I had an interesting conversation recently with a broadcast technology vendor about how the transition to HDTV has impacted the move to IT-based broadcasting.
Their proposition was this:
Before the move to HDTV really took off, the broadcast industry was moving towards IT / file-based workflows. Then a variety of external structural forces (e.g. government intervention, analog switch-off etc) caused it to change course and focus on the transition to HD.
This caused the industry’s focus shifted away from IT / software-based systems and back towards hardware, which was better able to handle the increased data rates of HDTV. This was good news for traditional hardware vendors, many of whom saw big spikes in their businesses, and some of whom managed to go public on the back of this trend.
Fast forward to today. The transition to HD is well underway, and completed in many areas. Broadcasters who have made the move to HD are now are looking for ways to increase their efficiencies, and do more with less. At the same time, IT-based systems have made tremendous strides, and have in many cases caught up with hardware systems.
So, this vendor concluded, we’re at a major industry inflection point, and the next transition in the broadcast industry will be driven by software, not hardware.
If this vendor is right, (and they very well may be), it’s going to be an interesting time for the hardware-oriented vendors who don’t have fully-fledged IT-based solutions that deliver what today’s customers want — the ability to do more with less, the promise of greater efficiencies, and above all a way to increase revenues. It’s doubtful that “traditional” vendors will go away, but it’s likely that we will see new leaders emerge, along with an increase in M&A activity.