Harris Gone – Gates Back: Survey Results!

18 Mar

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In December 2012 Harris pulled the plug on it’s Broadcast Division which was sold to the Gores Group (Harris Sells Broadcast Division to Industry Outsider). Speculation then was that the Harris name would disappear. Now that has come about. SCRI has done prior polls on the name change. Read all about it here.

Harris just announced that the company will be splitting into two separate companies: the Harris transmitter business is now GatesAir, while the rest of the company’s product line-up are part of Imagine Communications.  Gates of course is the original name of the company back in the early days., nearly 100 years ago..

The Harris brand, known back in the early 1980’s as the market leader in broadcast antennas, and then over the years broadened its product base with mergers and acquisitions with niche brand leaders like Leitch,  went onto become one of the major players in the broadcast equipment market space.   The company seemed to lag behind in the past decade in terms of keeping pace with the rapidly evolving technology and end-user vertical markets and in May 2012, current management announced that the company was putting the Broadcast Communications Division up for sale.

SCRI’s survey back in December (Harris BCD Poll Results & Comments and  Update: Harris BCD Post Acquisition by Gores Group) showed that 58% of broadcast execs polled expected that the sale and rebranding would not impact sales negatively and that broadcasters will continue to buy Harris products. Most of these stated that all will be well for Harris Broadcast so long as they maintain their product lines and legacy brands and do not resort to cost cutting, product streamlining and staff layoffs. Of note, though, almost one in five (19.5%) believe that Harris sales will be negatively impacted. The remainder either responded with “maybe (15.9% or don’t know (6.1%).

Both new companies will have separate stands at NAB 2014. Just how the new branding will impact the market has yet to be determined. Stay tuned…

Comments from SCRI’s survey included:

Jimenez Carlos • Director of Engineering, Univision Network: I would keep an eye on the product managers and whether or not they stick around. Just send an email every now and then just to see if it comes back undeliverable. I had one already.

 Jon Frank • Maintenance Engineer at WGBH: I think that particularly with regard to transmitters, they will. Harris makes some excellent products, particularly solid state transmitters. That being said, I think that everyone will think twice, and look at competitor’s products very seriously.My guess is that at some point the transmitter division might get spun off by Gores.

Jimenez Carlos • I agree with the transmitters but Miranda and Evertz will take advantage of the situation and release a plethorah of new products that Harris wont be able to keep up with while in a transition state.

Allan Johnson • Engineer at Al’s First Call Communications: Maybe the new company will put Gates on the name of some new product like Harris did with the Gates Five AM transmitter. Or maybe some people will want the Harris logo while it is still available for 3 years. Has anyone collected RCA or Collins nameplates?

Fintan Mc Kiernan • CEO at Ideal Systems (Singapore) Pte Ltd: It’s all about support, it’s easy to buy toady, what happens when you have issues or need upgrades tomorrow? In Asia, there’s lots of choice and lots of competition, support is key.

Thomas Brunet • Advanced Electrical Engineering: I voted maybe. Harris design(s) represent industry benchmark quality of course. From what I’ve gleaned off the web, the hardware/software will be supported past the 3 year time frame. Licensed Full Power transmitters, ballpark SLA, replacement parts and tech support should be 15-20 years. Especially regarding the final output device. i.e. IOT or semiconductor tech which is typically out-sourced by EEV or other manufacturer.

Frank McCoy o Chief Engineer Salem Communications: My sense is that the only short term revenue opportunity is in parts and support. Throughout its history, Gates/Harris has had people answering the phone 24/7 and offering expert diagnostic help, all of it gratis. This free service was intended to move parts and encourage brand loyalty, selling future big-ticket transmitters.

I see this free support ending and users being offered a support agreement or per incident deal. Such an approach is much more consistent with the remainder of the tech world. Indeed most broadcast automation systems sell support as a separate item.

Karl Lahm, Engineering Director at Univision Television Group: Over the years, Harris has shed most of its divisions that have primarily commercial market customers, so the sale of BCD is no surprise. When I worked for BCD in Quincy back in the mid-70s, we would not have been surprised if it was sold. Even then, military and NASA contracts contributed to most of the parent company’s profits. So it is no surprise that Harris wants to be a pure-play government contractor. As for declining revenue, few TV broadcasters are buying transmitters due to the uncertainty caused by the National Broadband Plan and the Spectrum Auction. When that situation settles, there will be a substantial short-term demand for TV transmitters. Whether BCD has competitive product then remains to be seen.

Dwight Lebowski, Broadcast Engineer at Fox Networks Group: For those of us who started with two inch tape , film and equipment with a bnc connectors on it that worked out of the box. A lot has changed when you can buy a HD device for one thousand dollars that records HD 1080I I believe the days of the big hi prices equipment manufactures are over. Now we take equipment out of the box and try to make it work and maybe it will do what it is supposed to do if we are lucky. Nothing like loading the firmware to make a DA work.

Dave Obergoenne, President at ObieOne Engineering Inc.: Earlier this year, we bought a new Harris HPX40 xmtr. It’s a WONDERFUL transmitter! Harris is building the best products ever. As has been said here, I think they should re-name the company “Gates Radio and TV Company”. I think Parker Gates would be happy about that.

Tom Weems CPBE, TV Systems-Services Sales/Product Marketing/Engineering Manager: There are legacy brand names/technologies that Harris BCD has acquired over the years that have some broadcasters’ past experiences with- GE transmitters, Louth automation, Videotek terminal/monitoring gear, ASC servers, etc. in the television world come to mind not to exclude any others in the radio/audio world… These technologies/brands acquired by Harris BCD over the years have suffered and (perhaps?) grown or been lost in the Harris conglomerations… We’ll have to wait and see IF the new owners have the wisdom to keep/maintain legacy technologies/brands with continued/perhaps better support with investment into engineering development for future growth in the broadcast world… or busily count/manage the beans… It WILL be interesting to watch!

Bruce Ross, Director, Professional Services at Verizon Digital Media Services: Not unexpected. Since Tim Thornstensen’s departure all bets were off. Broadcast is a big fish in a small pond. Market’s oversaturated. Similar fate awaits Miranda, Evertz, Harmonic, etc. Like GVG, broadcasters will continue to buy the leading products but over time the weaker ones will be culled and discontinued.

 Larry Nadler, Owner-VP Engineering at Teklink Computer & Video Systems: I am not sure about this, but I buy and recommend equipment from them when it’s still says Leitch or Videotek, so I think they need to hold on to these!

Brian Walker, Market Development at Sennheiser Electronic Corporation: Don’t be too puzzled. It may be re-branded from “Harris” to “Harris Broadcast”. I’m not too concerned about the nameplate. What is important is product quality, value and support. As long as those three things remain at the core of the company’s values, all will be good.

 Harry Glass, CEO at OmniVue, Inc.: The change of ownership will not make a difference in future purchases. The change of management and services will, which I do not foresee in the near future.

Tom Driggers, Independent Sales Rep at RF Specialties: Maybe they can rebrand as “Gates”.

John Willkie, founder, EtherGuide Systems, LLC: Why would three years change things? Why would a name change matter? Are you talking new gear or replacement parts? I probably shouldn’t weigh in on this, as a co-manager, but this question is badly worded. Of course broadcasters will buy equipment from Harris in the future. Will that gear be sold at the same price points as before? Will sales increase or decrease as a result of the incipient sale?

I realized the other day that Harris never claimed much intellectual property (although they acquired some which they squandered) rights. They sold for $225 MM or less. Motorola Mobility’s set top box, etc unit claimed much intellectual property, and they are selling for — it appears — more than $2BB. The set-top box business isn’t exactly on an upswirl.

Alex MacGregor, Broadcast Engineer at Turner Broadcasting: Yes, they are the same products that they have buying all along.

Ryan Salazar, Broadcast/Post Production Engineer and IT Director. Columnist for Creative COW & Broadcast Engineering Magazine: I think it will affect sales pretty quickly. I also feel that changing the name is a REALLY bad idea. Harris is iconic…..legendary in our industry. It’s like killing off a celebrity. Bad idea!

 Wishes to Remain Anonymous My short answer is “maybe.” My longer answer is “I doubt it.” Let me explain…I began my career in the video industry as an equipment user in the late 1960?s. That was long before big business (and the VC’s) discovered the video industry. It was a much friendlier, collegial environment then. I moved over to the manufacturer side of the business in 1978. RCA and Ampex were the big dogs, and smaller, specialist companies like GVG were starting to make their mark by excelling in product niches. Tektronix bought GVG in 1974, and the Group did well, because Tek left it alone. Sometime during the 1980?s, big business began to take over the video industry. It started with the 3 major broadcast networks (see Ken Auletta’s “Three Blind Mice.” Along the way, Ampex and RCA Broadcast went belly-up, and Sony and Panasonic moved in to fill the void – especially in VTR’s and cameras.

A number of the small, specialist companies like GVG tried to make it to the big leagues by becoming “full line” suppliers. That didn’t pan out.

Harris did well as Gates Radio, a full line supplier of equipment to the radio broadcast industry. When RCA went away, Harris managed to take over as the leader in TV transmitters. But IMO, Harris never managed to put together a viable product or market strategy to become a “full line” TV equipment supplier. They messed around trying to build cameras, which was a disaster. They bought Leitch for $450M, and they spent another couple of hundred mil acquiring Louth and Encoda.

The deal struck by the Gore Group is a fire sale if I’ve ever seen one. The “real” purchase price is less than 50% of Harris’ revenues. Harris Broadcast is a company in decline, and regardless of what the press releases say, I predict that GG has a strategy to recoup their investment as quickly as they can, take the money, and run.

If I were still a user and still buying TV equipment, I wouldn’t even bother looking at Harris products.

Rajendra Singh Chauhan • Head, Broadcasting Operations & Engineering Noida Area, India: Brand somehow plays an important role, when Leitch became Harris, I am sure the situation would have been concerning, yet for a seasoned Professional who knows what he wants from a pedigreed company, would opt for Harris even if the name changes but with caution and deliberations.One could face internal concern while doing so.

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