Montreal’s Aldea capitalizes on sports’ international appeal

MONTREAL — Over the past month, 32 soccer teams played 64 matches in Brazil while millions around the world tuned in. As those transmissions were reaching their destinations around the globe, many of those signals were monitored through an unassuming office building near the Pierre Elliott Trudeau airport in Montreal’s west end. Aldea Solutions Inc. provides broadcast transmission services to broadcasters around the world. Its contracts have included the recent FIFA World Cup and this year's Winter Olympics. It is the only company in Canada providing this kind of international connectivity, and one of only 10 in the world, said CEO Lionel Bentolila in an interview at the Aldea offices. “In the last World Cup, in 2010, all of Spain was watching the World Cup and Spain becoming the world champion … through transmissions that were going from South Africa to Spain,” he said. “But those transmissions were provided by a company in Montreal.” Aldea rents space on a fibre network that extends across both North and South America and into parts of Europe, and then transmits content to broadcasters and content providers. Much of that content is live sports and news, though it also transmits 24-hour live channels from the point of origin to broadcast distributors. Many of Aldea's transmissions go from one part of the world to another and have nothing to do with Canada. However, it also works with Canadian broadcasters such as BCE Inc.’s CTV and Quebecor Inc.’s TVA Sports, Bentolila said. He noted that the company is strong in Latin America because, when it was starting out, that's where it saw the best business opportunity. “That’s where we started, and we became stronger and stronger,” he said. The company, which was founded in 2001 with venture capital from Montreal, was bought by Mexican telecom Marcatel in 2008. The deal made sense “because of the growth in the video business, but also because of the presence in the Americas,” Bentolila said. Bentolila would not disclose the company’s revenues, though he noted it now has 50 employees after growing 15 to 20 per cent a year since it started. Since its founding, there has been significant technological change, Bentolila said, as Aldea went from transmitting standard definition (SD) signals to high-definition (HD) signals and bandwidth that’s “three, four, 10 times what we used to do 10 years ago.” “We do a lot more data. We do a lot more of transmissions that are interactive. For the World Cup, we’ve started doing some of the web streaming for the second-screen applications,” he said. “Now we’re starting to look at ultra HD , which today is not there, but maybe in three, four years, maybe it’s going to be the norm.” While the broadcast industry is dealing with a changing business environment due to the growth of online video, “for us, at the end of the day, we will still have to transmit the video, whether it’s going to end up on an iPad or a TV screen,” Bentolila said. He said events like the World Cup are “particularly challenging” because the company must take on additional clients and service on top of its regular business. This year, that meant providing World Cup signals to about 20 different clients, including broadcasters like Fox Sports, Univision and Direct TV. “Every couple of years, we have this peak of activity, which is a challenge because you need many more engineers, many more hands, and a lot of resources just to peak for a job for a month,” he said, noting that Aldea also needed to contract access to more fibre during the event, doubling its capacity for the past month. “We have shipped more than four tons of equipment , so it’s a logistics challenge,” he said, adding that in addition to the team in Brazil installing and dismantling the equipment, staff in Montreal monitor the feeds 24 hours a day. “It’s like deploying a circus —a big, big circus for one month.” Bentolila said there is a growing internationalization of in the business of sports broadcasting, both in Canada and abroad. Broadcasters around the world are investing in live sports — similar to Rogers Communication Inc.’s $5.2 billion bet on hockey — and live sports productions are becoming bigger and more widely watched globally, he said. With wider audiences comes demand for better production values and, Bentolila noted, a higher-quality production needs a higher-quality transmission. London-based SNL Kagan analyst Mohammed Hamza, who specializes in TV and video, said in a phone interview that it's critical for broadcasters to get live events right. “This is how Sky made the Premier League such a massive event, both in the U.K. and globally," he said. "It’s one of the most successful sports franchises, and it’s because Sky put so much money behind the production and quality of that production. This has been copied around the world. It’s a classic example.” John-Paul O’Sullivan, also an analyst with SNL Kagan in the U.K., said in the same phone interview that sports rights have “absolutely soared” in value. When it comes to Premier League football, for example, “looking at some of the international deals in all parts of the globe, these are huge jumps,” he said, adding he expects an increasing proportion of rights revenues to come from outside the U.K. the next time the Premier League are up for sale. “That’s sort of an indication of the internationalization of sports rights,” he said. The inroads soccer has made into Canada, and how much more broadcast coverage it has gotten, is an example of how sports are becoming more internationalized, said Gord Hendren, president of Charlton Strategic Research. “We definitely see that in terms of the amount of content being offered soccer-wise,” he said in a phone interview, adding that other sports with growth potential include tennis, in which tournaments like the Davis Cup are getting levels of coverage in Canada and abroad that they did not in past years. Brian Schecter, a media consultant with Puddle Duck Productions in Vancouver, agreed that international sporting events have come more important to broadcasters in recent years. “Sports broadcasting jumped to that level many years ago,” he said. “In the North American context, soccer was an afterthought for many, many years, and now it’s no longer the case. You get coverage of every major and domestic league in Europe and certainly in Canada on a fairly extensive basis.” “Pretty much everything is now available, in some form or fashion, on some outlet, and people gravitate to it as they see fit and as they are interested in it,” he said. “You’re now starting to see the emergence of lesser-important mainstream sports like cricket.” Bentolila said his clients have begun talking about transmitting the 2016 Olympics in Brazil. First up, though, the company will work on the 2015 Pan American games in Toronto and the 2015 women’s World Cup being held in several cities across Canada, in addition to its regular transmissions. For a company with such an international focus, “next year is going to be Canada in the centre of a lot of events,” Bentolila noted. — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

Montreal’s Aldea capitalizes on sports’ international appeal

News | 07/15/2014 4:00 pm EDT

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