Leading Media Technology Executives to Discuss Next-Generation Technologies at NAB Show NY

Conference Sessions | Posted by Josh Stinehour
Nov 03 2016

If you are interested in hearing leading media technology experts discuss the business implications and latest developments with next-generation technologies including ATSC 3.0, Cloud services, and IP-based infrastructure, then you will want to attend the series of conference session Devoncroft is co-producing at the upcoming NAB Show New York on Thursday, November 10th.

You may attend the sessions by registering for the Core Package for the exhibition.   As part of our partnership with the NAB Show New York organizers, we are pleased to offer the discount code EP04 to enable a $50 savings on the Core Package Pricing.

We hope to see you in New York at the Javits Center.

 

NAB Show New York Conference Session Details

 

Key Trends Driving Investment in the Media Technology Sector

Thu. November 10 | 11:15 AM – 11:45 AM | Inspiration Stage 4

Description:

Top broadcast analyst Joe Zaller will present a summary of key data derived from a variety of broadcast market intelligence projects including the Devoncroft Partners 2016 Big Broadcast Survey, the industry’s definitive demand-side market study. This session will highlight the evolution of technology investments in the media technology market, including the macro drivers of technology investments, the market performance in 2016, and expectations for technology spend in 2017. Specific topics will include the strategic business drivers of broadcast technology spending, considerations for next-generation technologies (4K / UHD, IP / IT, Cloud), and the increased level of M&A activity by both vendors and broadcasters.

Speaker:

  • Joe Zaller, President Devoncroft Partners

 

Link to NAB Show NY Session Listing

 

ATSC 3.0: Impact on Business Strategies and Technology Spending

Thu. November 10| 12:00 PM – 12:30 PM | Inspiration Stage 4

Description:

A panel of technology decision makers at leading broadcasters will discuss how the forthcoming ATSC 3.0 standard is impacting their investment decisions. Hear where broadcasters are planning to invest, the timeline for spending, and how ATSC 3.0-related spending will impact investment in other areas. . The discussion will evaluate practical investment considerations for deployment costs, new revenue models, and consumer adoption timing. Participants will share perspectives in the context of the latest developments with the ATSC 3.0 standard and regulatory process.

Speakers:

  • Delbert Parks, SVP and CTO Sinclair Broadcast Group
  • Dave Siegler, VP, Technical Operation Cox Media Group

 

Link to NAB Show NY Session Listing

 

Evaluating Actual IP-Based Infrastructure Deployments

Thu. November 10| 2:00 PM – 2:30 PM | Inspiration Stage 4

Description:

A panel of technology decision makers at leading broadcasters will discuss the transition of live broadcast environments to IP-based technology infrastructure. The discussion with include a review of business opportunities, remaining challenges, and timing of the transition. In particular, the panelists will share perspectives on business issues related to migrating to IP-based infrastructures, such as different purchase models, expectations of reliability, impact on broadcast technology vendors, measuring benefit, and training requirements.

Speakers:

  • Todd Donovan, Senior Vice President, Broadcast Operations & Engineering ABC Television Network
  • Thomas Edwards, VP Engineering & Development FOX NE&O

 

Link to NAB Show NY Session Listing

 

The Business Case of the Holistic Content Factory: Media Supply Chain Management and Cloud Native Applications

Thu. November 10| 2:45 PM – 3:15 PM | Inspiration Stage 4

Description:

A panel of technology decision makers at leading media companies will discuss how media operations are evolving so that cost structures are aligned with the need to deliver content to a mix of multiple linear and OTT delivery platforms. This session will touch on themes including automated workflow-driven processes, media supply chain management, and cloud-native applications. . Discussion topics will include the business case for moving media operations to cloud infrastructure, and the current technical and business gaps preventing cloud deployments in the media industry. The panelists will also share opinions on what they require from technology suppliers as they migrate to cloud-based architectures.

Speaker:

  • John Honeycutt, CTO Discovery Communications

Link to NAB Show NY Session Listing

 

Should Cloud-First Thinking be a Strategic Imperative for Media Companies?

Thu. November 10| 3:30 PM – 4:00 PM | Inspiration Stage 4

Description:

Although broadcasters and media companies are increasingly embracing cloud-based technologies, there is not a one-size-fits all approach to cloud adoption. Some companies are “all-in” and working towards “cloud-first” thinking, whereas others are building “cloud-ready” facilities that keep much of the infrastructure on premise. This moderated discussion features the technical leaders from large media companies with different business models and different approaches to deploying and utilizing cloud technology in major projects they are currently planning. This session will touch on themes including automated workflow-driven processes, media supply chain management, and cloud-native applications. Discussion topics will include when business drivers justify the case for moving media operations to cloud infrastructure, and when it makes sense to deploy traditional on premise infrastructure. The panelists will also share opinions on gaps preventing cloud deployments in the media industry and what they require from technology suppliers as they migrate to cloud-based architectures.

Speakers:

  • Fred Mattocks, GM, Media Operations & Technology CBC
  • Steve Plunkett, Chief Technology Officer, Broadcast and Media Services Ericsson

 

Link to NAB Show NY Session Listing

 

Related Content:

 

 

© Devoncroft Partners 2009-2016.  All Rights Reserved.

 

 

Dolby Announces 2016 Results; Continued Dolby Vision Progress

Analysis, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
Nov 03 2016

Dolby announced fiscal fourth quarter and full year revenue for the twelve months ending September 30, 2016.  2016 fiscal year revenue was $1,025.7 million, a 5.68% increase versus the 2015 fiscal year.  Dolby_logo.svg

Full year revenue was within the guidance provided at the end of fiscal 2015 for total revenue between $1 billion and $1.03 billion.

2016 FY GAAP net income was $185.9 million or $1.81 earnings per share (diluted).  This represents a 2.5% increase over the net income for the 2015 fiscal year of $181.4 million ($1.75 earnings per share).

GAAP gross margins were 89.4% for the year, a slight decrease versus the gross margins of 90.2% from the year earlier period.  Operating margins were 23%, an increase of 100 basis points over the operating margins from fiscal 2015.

2016 Fiscal Year Revenue by Type:

Dolby reports revenue across licensing, product, and service activities.  Product revenues consists primarily of sales of Digital Cinema Servers and Dolby Cinema Audio Products.

  • Licensing revenue for fiscal year 2016 was $917.0 million, an increase of 5.6% versus fiscal year 2015.
  • Product revenue was $90.5 million for the year, an increase of 7.9% compared to the 2015 fiscal year.
  • Services revenue were $18.2 million during fiscal year 2016, a decrease of 2.5% against 2015.

Product gross margins for 2016 were 28%, a substantial increase over the 16% gross margins from 2015.

2016 Fiscal Year Licensing Revenue by Customer Vertical:

Licensing revenue in the Broadcast vertical for televisions and set-top box sales was 46% of total licensing revenue or $421.8 million during fiscal 2016.  On an aggregate basis, broadcast licensing grew 10.4% versus the 2015 fiscal year.

As part of management’s prepared comments on the Dolby’s earnings call, President and CEO Kevin Yeaman drew attention to the strong performance in the broadcast sector.  “We had another strong year in broadcast. Dolby Audio is an established format in developed markets like North America and Western Europe, and we are well positioned in areas like Africa, India and China, when the transition to digital broadcast is underway. Future growth in broadcast will come from the continued migration of emerging markets to digital televisions and the rollout of high-definition and 4K set-top boxes with Dolby Audio in both developed and emerging markets” said Mr. Yeaman (Sourced from Seeking Alpha transcript).

Fiscal Q4 2016 Results:

Fiscal fourth quarter revenue was $233 million, flat against the year earlier period, and a decrease of 16.1% versus the preceding quarter, FQ3 2016. Management attributed the sequential drop in revenue to the higher timing of licensing payments in Q3 compared to Q4.

For the quarter, Dolby’s GAAP net income was $23.9 million or $0.23 earnings per share, a 48.6% decline when measured against the fiscal fourth quarter of 2015, and a 62.4% decline against the preceding quarter.

GAAP Gross Margins were 87% during the fourth quarter, a 210 basis point decline from the year earlier period and a 410 basis point decline versus FQ3 2016.  Operating margins were 16%, an increase over the 12% from FQ4 2015 and a decrease versus the 29% operating margins during the preceding quarter.

Management guidance at the end of third fiscal quarter was for revenue in the range of $220 million to $230 million for the fourth quarter with gross margins between 88% and 89%, and GAAP earnings per share of $0.16 and $0.22.  Dolby exceeded its guidance on both revenue and earnings per share, though underperformed on gross margins.

Update on Dolby Atmos, Doly Cinema, and Dolby Vision:

Among the revenue drivers cited by management were the growing adoption of Dolby Atmos (next-generation immersive audio technology), Dolby Vision (next-generation imaging technology), and Dolby Cinema (premium cinema experience combining multiple Dolby technologies).

  • Dolby Atmos is now installed or committed in over 2,400 cinematic screens worldwide. 550 feature films using Dolby Atmos have been announced or released.
  • The first televisions incorporating Dolby Vision become available in the past year. LG is including Dolby Vision in their OLED and Super UHD LCD TVs; VIZIO is including Dolby Vision in their R, P, and M Series; and TCL and Skyworth are also shipping TVs with Dolby Vision.  Content incorporating Dolby Vision is now available from Warner Bros., Sony Pictures, MGM, Universal, Lionsgate, Netflix and Amazon Studios.
  • Over 30 Dolby Cinema locations were added during 2016, bringing the total to over 40.

“We are well on our way to establishing that Dolby Vision is the best way to experience HDR content” stated Mr. Yeaman on Dolby’s earning call with analysts.  “Our job this year is to accelerate the deployment of Dolby Vision” continued Mr. Yeaman.

Financial Guidance

Dolby’s guidance for the fiscal year 2017 is for revenue between $1.06 billion and $1.09 billion.  Broadcast licensing revenue is expected to remain relatively flat in 2017.

Guidance for the first quarter of fiscal 2017 is revenue in the range of $250 million to $260 million, gross margins between 88% and 89%, and earnings per share between $0.34 and $0.40.

 

 

Related Content:

Press Release: Dolby Fiscal Fourth Quarter and Full Year 2016 Earnings Release

Earnings Transcript: Dolby Fiscal Fourth Quarter Results (SeekingAlpha)

 

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

 

 

Vislink Revenue Declines 15% in 1H 2016; Forecasts Breach of Debt Covenants

Analysis, Broadcaster Financial Results, Quarterly Results | Posted by Josh Stinehour
Oct 05 2016

UK-based Vislink plc, which owns broadcast industry brands Advent, Link, MRC Gigawave, and Pebble Beach, announced results for the first half of 2016.  1H 2016 revenue was £22.6 million, a decline of 15% versus the first half of 2015.  vislink

Vislink was anticipating challenging results for the first half of 2016 having published a negative trading update on July 6, 2016.  The trading update warned sales in Vislink’s Communication System (“VCS”) business were below management expectations.  In addition, the July update indicated the further restructuring of VCS would necessitate a non-cash write-off of £6 – £9 million and additional annual cost reductions of £1 – £2 million.  This adds to last year’s restructuring of the division when headcount was decreased 26% and a £2.5 million charge was incurred.

The underperformance of VCS caused Vislink to consume its entire banking facility and will subsequently force Vislink to breach its debt covenants.  Once Vislink is officially out of compliance with its financing arrangements, the Company’s bankers may call for repayment of existing loans – which Vislink does not have the cash to repay.  While this represents a material uncertainty for the Company, Management did indicate it is engaged in constructive discussions with its bankers.

In order to improve cash generation, Vislink’s management is canceling the Company’s dividend until debt drop below EBITDA, canceling its equity incentive program for senior management, and will “continue to examine the appropriateness of the Board and Group structure.”

The announcement has resulted in a greater than 50% decline in Vislink’s stock price decline from close on September 29, 2016.  Measured against Vislink’s 52 week stock price, the decline is greater than 75%.

Net loss for the first half of 2016 was £32.2 million or 26.9p per share, compared to a net loss of £0.9 million or 0.4p per share in the year-earlier period.

1H 2016 operating loss was £32.0 million versus an operating loss of £0.8 million during 1H 2015.  Operating losses included non-cash write downs of £23.3 million for goodwill and acquired intangibles as well as a write-down of £6.3 million of inventory and capitalized development costs.

A majority of Vislink’s goodwill write-down was associated with the Broadcast division (excluding Pebble Beach).  The entire £20.6 million of goodwill for Vislink’s Broadcast division was written down.

Given the magnitude of the non-cash items it is informative to review operating cash flow for the period.  During the first six months of 2016 operating cash usage was £1.2 million, compared to generation of £0.8 million during the first half of 2016.

The results for the first half benefited from a positive £2.2 million foreign currency translation based on a weaker GBP.

Broadcast Performance:

Vislink’s broadcast revenue for the first half of 2016 was £20.6 million, a 7.6% decrease versus broadcast revenue in 1H 2015.  The decline was primarily related to an 18.5% year-over-year drop in the revenue of Vislink’s Communication Systems (“VCS”) business.

Management attributed the decline in VCS to a combination of a general pause in spending ahead of the adoption of next-generation technologies and a reduction in spend from broadcasters driven by a diversion of budgets from infrastructure to investing in content.

Pebble Beach revenue for 1H 2016 was £5.4 million, a slight decrease of 1.4% when compared to the first half of 2015.  In the commentary accompanying the earnings release, the Company highlighted a 53.3% growth in Pebble Beach’s order book to £5.4 million during the 1H 2016 (1H 2015: £3.5 million).

Revenue by Region:

  • Revenue from the UK & Europe region was £7.6 million during the first half of the year, an increase of 20.1% over the first half of 2015. The UK & Europe represented 33.6% of total revenue for the first six months of the year, versus 23.7% in the same period of 2015.
  • Revenues from the Americas were £7.9 million, a 27.4% decrease against 1H 2015. On a percentage basis, Americas was 35% of total revenue for the first half of 2016, down from 40.6% in 1H 2015.
  • First half 2016 revenue from the Middle East and Africa (MEA) was £3.2 million, down 3.2% versus 1H 2015. The MEA region represented 14.2% of revenue in 1H 2016, up from 12.4% during the first half of 2015.
  • APAC revenue in 1H 2016 was £1.9 million, up 4.1% versus the comparable 2015 period. APAC revenue was 8.4% of total revenue in 1H 2016, up from 7.1% in 1H 2015.

Operating Expenses by Function:

  • R&D expenses recognized in 1H 2016 were £3.6 million, a 29.5% increase over 1H 2015. As a percentage of revenue, R&D expense was 16.1%, a substantial increase from the 10.6% in 1H 2015.  During the first half, Vislink wrote down £0.8 million of capitalized R&D investment.  Management did not identify the associated products or technologies associated with the write down.
  • Sales and marketing (S&M) expenses were £4.6 million, a slight rise of 1.4% against 1H 2015 S&M expense level. On a percentage basis S&M was 20.2%, an increase over the 17.0% of revenue from 1H 2015.
  • Administrative expenses were £2.9 million, a decrease of 28% versus the first half of 2015.

Cash and Debt Levels:

Vislink had a cash balance of £3.1 on June 30, 2016, down from £3.2 at the end of 2015.  During the same time period, the Company’s debt balance increased to £12.0 million from £9.0 at the end of 2015.  These developments have increased Vislink’s net debt to £8.8 million.  This compares to net debt levels of £5.7 million at 2015 year end and £1.2 million at the end of the first half of 2015.

In the release Management indicted debt has increased further since the end of the June and Vislink is now using its entire Revolving Credit Facility of £15.0 million.

Business Outlook:

Vislink’s order book at June 30, 2016 was £11.4 million, an increase of 60.5% over the same date last year.

In their prepared remarks Management discussed the organic growth of Pebble Beach, its pipeline of software bolt-on acquisitions, and its continued focus growing Vislink’s software business.  The below slide is taken from the Vislink’s presentation on the first half results.

 

slide

 

“We continue to see significant underlying organic growth in our software business with a strong order intake which has carried through into H2.  The long term prospects for Pebble Beach Systems continue to improve as we augment our core enterprise software solutions with cloud enabled software applications. We also have a pipeline of partners and software bolt-on acquisitions which will further enhance the Group strategy of building a high margin, cash generative software business” said John Hawkins Executive Chairman of Vislink.

 

 

Related Content:

Press Release on Vislink 1H 2016 Results

Management Presentation on Vislink 1H 2016 Results

Trading Update on Vislink 1H 2016 Preliminary Results

 

 

© Devoncroft Partners 2009-2016.  All Rights Reserved.

 

 

Vitec Group acquires Wooden Camera for Consideration Up to $35 million

Analysis, Broadcast Vendor M&A | Posted by Josh Stinehour
Sep 20 2016

The Vitec Group has acquired Wooden Camera, a provider of camera accessories including baseplates, cages, hand grips, matte boxes, monitor mounts, shoulder rigs, and zip boxes.  deal-logo

Wooden Camera is based in Dallas, Texas and privately owned by its management team, Ryan and Elizabeth Schorman.  Both will remain with business post-acquisition.  Wooden Camera will become part of Vitec’s Broadcast Division.

The press release announcing the acquisitions cites the opportunity to grow Wooden Camera through expanded distribution as part of Vitec’s global sales network.  Also noted in the announcement is the opportunity for Wooden Camera to benefit from Vitec’s manufacturing and product sourcing capabilities.

As part of the acquisition announcement The Vitec Group disclosed portions of Wooden Camera’s recent financial results along with the high-level deal terms.

Wooden Camera generated an unaudited adjusted EBITDA of £1.9 million ($2.5 million) for the 2015 calendar year.   Management indicated Wooden Camera has grown in the year-to-date period of 2016.

The upfront cash consideration is £15.3 million ($20.0 million), which is subject to post-closing adjustments.  The deal also includes a potential earn out representing an additional £11.5 million ($15.0 million) of consideration.  The earn out payments are based on Wooden Camera achieving “demanding” EBITDA targets for the financial periods thru the close of the 2018 calendar year.  The 2018 EBITDA target is $7.3 million (this represents an almost tripling of 2015 EBITDA).   Vitec will finance the transaction using its existing banking facility.

Using the 2015 EBITDA disclosure, the upfront consideration values Wooden Camera at 8.0x 2015 EBITDA (not including the earn-out).  The total consideration has the potential to value Wooden Camera at 17.5x 2015 EBITDA.  Since more than 40 percent of the total potential deal value is in the form of an aggressive earn-out, it is more appropriate to focus on the implied valuation of the upfront consideration.  The multiple of 2016 EBITDA – though unavailable – is likely less since Wooden Camera has continued to grow.

To put these figures in context, The Vitec Group currently trades in the public markets at a valuation of 7.8x trailing twelve month EBITDA and 1.0x trailing twelve months of revenue (on an enterprise value basis).

The press release states “The Board expects the acquisition to be immediately earnings enhancing.”  This statement is then clarified in the notes to the press release as follows, “This statement should not be taken to mean that earnings per share of The Vitec Group plc will necessarily exceed or be lower than historic earnings per share of The Vitec Group plc and no forecast is intended or implied. This refers to earnings before charges associated with acquisition of businesses.”

It is interesting to reflect on the impact of a weaker GBP currency on the transaction pricing.  The “Brexit” referendum of June 23, 2016 precipitated a decline of the GBP versus the US dollar.  A weaker GBP should – on balance – benefit Vitec’s revenue results.  However, it will make expenditures in other currencies more expensive, including the acquisition of a US-based business as is the case with Wooden Camera.  On June 1, 2016 the exchange rate was 1.44 USD / GBP.  The figures in The Vitec Group press release were based on an exchange rate of 1.31 USD / GBP or 9% lower.  Meaning, the acquisition in GBP terms was 9% more expensive because of the recent disruption in the GBP currency.

The Vitec Group often structures its acquisitions with a substantial portion of contingent consideration.  This was also the case in the recent acquisitions of Offhollywood, SmallHD, and Teradek.

Commenting on the acquisition Vitec’s Group Chief Executive Stephen Bird stated, “I am delighted to welcome the Wooden Camera team to Vitec. Wooden Camera’s products are the glue that binds all the building blocks together on a professional camera system.  This leading business complements Vitec’s strategy of providing premium branded broadcast products and services to our customers to capture and share exceptional images. The business has great prospects and we anticipate that it will generate a good return on our investment.”

 

 

Related Content:

Vitec Group Press Release on Wooden Camera Acquisition

 

 

© Devoncroft Partners 2009-2016.  All Rights Reserved.

 

 

Evertz Announces Record Backlog and Shipments along with C$13.5 million IP Order

Analysis, Broadcaster Financial Results, Quarterly Results | Posted by Josh Stinehour
Sep 19 2016

Evertz announced revenue for the first quarter of its 2017 fiscal year, which ended on July 31, 2016.  Revenue for the quarter was C$87.0 million, up 2.5% versus the same period a year ago, and down 9.7% versus the previous quarter. evertz-logo

The strengthening US dollar contributed a foreign exchange gain of C$6.6 million during the quarter.

Net earnings for the quarter were C$18.6 million (C$0.25 earnings per share), flat versus the first fiscal quarter of 2016, and an increase of 129.6% versus the preceding quarter. The company generated C$19.9 million cash from operations in the quarter.  This compares to cash used by operations of C$7.8 million during the same period last year and cash from operations of C$10.1 million during the previous quarter.

Revenue results for the quarter were below the consensus estimates of equity analysts of C$95.1 million, while earnings results were above the consensus estimates of analysts of C$0.24 per share.

During management’s exchange with analysts, EVP Brian Campbell attributed the lower level of revenue in the quarter to the typical lumpiness of orders along with the stretching of certain orders into future quarters.

The Company said its shipments during August 2016 were C$31 million, and that its purchase order backlog at the end of the quarter was in excess of C$70 million.   The combined shipments and backlog of C$101 million is a record level for Evertz.

The top ten customers in the quarter accounted for 30% of revenue and no customer accounted for an excess of 6% of revenue. Evertz had 104 individual customers each representing over $200,000 of revenue.

Gross margins in the quarter were 57.3%, down slightly from 56.4% last year and also down from 57.1% last quarter.  For the quarter operating margins were 28.5%, compared to 29.9% during the same period last year and 23.9% in the FQ4 2016.

Evertz ended the quarter with C$125.4 million of cash and cash equivalents up slightly from C$123.1 million at the end of last quarter.

Revenue by Geography:

  • Revenue in the US/Canada region was C$52.1 million, an increase of 4.2% versus the same period a year ago, and flat versus the previous quarter. US/Canada sales were 59.9% of total revenue during the quarter, up from 58.9% of revenue during the same period a year ago, and a substantial increase versus the 53% contribution during the preceding quarter.
  • International revenue was C$34.9 million, flat versus the previous year’s result and a decrease of 22.6% when compared to the previous quarter. International sales were 40.1% of total revenue, down from 41.1% last year and 47.0% last quarter.

Operating Expenditures by Function:

  • R&D expenses (before tax credits) in the second quarter were C$17.5 million, an increase of 7.4% versus the same period last year, and an increase of 1.2% versus the previous quarter. R&D expenses were 20.1% of revenue in the quarter, higher on a percentage basis than the 19.2% last year and the 17.9% last quarter.
  • Selling and administrative expenses for the quarter were C$14.9 million, a slight increase of 0.7% versus last year, and a decrease of 8.0% versus the preceding quarter. Selling and administrative expenses represented approximately 17.1% of revenue in the quarter versus 19.2% of revenue during the same period last year, and 17.9% of revenue in the previous quarter.

Management Commentary on Results:

Consistent with earlier quarters, Evertz EVP Brian Campbell attributed the overall performance and combined shipment and order backlog “to the ongoing transition to HD, channel proliferation, the increasing global demand for high-quality video anywhere anytime”.  Also consistent with previous quarters, Mr. Campbell added emphasis on “the growing adoption of Evertz’s IP-based software-defined networking solutions.”

While Evertz declined to provide an update on the number of SDVN deployments (over 50 SDVN installments as of the 2016 NAB Show), the Company did issue a press release on the receipt of a C$13.5 million purchase order for a “state-of-the-art” IP facility for a US customer.  The purchase order includes multiple EXE hyperscale and IPX modular switch cores, IP media gateways, and compression and control solutions.

In responding to a question by Thanos Moschopoulos of BMO Capital Markets on the interest level of cloud for Evertz customers, Mr. Campbell provided commentary on cloud adoption in the media sector.  “It’s very much early days, but it is meaningful” stated Mr. Campbell.  “And Evertz is well down the path in virtualizing the important components for customers to meet to their needs, whether that’s in a public cloud or in a private cloud or hybrid” continued Mr. Campbell.

 

 

Related Content:

Press release on Evertz FY Q1 2017 Results

MD&A on Evertz FY Q1 2017 Results

Financial Statements for Evertz FY Q1 2017

Press Release on “State-of-the-Art” IP Facility Order

 

 

© Devoncroft Partners 2009-2016.  All Rights Reserved.

 

 

Download New Report: IBC 2016 Media Technology Industry Analysis

Analysis, broadcast industry technology trends, broadcast industry trends, broadcast technology market research, Broadcast technology vendor financials, technology trends | Posted by Josh Stinehour
Sep 09 2016

As the 2016 IBC Show kicks off in Amsterdam, Devoncroft Partners has published a 100+ page overview of recent developments in the broadcast and media technology sector.

A link to the download the report is available at the bottom of this page.

ibcshow-frontpage

The analysis reflects recent discussions we’ve had with executives at media companies, service providers, and technology vendors.  In particular, the presentation includes perspectives on the following,

  • Media Revenue Models Transitioning
  • Investment in OTT Technologies, Services
  • Invesotr Concerns on Media Industry Transition
  • Continued Media Restructuring
  • Media Technology Industry Market Performance 2009 – 2015
  • Technology Vendor Results in 2016
  • Market Catalysts in 2016
  • Sector Expectations for 2017
  • Review of Technology Trends, Project Deployments
  • Considerations for Future Media Technology Architectures
  • Implications of Market Developments on Technology Vendors

 

We welcome feedback, comments, and questions on this report.

If you would like to schedule a meeting at the IBC show, please let us know as soon as possible.  We have limited availability remaining.

We hope to see you in Amsterdam.

 

Please click here to download a PDF copy (10 MB) IBC Show 2016 – Observations and Analysis of the Media Technology Industry from Devoncroft Partners (registration required).

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

 

 

Media Tech Vendor M&A: Blackmagic Design Acquires Ultimatte

broadcast technology market research, Broadcast Vendor M&A | Posted by Joe Zaller
Sep 09 2016

Blackmagic Design today announced it has acquired blue and green screen Ultimatte.

Terms of the deal were not disclosed.

Ultimatte was founded in 1976 and has won an Emmy for their realtime compositing technology, a Lifetime Achievement Award from the Academy of Motion Picture Arts and Sciences, as well as an Oscar.

Ultimatte is known worldwide for delivering broadcast quality compositing results that make virtual sets indistinguishable from real sets. Ultimatte creates realtime blue and green screen removal hardware that is used in broadcast studios around the world to seamlessly composite reporters, talk show hosts and more into virtual sets. Almost every newscaster and weather reporter stands in front of a green or blue screen while delivering the news and weather. For the past 40 years, Ultimatte has been the industry standard hardware or software responsible for keying these people in front of weather maps, stock charts, and other info graphics. In fact, many of these newscasters are using Ultimatte to place them into completely virtual sets.
Ultimatte uses advanced 4:4:4:4 image processing and provides enhanced matte controls that lets customers accurately separate the subject from the background. Customers also get matte correction features, indirect and direct lighting features, spill suppression tools, edge artifact controls and more, all in realtime.
“Ultimatte’s realtime blue and green screen compositing solutions have been the standard for 40 years,” said Grant Petty, Blackmagic Design CEO. “Ultimatte has been used by virtually every major broadcast network in the world. We are thrilled to bring Ultimatte and Blackmagic Design together, and are excited about continuing to build innovative products for our customers!”

 

Media Tech Vendor M&A: Telestream Buys Vidcheck

Broadcast technology channel strategy, Broadcast Vendor M&A | Posted by Joe Zaller
Sep 05 2016

telestream-logo-transparant

Telestream announced that it has acquired Vidcheck, a provider of automated quality control (QC) solutions for broadcast and media technology applications.

Vidcheck_Logo

The deal, which was funded by cash from operations, has been completed. Terms were not disclosed.

Vidcheck founder Tom Dove will remain with the enlarged company.

The Vidcheck deal is Telestream’s sixth acquisition.  Similar to its recent purchases of cloud encoding company Panda, and captioning specialist CPC, Telestream CEO Dan Castles described the Vidcheck deal as a “tuck-in,” rather than a transformation. Although Telestream’s Vantage workflow orchestration platform currently includes an option called Analysis, the company believes that it can drive greater value for its customers by offering Vidcheck’s automated file-based QC software as part of its overall offering.

“Vidcheck’s team and product portfolio line up very well with our area of expertise,” said Castles. “It is not just some great technology and products that we are acquiring but also a gifted, talented and passionate team that will reinforce our resources here at Telestream. We look forward to leveraging our combined know-how to offer our worldwide customer base an even more complete and exciting product portfolio.”

Telestream says it will also continue to integrate and interoperate with multiple QC vendors, as it already does today.

 

© Devoncroft Partners 2009-2016. All Rights Reserved.

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Interested in Updated Market Sizing Data on the Media Technology Sector, Join us for a Webinar Tomorrow (8/31)

broadcast industry technology trends, broadcast industry trends, broadcast technology market research, market research | Posted by Josh Stinehour
Aug 30 2016

This Wednesday (August 31th) IABM DC is holding a brief webinar where Devoncroft’s Joe Zaller will review findings from the updated 2016 IABM DC Global Market Valuation Report (GMVR), the definitive reference on market sizing, segmentation, and forecasting for the broadcast and media technology sector.  IABM DC Logo and GMVR Cover Image

IABM DC is a 50/50 joint venture between Devoncroft Partners and IABM, the industry trade association that advocates on behalf of media technology suppliers worldwide.

In addition to a summary of key findings, the webinar will provide an overview of the vendor initiative supporting the GMVR, the technology segmentation underlying the report model, and the deliverables available for purchase.  For the 2016 edition the GMVR initiative continued to benefit from direct participation from a substantial number of vendors and service provider.  Partners to the report initiative provide data submissions (under strict confidentiality) on actual and project revenue.  This data is then anonymized and used to create the most comprehensive and authoritative reference on current and future market sizing for the sector.

The 2016 edition of the GMVR contains market sizing figures for historical years beginning in 2009 along with forward projections thru the 2019 calendar year.  A more detailed description of the GMVR is available from the report initiative website (www.iabmdc.com).

The webinar will begin at 8:00 am US PT (11:00am US ET / 5:00pm CET).  You can sign up for the webinar at the following website.  All interested parties are welcome to attend.

 

Should you have any detailed questions on the GMVR, please email us.

We hope you are able to join the webinar this Wednesday (8/31).

 

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© Devoncroft Partners 2009-2016. All Rights Reserved.

 

Autodesk M&E Declines 16% in Q2, Driven by Subscription Model Transition

Analysis, Broadcast technology vendor financials, Quarterly Results, SEC Filings | Posted by Joe Zaller
Aug 26 2016

Autodesk reported revenue for the second quarter of fiscal year 2017, which aligns with the three month period ending July 31, 2016.  Autodesk breaks out the revenue performance of its Media and Entertainment (M&E) business segment, which comprises visual effects and post-production solutions including Maya, Flame, and Shotgun.  Autodesk_Logo

Autodesk M&E revenue for the quarter was $34 million, a decrease of 16% compared to the second quarter of fiscal 2015, and a 2.9% decrease versus the preceding quarter, FQ1 2017.  M&E contributed 6.2% of Autodesk’s total sales in the quarter.  This compares to 6.7% during the year-earlier quarter and 6.8% during the preceding quarter.

There was no commentary provided by Autodesk’s management on the reason for the year-over-year decline, though Autodesk’s overall revenue decline was attributable to the Company’s transition from perpetual licenses to a subscription revenue model.

The close of the second quarter marked another milestone for Autodesk’s transition to a subscription business model, as the Company no longer sells perpetual licenses for its Suite products.  Autodesk discontinued selling perpetual licenses for individual products with the close of the fourth fiscal quarter of 2016.  Beginning with the start of the current quarter (FQ3 2017) Autodesk only sells subscription or flexible license offerings.

Update on Business Model Transition

Autodesk’s M&E division has been a public data point on the impact of pricing compression in the post-production technology segment of the media technology sector.  Revenue for the M&E division has been on a declining revenue trajectory for almost a decade given the impacts of the transition from hardware to software, the collapsing of functionality into Suites, and now the shift from perpetual licenses to subscription.

The below chart illustrates the revenue performance of the M&E division since the second half of fiscal 2008.

autodesk-chart

At the same time, the gross margin of the M&E division has benefited from these market trends.  Gross margins increased from 74.4% in the first quarter of fiscal 2008 to 80.0% during the first fiscal quarter of 2017.

The short-term implications of the business model transition is captured in the first paragraph of Autodesk’s prepared remarks for the quarter, “Autodesk is undergoing a business model transition in which it has discontinued most new perpetual license sales in favor of subscriptions and flexible license arrangements. During the transition, revenue, margins, EPS, deferred revenue, billings and cash flow from operations will be impacted as more revenue is recognized ratably rather than up front and as new product offerings generally have a lower initial purchase price.”

Related Content:

Press Release: Autodesk FY Q2 2017 Financial Results

Prepared Remarks: Autodesk management FY Q2 2017 Financial Results

Conference Call Transcript:  Autodesk FY Q2 2017

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