Ascent Media has seen declining revenues since 2007, due in large part to the recession in TV adspend squeezing the budgets of many of its key clients. Year-on-year revenues fell by 36 per cent from 2007 to 2009 resulting in a full year loss of $52.9m in 2009. The first half of 2010 has seen losses shrink slighly to $9.9 million.

The sale of two of Ascent's divisions will undoubtedly be the climax of a large restructuring initiated in 2009. However it is still unclear what the ultimate strategic position of the firm will be as it has been cited as seeking new strategic alternatives for its systems integration business and as looking for acquisition targets, suggesting it may diversify system build and design away from broadcast and into new industries.

For Deluxe the purchase of Ascent's post businesses represents a significant consolidation in the post production industry with the combined businesses representing one of the largest players in the UK and US post facilities market. Encompass will similarly benefit from expanding into Europe and Asia, as well as bolstering its existing US businesses.

Ascent has traditionally competed with companies such as Arqiva, Chellomedia, Red Bee, TDF and Technicolor in both content distribution and creation. These companies have tended to focus their distribution businesses outside of the US and will have to welcome Encompass as a new competitor in the European market in particular, where Ascent has a strong UK-based playout and uplink business. Encompass' new transatlantic links will leave it well positioned to benefit from the increasingly file-based transfer of media assets around the world. The consolidation of several key UK post-production facilities into Deluxe represents less of a marked change in direction for the company or industry. However the failure of Ascent to maintain its business interests in service management and facilities will certainly be watched anxiously by others in the industry, not least of all Technicolor which has just fragmented much of its own broadcast SI business in the four-way split with Grass Valley, Thomson Broadcast and Thomson Networks. Technicolor retain the content creation and distribution businesses.