Pace-setter gets back in the race
25 May 2003
Barry Rubery, a pioneer of the digital revolution, re-enters the pay-TV business, writes Kate Bulkley
Barry Rubery, the salesman who set up Pace Micro Technologies and then quit the set-top box maker shortly after its 1996 flotation, is back.
This week the smooth-talking Yorkshireman, who famously commuted in a helicopter, launched his new set-top box maker, Fusion Digital Technology, with the help of £3m from Beko Electronik, the television set manufacturing unit of Turkish conglomerate the Koc Group. Beko will manufacturer the boxes. Mr Rubery has a 30 per cent stake.
"I still know a lot of people," says Mr Rubery, who left Pace in 1997 with about £80m from the successful share placing. "We're going back to basics, like where Pace was when we started the digital revolution."
Mr Rubery quit Pace when it issued the first of a long series of profit warnings. Pace's shares were then 130p. They have since had a roller-coaster rise, peaking at 1,245p in 2000 before collapsing to a low of 14p. On Friday they closed at 46.75p. "There is huge rationalisation now in the pay-TV business," says Mr Rubery, who was speaking at the Mediacast exhibition in London last week where Fusion was launched. "The winners have won and the losers have lost."
Mr Rubery, who one long-time acquaintance called "the salesman supreme", was sporting a white golf shirt emblazoned "The Boys are Back".
Mr Rubery admits he toyed with, but dismissed, the idea of making a bid for his old company Pace, which has issued five profit warnings in the past two years as it has struggled to get control of its costs in a falling market. Pace's share price has crept up from a February low of 14p on bid speculation from Motorola and Scientific Atlanta, two large rivals.
Mr Rubery believes the financially stretched cable TV companies in particular need the kind of product he knows how to build and deliver. "Cable companies have realised that high-spec, expensive boxes are not the way forward because they cannot generate sufficient revenues from interactivity and other services," says Mr Rubery. Fusion will have its first low-cost boxes on sale in the UK in September, including an £80 digital terrestrial TV (DTT) box.
In fact, the DTT box market, which is being pushed by Freeview, is one of the few vibrant areas of the pay-TV business and Mr Rubery is making a special effort to claim the high ground. His DTT box will have a seven-day-in-advance electronic programming guide - something unavailable on all rival products. He predicts by the end of this calendar year, Fusion will clock up £12m in sales.
Mr Rubery's return was met with mixed reactions. "He's brave," offered one senior company executive from rival Motorola. But one thing Mr Rubery brings to the Fusion table is his experience of the successful years at Pace. He says the key to his new venture is the same as it was in 1982 when he and David Hood founded Pace.
"I spent a lot time listening to what pay- TV operators needed," he recalls. "If you do that and are lean and mean [on the cost side] then it can work."
Since leaving Pace, Mr Rubery has bought and sold struggling football club Huddersfield Town, helped set up an internet portal for UK football clubs to market themselves better, and built houses in Barbados. But the current state of the industry aroused his interest again. "I figure Pace still has £1m a week in overheads and that says they aren't exactly lean and mean," says Mr Rubery. "We can be extremely competitive."