HITS, Digital Media Centers Merge

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For years, they shared the same headquarters. Now they'll share the same mission.

AT&T Broadband has decided to merge its Headend in the Sky video-transmission subsidiary into its AT&T Broadband Media Centers video-production and interactive-services operation. The idea is to create an all-in-one content-origination, production and transmission service not only for video customers, but also for emerging new-media markets.

Founded in 1994, HITS delivers digital Moving Picture Expert Group (MPEG) television programming feeds to most major U.S. cable operators, via 14 satellite transponders.

The Digital Media Centers subsidiary provides digital production and distribution services, and has just recently delved into such new-media applications as interactive TV and video streaming.

Marrying the two units gives AT&T Broadband a content-production and delivery shop for broadcast and Internet services under one administration, according to DMC senior vice president of video services Gary Traver, who was tapped to run the combined entity.

"The mission of our business is to help people create, manage and distribute content," he said. "Our mission is to take advantage of the new-media marketplace, and to provide a wide range of services that meet all of the new emerging forms of distribution."

The two operations are both headquartered in AT&T Broadband's Digital Media Center in Englewood, Colo. But up to now, they have operated separately, even though they often shared customers.

That factor was one catalyst for the merger, Traver said.

"There have been many applications that we have worked on with the HITS people where customers are asking for a full solution," Traver said. "They really want to deal with one entity and they want to focus on everything, from the creation point through the end distribution."

While the two units separately provided all of these necessary services, "what we really didn't do was we didn't optimize that," Traver said. "So we've worked to put the businesses together, and we are rolling HITS into the Digital Media Center as one big, aggregated business."

Another catalyst for this move was the growth in new media, including high-speed Internet and ITV applications that require more synergy between how content is created and distributed. The combined ADMC will be better able to hunt for business in other sectors, including multimedia corporate training, communications and marketing.

"There is a movement toward all types of new media," Traver said. "There is a whole list of digital-media applications that are necessary for content providers to offer, as well as for the points of distribution."

Unlike other mergers, there won't be any layoffs resulting from eliminated duplicative positions, Traver said. Both units had expansion plans and now won't need to add as many new sales, administrative and technical positions to grow the business, he added.

But another merger looming at the end of this year may have an effect on the combined Digital Media Centers — that of AT&T Broadband and Comcast Corp. Traver said the DMC intends to move forward with its plans, and added that this combination should meet with Comcast executives' favor.

"Comcast, we know, is pretty content-savvy, and we have a great deal of respect for the folks in that organization," Traver said. "We think that they understand the marketplace, and they will be able to help us make the right decisions to help us move the business forward."

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