KVH Industries’ World Headquarters, R.I., Manufacturing Facility. Image credit: KVH Industries

[Satellite TODAY 05-13-13] KVH Industries announced May 13 it had acquired Headland Media Limited, a media and entertainment services company providing commercially licensed news, sports, movies, and music content sold to maritime, hotel, and retail markets.

    “We intend to create a new satellite delivery service that will make it easy and affordable to the shipping companies to provide these services on-board their vessels,” said KVH’s Chief Executive Officer Martin Kits Van Heyningen during a telephone conference call May 13.

    The $24 million acquisition, which closed May 10, is anticipated to have a number of benefits for both companies, KVH officials said during an interview with Satellite TODAY after the conference call.

    “We feel we have to grow Headland Media’s content business, and their content business will help KVH build our mini-VSAT Broadband business,” said Jim Dodez senior vice president of marketing and strategic planning, KVH.

    According to Dodez, the movie content Headland Media provides typically involves sending very large files, which often is cost prohibitive and labor intensive.

    “As a result they’ve had to physically ship DVDs to ports around the world, coordinating their arrival with vessel schedules, which can be a difficult,” he said.

    By using KVH’s planned new multi-casting service, a mini-VSAT Broadband network, users will be able to send large files to multiple ships with a single transmission, Dodez said.

    “Combing KVH/Headland Media service will give shipping companies an easier, more cost effective way to deliver legal news, sports, music, and movie content to their vessels,” Dodez added.

    Headland Media has established relationships with content providers and a customer base of 9,600 vessels, 1,700 hotels, and 1,700 retail outlets receiving their various services, according to a press release issued May 13.

    “One of their big customers in the U.K. is the in-store radio service ASDA, which is part of Wal-Mart,” Van Heyningen said.

   In 2012, Headland Media generated revenue of $12.2 million, of which approximately 85 percent was derived from annual subscription-based services. During that same period, the gross profit margin was almost 78 percent, the release states.

    As for the end user impact, the availability of content onboard will benefit seafarers and shipping companies.

    “Crew members will be able to enjoy digital newspapers, movies, news clips, or updates on their favorite sporting events, accessed by modern devices including not only computers but also tablets, smartphones, and smart TVs. We plan to multicast premium services to our on-board content platform which will be distributed throughout the ship,” Van Heyningen said.

    KVH initially approached Headland Media and discovered their leading stockholder was a venture capital firm in the process of liquidating the investment portfolio that owned the Headland Media stock, according to Dodez.

    “KVH wanted Headland Media; Headland Media wanted to be part of KVH; and the owner of Headland Media was interested in selling their interest in the business. The deal came together very naturally with all parties happy about the end result,” he said.

    Mark Woodhead, CEO of Headland Media said his company is “excited to be part of the KVH family and to work with our new colleagues in developing the next generation of onboard entertainment services for ships at sea.”

   And Van Heyningen agreed noting, "We see this acquisition as a great start to KVH’s new initiative.”

    Moving forward Van Heyningen said he has several announcements of enhancements for his TracPhone product line and regarding future multicasting plans for mini-VSAT Broadband network at the upcoming Nor-Shipping Show which will be held in Oslo at the beginning of June.