| ELLA VALLEY, Israel
ELLA VALLEY, Israel May 25 New technologies in
digital media services and an industry shift towards outsourcing
will bring strong growth opportunities in the coming years, said
Avi Cohen, chief executive of Israel's RRsat Global
Video distribution is a $9.4 billion market, Cohen said, and
broadcasters and studios are increasingly handing the work over
to external service providers, like RRsat. Currently about 30
percent is outsourced, but he sees that number growing.
"Every junction - a change in technology, a need for
investment - is a great reason for them to decide to move it out
and stop doing things themselves," he said. "We are getting
requests from all of the big companies, allowing us to broaden
our services, and this is a global trend."
RRsat, which distributes 630 channels worldwide and handles
all distribution of the National Football League outside the
United States, reported record revenue of $32.9 million for the
first quarter, up 12.3 percent from 2013. Net income excluding
one-time items was $2.2 million, up from $1.9 million.
According to Cohen, the company's main competitors in the
global market - UK-based Arqiva, Orange subsidiary
Globecast and U.S.-based Encompass - are all larger, but have
been less conservative in growing and are highly leveraged.
"Financially, we are the most stable in the field," he told
Reuters in an interview at the RRsat compound in central Israel.
He forecast revenue of $129-$134 million for 2014, up from
$121.8 million last year, and said 85 percent of revenue is
"The number of channels is growing and they are moving to
high definition. They are starting to talk about ultra-high
definition ... These are developing trends and present us with
growth opportunities," said Cohen.
North America and Europe remain the largest markets,
producing the most content and offering potential for what he
called higher tier outsourcing.
"We can access just small slices of it and it will add
significant growth," he said.
RRsat's largest shareholders are Rapac Communication and
Infrastructure with a 34.3 percent stake and private
equity group Viola Group, which holds 28.6 percent.
(Editing by Tova Cohen)