP, Avid). Why should we expect the company to remain dedicated to this effort?

      4. This acquisition is founded upon a shared market and technology vision for digital newsroom: a vision of integrated solutions for the entire news production process. The systems and applications of Vibrint and the core technologies of the Grass Valley Group will enable us to deliver on that vision.

  4. Is this acquisition a threat to the strategic alliance with Avid Technology? What about Avstar?

      5. Avstar LLC is a newsroom computing company launched by the Tektronix Video and Networking Division and Avid approximately 15 months ago. The Grass Valley Group, with its 100 percent focus on broadcast and professional video markets, is continuing to support the strategic alliance. In fact, Avstar is the first company to integrate our ContentShare™ software platform for distributed asset management into its Media Browse newsroom solution. Both Avid and the Grass Valley Group believe that it is in the best interests of the broadcast industry to not only maintain this alliance, but to broaden it—that is, a broader distribution model for Avid, and the ability for the Grass Valley Group to provide more editing solution options for news-based clients.

      Avstar is 50 percent owned by the Grass Valley Group and Avid Technology. Further questions about Avstar should be directed to Matt Danilowicz, president and CEO of Avstar.

Media Without Bounds

  1. What is Media Without Bounds?

      2. As the on-air and online worlds continue their convergence, content creators and distributors need to be able to access, create, manipulate, query, and distribute digital assets across any media, at anytime, and from anywhere. The Grass Valley Group's Media Without Bounds™ initiative will help content creators and distributors leverage the burgeoning opportunities made possible by the exploding bandwidth of an increasingly networked world.

  2. What does the Media Without Bounds initiative include?

      3. The Media Without Bounds initiative is based on a belief that content creators and distributors need the freedom to access, create and distribute content whether they are in the same building or across the world, without being impeded by format, resolution, protocol, or geography.

      Consequently, the initiative is focused around four areas that encompass all facets of content creation and distribution: Media Software, which enables widespread media access and centralized device monitoring and control; Media Connectivity, which bridges the worlds of traditional video routing and standard computer networks; Media Production, whose solutions are designed for a future in which video professionals must make high-value content available for multiple distribution pipelines quickly and easily; and Media Platforms which provide video storage, production, and manipulation while supporting multiple formats and resolutions and the open architectures necessary to meet both the current and future needs of content creators and distributors

  3. What is Media Software and what does Grass Valley Group have to offer in this area?

      4. Industry consolidation forcing broadcast and video production companies to do more with the same facilities and budgets, As a result, there is a massive integration of hardware and software underway to capitalize on organizational talent while wringing the most efficiency out of existing facilities. Media Software strengthens this integration and efficiency by breaking down barriers within the content-creation and distribution processes as well as streamlining organizational workflow.

      The Grass Valley Group is aggressively strengthening its repetoire of video software. To date, we have released ContentShare Explorer 1.0, a browser-like application that makes accessing and managing storehouses of digital media assets as easy as using the World Wide Web. Leveraging open, Internet-based technologies, ContentShare Explorer 1.0 is extensible to a wide range of storage devices, enabling users to find assets no matter where they may be housed. The application ships with the Profile XP Media Platform.

      We have also announced the availability of NetCentral™, an SNMP-based application that addresses the total cost of facilities ownership by centralizing the monitoring of Profile XP Media Platform devices and related systems. We intend to extend NetCentral support to our next-generation of routers, modulars, and Media Creation solutions.

      The Grass Valley Group has also announced the WebAble™ technology for streamlining and simplifying the processes used to re-purpose content for Webcasting and Web distribution. WebAble technology combines the strengths of the Profile XP Media Platform, the ContentShare software platform for digital media asset management, and any Web server. This technology will provide browse-quality access to any high-quality video on a Profile XP Media Platform, newsroom scripts, graphics, and any information from ContentShare-compliant applications. WebAble technology will allow Web publishers to access high-quality video the minute the material is recorded, bypassing today's manual processes that make breaking video-based news old news before a Web site is even published.

  4. Why is your Media Without Bounds initiative better than anybody else's approach?

      5. By providing content creators and distributors with the greatest elasticity possible, the Media Without Bounds initiative provide content creators an unprecedented array of distribution choices, from traditional broadcasting techniques to those utilizing hub, central-casting, and push-pull approaches. They'll be in the best position to take advantage of whatever new opportunities emerge as the Internet and Internet-related technologies continue to play a greater role in distributing high-quality video content.

Grass Valley Group Mission & Markets

  1. What is the charter of the Grass Valley Group?

      2. The Grass Valley Group knows more about high-quality video than anybody else—especially as video goes digital. Video on demand. Digital cinema. Data-enhanced broadcasting. Internet. It's a world of Digicasting™—of Media Without Bounds™. Whether online or on the air, Grass Valley Group has the hardware, software, and new media technologies necessary to get content wherever it needs to go.

      To help broadcasters and video professionals exploit as many new digital media opportunities as possible, the Grass Valley Group has introduced next-generation products across all its lines that are setting set new standards for flexibility, integration, and cost effectiveness. It has also unveiled its Media Without Bounds initiative to enable broadcasters and video professionals to distribute their work through the widest array of digital pipelines without limitations imposed by format, resolution, protocol, or geography.

  2. How competitive are Grass Valley Group products in their respective markets? What is the company's overall market share?

      3. Approximately $1 billion of Grass Valley Group equipment is installed worldwide today, with nearly 80 percent of television signals worldwide passing through it. According to both industry and internal analyses, the Profile line of media platforms holds the number-one position in its market. The Grass Valley™ modular, switcher, and router products hold the number-two position in their respective markets. It is the company's intention to hold the number one or two positions across all product lines.

  3. What specific research and development efforts have been undertaken to ensure the future competitiveness of these products?

      4. Over the last two years, $60 million has been invested in research and development. The fruits of that effort have been borne out in the introduction of next-generation digital media solutions across all Grass Valley Group product lines—solutions that underscore the company's leadership in understanding both the current and future needs of its customers. The company, with its lean operating structure and solid financial backing, is in an excellent position to build upon this $60 million foundation with additional R&D investments in software solutions for the Internet market, as well as related growth markets such as Digital Cinema, Xtreme Retailing, etc.

  4. How does the Grass Valley Group intend to stay competitive in those markets?

      5. New products and customer intimacy.

      The company continues to invest in Profile and Grass Valley research and development, and to accelerate the development and delivery of new, powerful, and innovative products. As important, the company continues to strive to provide the best-in-industry support of our customers, and make their requirements our number-one priority in the products and services we provide.

      Overall, our hope for the industry is as smooth a transition to digital as possible. We believe that the technological keys to effecting such a transition are increased connectivity or networking; more applications and more format choices; greater bandwidth and the ability to multi-purpose content; increased automation; and, rapid access to content on a global basis. These are qualities that customers will see in our products going forward.

      As the on-air and online worlds continue their convergence, the Grass Valley Group has announced Media Without Bounds, a broad-based effort to enable broadcasters and video professionals to access, create, manipulate, query, and distribute digital assets across any media, at anytime, and from anywhere. The company has rolled out hardware and software solutions to support this initiative, and also unveiled the first of its new Internet-related capabilities.

The Future

  1. Does Grass Valley Group intend to make other acquisitions?

      2. The Grass Valley Group will always look for ways to strengthen the business. The company's short-term plan is to complete the introduction of new solutions across all its product lines by June of 2000. Management of the company currently has no immediate, further acquisition plans. However, the Grass Valley Group's management always is looking for ways to strengthen the company. Management will remain watchful for new technologies and opportunities that will help the Grass Valley Group better serve current and pursue emerging markets.

For the latest Grass Valley Group product information, see www.grassvalleygroup.com.





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