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Why SIS got out of the OB business

When SIS bought BBC Outside Broadcast five years ago it was in the belief that there was still a place in the market for a company that set the industry benchmark for quality, delivering very high-profile services across a range of genres.

We knew that a consequence of buying a business previously owned by the BBC would also mean making a commitment to maintaining high quality employment practices, understood that some changes would be required in order to ensure that these were modernised and brought more closely in line with those of businesses operating in a purely commercial environment, and believed that this could be achieved while maintaining the emphasis on quality, breadth of expertise and resilience.

However, the OB market was already changing, with program budgets coming under increasing pressure as broadcasters struggled to compete in an increasingly fragmented media landscape.
We faced an urgent need to evolve the business and made significant investment in new trucks and equipment as we undertook the transition to HD.

Necessary changes to legacy BBC employment terms and pensions took time to come into effect, and the impact on our cost base was slow to realise.

It was important to us that we implemented these changes in a way that preserved the excellence on which our reputation was built, protecting also the capability to deliver high profile projects such as The Olympics in 2012. In hindsight however, we were too slow to change, for which we must accept responsibility.

We tried our hardest to keep a significant share of the BBC Sport portfolio and created a competitive and high-quality submission. 

Our prices were based, not on our own still somewhat uncompetitive cost structure, but on highly competitive market rates.  We expected to continue the program of reforms and efficiency savings over the term of the new contracts to make commercial sense of the prices we offered.

Despite our best efforts, BBC Sport decided to spread its work across multiple providers and apparently did not value the strategic partnership that SIS offered. 

Only time will tell whether this is a good decision for the BBC. 

For us, with our competitors already benefiting from long term relationships with other broadcasters now topped up by the newly-won BBC work, SIS has been left out in the cold.

We believe that suppliers can only remain profitable in today’s UK OB market by gaining significant market share or by dominating a particular niche. 

Without the BBC Sport work, SIS was stranded as a general-purpose supplier with neither the scale nor the specialisation to be profitable. 

Faced with the looming need for new investments in 4K and IP media management, the path to profitability was simply too long, and closure turned out to be the only sensible option.

Our OB division’s résumé speaks for itself. 

Our people have, for many years, delivered high-profile, complex jobs of great cultural importance that have captured the imagination of our nation, including a Royal Wedding, the funeral of a former Prime Minister, music festivals such as Glastonbury and The Proms, and major sporting events such as Wimbledon, The Open Golf, The London Marathon and The Grand National and, of course, The London Olympics – to name a few – always with outstanding professionalism and impeccable quality.

As we wind down SIS OB’s operation over the coming months, our shareholders and our management team are determined to wrap up successfully all our contracts with this same level of commitment to excellence, all the way up to our final day of operation. 

We are even more determined to help our staff make the transition to the next chapter of their careers.

Gary Smith is Managing Director of SIS


Posted 13 November 2013 by Gary Smith
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