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Blackmagic Design acquires Teranex Systems Inc., in a strategic move to complement their own efforts for providing extremely high quality image processing for broadcast, feature film and high end post production needs, with plans to simplify the Teranex product line and release the VC-100 broadcast image processor.
Blackmagic Design President Dan May
On the heels of acquiring of the Orlando, FL-based Teranex
, Blackmagic Design
has announced that it plans to focus that company's product line. "They had a couple of different hardware flavors and then would sell software modules that would go along with the hardware," explains Blackmagic Design president Dan May. "You could build out something for $90,000 -- or start with a $15,000 solution all the way up through $30,000 or $50,000 solutions."
Instead, Blackmagic Design will now release Teranex's VC-100 broadcast image processor complete with all the software, for a list price of $20,000. For the customer who came in at the lowest price level possible, that's a bit of a price jump. "But most people were buying at least the $30,000 version of it," says May. "We can't turn this into a $500 card. It's still a premium product. Now, here's a great Windows operating system-based product that we can bring down to a simplified product and still have the whole Teranex line-up of software."
"No two customers had the same thing in the previous Teranex line-up," he adds. "Now, one skew, one product, $20,000." For customers who bought in at the higher level, May notes that they can now quite affordably add VC-100 systems. And for those that bought at the mid-range, he notes that they'll have software that didn't come with the original product. "We want to be considerate with what people have, but we also have to build a business with models that are proven to work," says May, who notes that any existing customers of Teranex VC80 and VC100 models can upgrade to the full software feature set for $3,000.
With regard to moving Teranex to a new business model, May explains what needs to be done. "Teranex had factories and contract manufacturers and gear being built to order," he says. "That's not how Blackmagic Design functions. Rather than making 50 models, we'll make five with all the features, so we can sell thousands of each model rather than a few of each. At Blackmagic Design, it's always been about simplifying the product line."
Prior to the acqusition, Ternanex, which made its name in extremely high quality image processing, offered broadcast image processor products with options for very high quality de-interlace, up conversion, down conversion, SD and HD cross conversion, SD and HD standards conversion, automatic cadence detection and removal even with edited content, noise reduction, adjustable scaling, aspect ratio conversion and smart aspect ratio 4:3 to 16:9 conversion, all with timecode and multi-channel audio conversion. The 3D toolkit added 3D camera alignment, 3D dual channel conversions and patent-pending 3D simulation.
Teranex's VC-100 broadcast image processor (Top angle view). Please click on image above for larger view.
May points out that Blackmagic Design's acquisition of Teranex was logical given each company's strengths. "The least surprising acquisition we've made is Teranex," he says. "Other acquisitions we've done have been about accelerating a target on a roadmap, like switchers, or, with da Vinci Resolve, taking the business in an entirely new direction. Teranex's technology fits right into the markets we currently serve and have been growing. We knew there was a lot of potential to take this technology and see what we could do with it."
Simplifying the Teranex product line to the fully loaded VC-100 is just part of the plan. Teranex got its start as a Lockheed Martin project to develop real-time video processing for the U.S. military. Over the course of the company's near-30 year history, it was granted 34 patents for technologies it developed, including a SIMD array processor to execute sophisticated algorithms in real time.
Teranex's VC-100 broadcast image processor. Please click on image above for larger view.
"The greatest part was finding that the company was a good group of people with a good vision," says May. "We've been able to keep that whole team together. The brain trust was maintained. Now we're going to merge its brain trust with Blackmagic Design and continue to keep customers happy."
The intellectual property ownership of 34 patents also won't go to waste. "It's a very scientific technology that they bring to the table," he says. "Now we've retained this great engineering talent and their technology."
How to develop that intellectual property ownership will take some time, says May. "Because there are all those patents, we have lots of ideas and will have to figure out what to do with them," he says. "We don't have answers to that now. It's definitely going to be an exciting addition for us." May predicts that we'll start seeing the fruits of the blend of two companies' brain trusts a year from now, in early 2013.
May is right that Blackmagic Design's acquisition of Teranex was an obvious move. With that company's deep history in managing a wide range of high-end conversions, Blackmagic Design has its work cut out for it deciding how best to leverage all those patents. That's a good problem to have in today's market. It's a likely bet that, as May points out, Blackmagic Design will find ways to work those technologies into both its current product line-up and -who knows? - new products that can help complete its ecosystem.