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Q&A With Ross Video's David Ross

Over the past 15 years, Iroquois, Ontario-based Ross Video
has seen average annual growth rates of over 20% as it expanded the sales of
its products into over 100 countries. CEO
David Ross talked to HD Update's George Winslow about the company's recent
acquisition of Media Refinery, a developer of 2-D and 3-D high-definition
character generators and motion-graphics systems, and his strategy for
expanding the company's business during a global recession. An edited
transcript follows:

Q: You recently
closed your acquisition of Media Refinery. What will that mean for the company?

A: Graphics is
becoming a real, real big part of everyone's look and workflow. We felt that
having the ability to more closely integrate that into our production switchers
and in particular to our OverDrive [Production Control System] was very
important.

Having that integration will get us into larger deals and
bigger packages and we thought it was a perfect adjacency to the things we do.

Q: How are you
responding to the economic problems facing broadcasters in terms of your
product mix?

A: I recently gave
a speech to the local high-tech community. The point I made was that if a
company wants to survive and thrive in a recession, you can't just wake up at
the start of tough times and say, ‘Oh, we need to change our product mix and
come up with a new strategy.' If you didn't prepare years ahead to have the
right product mix for a recession, then you are in trouble.

I think Ross Video is very well-positioned to weather the current
storm. We've always been providing superb value for the money and we have a
reputation for providing really high quality easy to use product with fair
pricing. I think when times are tough and companies are under pressure to
control costs, they will think of us because we have do have reputation for
meeting people's budget constraints without sacrificing quality.

I think we also have the right product mix. We have our new
CrossOver line of production switchers that are extremely budget-oriented and yet
have same quality and the same technology under the hood as what we use in our
larger production switchers. We've just moved that technology into a more cost-effective
package.

Another example is the OverDrive system. We've been successfully
selling that as a market leader for many years. But today, if you're a TV
station and you're watching your ad revenues crash, I think it is even more
appealing. You can use the OverDrive system to put on your news more
efficiently.

Q: How are these
economic troubles changing the way people are approaching HD upgrades?

A: In today's
economy, you are not upgrading your equipment because you want to or because you've
finally written off capital expense of the old equipment. You feel you have to
move to HD, because someone else in the market has gone to HD and you are
afraid of losing market share. But you know when you move to HD, you are not
going to make any additional money from HD and it creates a significant expense
you really need to justify.

Buying an OverDrive system allows you to save money on
expenses and actually offset the entire cost of the OverDrive system. Your
experience is that the [return on investment] on that is about a year and a
half, so that is an excellent way to justify the cost of an HD upgrade.

A lot of our customers are buying our production switchers
with OverDrive in mind, as well, even though they may not do it all at once.
They'll buy a Ross production switcher and then a year later put in the OverDrive
system and realize the cost savings.

Q: Even so, do you
think broadcasters are slowing their plans to upgrade to high-def production?

A: That is an
interesting question. As a company, worldwide, our orders are actually up 14%
over last year. And, if you look at the U.S.,
we are also up over last year.

So I don't see it slowing down. But if you look at the
individual deals, they are less predictable than they used to be. It used to be
that you could watch a deal going forward according to clockwork. Now, if you
are working on a deal that you think you're going to get, it might get pushed
out into the future. And then it might get delayed again until suddenly they
realize they have to do it, and then there is a panic to get it done.

Q: How has the market
been responding to your OpenGear offerings?

A: I think it is
one of the most exciting stories in the terminal business, which hasn't really
changed much over the years. The OpenGear product involves a standard chassis,
power supply and a standard control system that are available to all of our OpenGear
partners. That means their cards can plug into the OpenGear frame and
completely interoperate with each other and show up in the control system
effortlessly. So you can control a card from any of the partners within a
frame. They all show up as if they were from just one manufacturer.

We started the OpenGear concept three years ago with three
partners and about three products. We extended that to 11 partners shipping
product, with over 200 solutions in the frame, and we have even more partners --
22 partners -- signed up. So I don't think it will be very long before we can
start saying there are 300, 400, 500 solutions for this architecture.

That helps achieve real economies of scale in manufacturing
and it drives technological innovation and accelerates the research and
development efforts because companies focus on the design of a new card, not
the frame or the power supply. That means the customer gets the benefit of
constantly refreshed technology in a standardized cost-effective platform.