Archive for October, 2009

Miranda Posts Q3 2009 Results

Broadcast technology vendor financials, broadcast industry technology trends, broadcast technology market research | Posted by Joe Zaller
Oct 30 2009

Miranda announced their results for Q3 today.

 The press release is here, and here is an article from Reuters

To hear a replay of the conference, dial +1-877-289-8525 and enter code 4169895#

  

 Here are a few highlights:

* Sales for the quarter were C$31.8m, which represents a 2% increase versus last quarter and 16% decrease versus the same quarter last year

 * Net income of  C$1.1m, which is an 86% decrease compared to the same period last year

 * Grass Valley manufacturing (Nvision products) is moving to Montreal, but certain specialist functions (assembly, test order fulfillment and new product introduction) will remain in Grass Valley

 * The addition of the Nvision product line has helped the company win more business, both stand-alone router product deals and multi-product sales

 * There continues to be strong price pressure in the market

 * The company said that they are seeing build-up in their sales pipeline, particularly in the international market, and that the US market is still challenging. 

 * Company expects 2010 to be better than 2009

 * When asked by an analyst about a supplier who is anticipating 8% growth to return to their business, Miranda said they would agree that the overall market will return to 5-10% annual growth and that Miranda  will likely grow faster than the market

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Harmonic Posts Q3 2009 Results

Broadcast technology vendor financials, broadcast technology market research | Posted by Joe Zaller
Oct 28 2009

Earlier today Harmonic announced its preliminary and unaudited results for the company’s fiscal Q3 (quarter ended October 2, 2009). 

You can read the press release here, and here is an article from Reuters and another from the AP about HLIT’s numbers.

You can hear a replay of the conference call here, or by dialing +1.706.645.9291 and enter ID# 32354964

Sales for the quarter were $83.9m, an increase of 3% versus the previous quarter and a decrease of 8% versus the same quarter last year.

For the first nine months of their fiscal year, the company’s sales were $232.9m, a 13% decrease versus sales of $268.1m during the first nine months of last year.

International revenue was 52% of sales, which represents a q/q and y/y increase as was mentioned in both the press release and earnings conference call.  The company says it did well in Europe as well as in emerging markets such as China and India.

  Q309 Q308 Q209
Revenue $83.9m $91.5m $81.3m
Current qtr % change vs. previous qtrs  – -8% +3%
Int. Revenue $43.6m $35.69m $34.96m
Int. Sales % 52% 39% 43%

 

Here are a few highlights from the earnings conference call:

 

* Revenue from software and services was up vs. 2008

 * Lower capital spending by customers around the world

 * Increase in international customers, especially in Europe

 * Successes in China and India

 * The company’s top 10 customers accounted for less than 50% of revenue during the quarter

 * The largest customer was Comcast who represented 15% of revenue

 *DISH represented 10% of revenue

 * Segment Revenue Breakdown:

            Cable 56%  

            Satellite 21% 

            Telco other 23%

 * Product revenue Breakdown

            Edge and access 39%

            Processing %39

            Services and other 22%

 * Lower gross margins due to a variety of factors including product mix and supply chain

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Harris Posts FY2010 Q1 Results

Broadcast technology vendor financials, broadcast technology market research | Posted by Joe Zaller
Oct 27 2009

Harris Corp posted their Q1 2010 results today.

While the company reported strong results overall, revenue from the broadcast division declined on both a quarterly and annual basis. 

The Harris broadcast division earned an operating profit of $300k on revenue of $119m, versus $130m in Q4 of FY09 (-8%) and $158m one year ago (-25%).

On the analyst conference call Harris CEO Howard Lance said:

* The first fiscal quarter is normally the lowest for HRS broadcast division

* The positive profitability of the broadcast division was achieved on substantially lower revenue than the prior year first quarter, primarily as the result of significant cost reduction actions taken in FY2009

* The business has “bottomed out from the perspective of quarterly revenue and income and we don’t expect to see results decline any further going foreword, however we are cautious regarding the recovery timetable since so much hinges on a rebound in advertising revenue and the subsequent resumption in capital spending by our broadcast and media customers.”

 

The earnings press release can be found here.

To save you the time, here’s the relevant text from the press release

Broadcast Communications

First quarter orders in the Broadcast Communications segment were $124 million and were greater than revenue and about even with orders in the fourth quarter of the prior year. First quarter revenue in the segment was $119 million, compared with $130 million in the prior-year fourth quarter and $158 million in the prior-year first quarter. Continued weakness in the first quarter was expected and reflects the global economy and delayed capital spending by broadcast and media customers, as well as seasonally slow spending, primarily in Europe and the Middle East.

Operating income in the first quarter of fiscal 2010 was $.3 million and was achieved on substantially lower revenue as a result of significant cost-reduction actions implemented during fiscal 2009.

Key program wins in the quarter included transmitters for the rollout of DTV networks in Rwanda and Mexico; complete Harris ONE(TM) solutions for Meredith Corporation’s central-casting hub in Phoenix and the Home Shopping Channel in South Korea; and multiple orders for China Central Television (CCTV).

Also during the quarter, Harris was awarded a contract from Lockheed Martin to provide systems for the U.S. Joint Forces Command, which will use highly advanced broadcast technologies to help collect, manage,  process, exploit and disseminate full-motion video. The system provides increased visibility into the vast amounts of real-time and archived video that is collected from manned and unmanned aircraft and ground-based sensors. The Harris system incorporates its proprietary FAME(TM) (Full-Motion Video Asset Management Engine) technology, which has broad applications in government and commercial markets

 

You can listen to a replay of the conference call here – the comments about the broadcast division can be found at around 15:20.  Please note that there is very little discussion of the broadcast business on this call as most talk is about tactical radios for military applications.

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How Broadcasters of Different Sizes Rank Reliability of Broadcast Technology Vendors

Broadcast Vendor Brand Research, Top Broadcast Vendor Brands, broadcast technology market research | Posted by Joe Zaller
Oct 26 2009

Ordinarily when I write about how broadcast technology vendors were ranked in the 2009 Big Broadcast Survey (BBS),* I show the opinions of the all 4,000+ of BBS respondents, broken down globally and regionally in order to highlight geographic variation in opinions.

A few weeks ago I did something different and posted an article about how one type of customer– broadcasters – ranked broadcast technology vendors in one category – innovation.  I received strong feedback about this post and many people asked me to show other data broken down this way.  I’m happy to oblige and I’ll be doing this over the next couple of posts.

Today I am going to look at how broadcasters of different sizes ranked broadcast technology vendors on reliability.  For information about how these results were collected, please see the bottom of this post**.

The table below shows the top 5 brands in the broadcast technology vendor league table for reliability, as ranked by broadcasters, broken down by organization size.  For the sake of comparison, I have also provided the global ranking (responses of all 4,000+ respondents from all organization types).

Please note that in all cases, these brands are shown in alphabetical order, NOT in the order of their ranking in the study

  

Question: How would you rate [Brand X] on the following attribute [Reliability] where 1 = very poor and 10 = best in the market? 

 

 Reliability by broadcaster by org size

 

 

 

 

 

As with the previously published results for innovation, these results are interesting because of the variation of what brands appear where.  Here are a few quick observations these results:

* There are total of 9 vendors on this list, versus a total of 11 on the previously published for innovation.  Thus it appears that there is slightly more agreement among broadcasters for reliability than innovation.

* Apart from Sony and EVS, here is the breakdown of how often other vendors made the top five, including the global sample, (in alphabetical order): Axon (2), Evertz (2), Harris (3), Miranda (1), Omneon (2), Snell & Wilcox (4), Thomson / Grass Valley (4)

 * There is interesting variation between the global ranking and the broadcaster rankings.  For example, Evertz is not listed in the top 5 for reliability for the global sample, but does make the top five reliability list for all broadcasters.  Harris conversely makes to top 5 list for the global sample, but not the overall broadcaster list (however it does appear in two of the organization size breakdowns).

* Harris and Thomson / Grass Valley each make the top 5 list for the smallest (51-100 employees) and largest (1,001-10,000 employees) broadcasters, but both are absent in the top 5 list of mid-sized broadcasters (101 – 1,000 employees). 

* The opposite is true for Axon and Omneon.  Neither company made the top 5 reliability list for the for the smallest and largest broadcasters, but they do appear in the top 5 reliability lists for broadcasters with 101-500 and 501-1,000 employees).

* Snell & Wilcox makes the top reliability 5 lists for larger broadcasters (501-10,000 employees), but is absent from the lists of small and mid-size broadcasters (50 – 500 employees).

* Miranda and Evertz, two direct competitors, appear in different places in the size breakdown, with Miranda appearing in the top 5 for broadcasters with 51-100 employees and Evertz making the list for broadcasters with 101-500 employees (Evertz made the overall top 5 list, Miranda did not).

 

 

 

 

* The annual Big Broadcast Survey (BBS) is the largest ever and most comprehensive studies of broadcast technology vendor brands and industry trends.  The BBS provides insight into market trends and the perceptions of leading broadcast industry vendor brands by practitioners across the world.  It also delivers vendor brand ranking in a variety of product categories; all of which can be segmented by geography and customer type.

 ** Respondents to the BBS were asked to rank their opinion of twenty-five broadcast technology vendor brands in a variety of categories including awareness; overall opinion; change of opinion; recommendation; and a variety of brand attributes and brand drivers such as innovation, reliability, quality and great customer service.  The responses were then aggregated into a series of industry “league tables” that rank each broadcast technology vendor brand against the metrics mentioned above.

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Purchase Preferences of Broadcasters, Broken Down by Geography and Organization Size

Broadcast technology channel strategy, broadcast industry technology trends, broadcast technology market research | Posted by Joe Zaller
Oct 22 2009

In a previous post I wrote about the IABM’s US market workshops, which I attended last week in San Francisco and New York. During my presentations about the 2009 Big Broadcast Survey, a few people asked for clarification on some data and/or for a cut of the data that is different than what I was showing at the time.

When I got back from the meetings, I extracted this additional information and sent it to the relevant parties. I figured that others might be interested to see this as well, so here it is.

One question was about whether there is significant regional variation in the preference for broadcasters to purchase from a single vendor versus a range of “best-of-breed” suppliers.  A follow-on question was whether there was variation in purchasing preference based on the size of the broadcaster.

My original post on this topic showed that there is a strong preference for buyers to evaluate multiple vendors and select a best of breed solution. You can read this post here: Do broadcast technology buyers prefer to purchase from a single supplier or from “best-of-breed”?

Here’s the chart from this post, which shows that the majority of buyers, regardless of their type, prefer to  evaluate multiple vendors and purchase best-of-breed solutions.

 Q: When purchasing broadcast technology products, do you prefer to buy from a single “one-stop-shop” or select “best-of-breed” solutions from multiple vendors?

Best of breed preferred purchase method

 

The above chart looks at the total market on a global basis, and does not break out the responses for each customer type geographically. 

 I thought it would be interesting to do this for broadcasters, and the results are shown in the chart below, which compares the response of the overall global sample (called “everyone” here), with the responses of all broadcasters and then regional broadcasters — there is some regional variation.

 

Broadcasters -- Best of breed preferred purchase method

The chart above shows that broadcasters have a strong preference to purchase “best-of-breed” solutions, but there are some variations.  Broadcasters in the Americas show a higher preference towards a single supplier versus the average of all broadcasters, while Asian broadcasters show a higher preference towards best-of-breed versus the average.

The next question takes it one level further, and asks whether these preferences hold true for broadcasters of all sizes — i.e. how do broadcasters of different sizes prefer to purchase broadcast technology products and services?  To find out I did another cut of the broadcaster data from the chart above.  In this case I did not look at geography, but at the size of the broadcaster.

The results are shown in the table below:

Broadcasters By Size -- Best of breed preferred purchase method

 

As you can see, the results are fairly consistent, and once again there is an overwhelming preference is to evaluate multiple vendors and choose best of breed solutions. 

You’ll note that there is an extra bar on this chart — the one for US Network Broadcasters.  As an interesting point of comparison,  I have also included these results since I happened to have collected this data during the research.  US networks are some of the industry’s largest customers and they are usually in the largest cities (such as New York) where many vendors have sales offices.  US broadcast networks show the strongest preference towards buying from a single supplier when compared other broadcasters — more than double other large (1000+ employee) broadcasters.

If you’re a broadcast technology vendor, is this consistent with your experience?  Please let me know.

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The IABM’s US Member Days, and New IABM / Screen Digest Global Market Study

broadcast industry technology trends, broadcast technology market research, market research | Posted by Joe Zaller
Oct 20 2009

Last week I attended the IABM’s US member meetings in both San Francisco and New York.  The meetings had pretty good attendance and were very informative.

I was there to present information about my current market research findings as part of my partnership agreement with the IABM, but the highlight of the meeting was Graham Sharp’s overview of the new IABM / Screen Digest global market study.

Over the years, I have bought just about every broadcast technology market report, and in my view the IABM / Screen Digest report is the best source for broadcast industry data on market size, growth and share. This report is ordinarily published every other year (this not being one of them), but due to the economic conditions there was significant demand for an updated report this year.  The IABM obliged, with an informative report that is priced 50% lower than the full bi-annual report.

You can find information about the new report here.  In the meanwhile, here are some of the high level findings that were presented at the meeting.

This study has very up-to-date information.  It takes into account actual results of vendors through June 2009 and adds projections through the end of 2009.  It then provides an overall market forecast through to 2012

At a high level, the study found that the overall broadcast technology market declined 9.5% in 2009.  This number was the subject of much discussion among member companies, especially in light of the following table, which shows a breakdown of how vendors reported / forecast their revenues for 2009:

 

Broadcast Technology Vendor Revenues in 2009:

Revenue Growth 0-10% revenue decline 10-15% revenue decline 15-20% revenue decline 20%+ revenue decline

2.8%

1.4%

27.9%

54%

13.9%
Source: IABM/Screen Digest 2009

Clearly there is some discrepancy between the numbers in the above chart and the overall 9.5% decline for the total market.   Vendors at the meeting wanted to know how it’s possible that this report shows a (mere) 9.5% drop in the overall market when so many companies have seen such significant revenue drops (as shown in the table above)?

Indeed there is much anecdotal evidence that the broadcast technology market is down much more than 9.5% for 2009.  As I posted previously, during IBC 2009, many vendors told me that their revenues were down by 20-40%.  However I also found some bright spots at IBC – particularly in those areas that have to do with making broadcasters more efficient and saving them money – e.g. automation, workflow optimization, asset management, business systems etc.  Perhaps growth in these areas has made up for some of the losses in others.

For its part, the IABM and Screen Digest are standing behind the projections, and say that that the following needs to be taken into account when looking at these numbers:

  • Sources of income to customers (advertising, license fees, subscriptions)
  • Product revenue vs. service revenue and the trend towards outsourcing
  • Regional differences
  • ForX rates, which have been extremely volatile the past few years
  • Dynamics in individual market segments and product categories

 

Here are some other interesting things / highlights of this report:

  • The total market size is pegged at $25BN, with $16BN (63%) coming from product revenue, and $9BN (37%) coming from service revenue.  Service revenue includes Rental/hire, transmission, managed services, systems integration, support contracts and consultancy.
  • This means that service providers such as playout centers and others are counted as part of the market size.  This is consistent with previous IABM reports, but perhaps not with the way most vendors count their revenues.  Indeed, to a typical vendor a playout / service provider is a customer.
  • Service revenues in Europe are now higher than product revenues, and (IMO) will likely continue to increase worldwide as broadcasters move to more outsourcing in order to shift cost from Capex to Opex.
  • By 2012, the market size will be back to where it was at its peak in 2008

 

When all of this is explained (which takes a while), you can understand how Screen Digest arrived at these numbers, but this does not mean that all the vendors at the meetings agreed with them.  What this highlights is that the industry is changing.  I’ve made several posts about this including my Impressions of IBC 2009 and Silverwood Partners’ Take on IBC 2009.  This reports is also consistent with a question I posed in the post HDTV… just a “pause” on the path to transition to IT-based broadcasting? which said that the transit ion to HD (much of which had to be done with hardware), put back the move to IT-based broadcasting by about five years.  During the biggest years of the HD transition, many vendors grew very rapidly, including a few that went public.  Today, the transition to HD is well underway, and the focus of the customers is all about efficiency.   So it makes me wonder whether when the recovery does happen, who will reap the biggest benefit — the traditional hardware vendors, or providers of efficient IT-based systems.  I think we will see some new players emerge, while some established players continue to struggle.

All-in-all the new IABM/Screen Digest report looks well worth considering if you are involved in the financial or supply side of the broadcast technology industry.  You can get more info on this report here.

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How Broadcasters of Different Sizes Rank Innovation of Broadcast Technology Vendors

Broadcast Vendor Brand Research, Top Broadcast Vendor Brands, broadcast technology market research | Posted by Joe Zaller
Oct 08 2009

I have recently been writing about how various broadcast technology vendor brands were ranked in the 2009 Big Broadcast Survey  (BBS)* on measures such as innovation, customer service, reliability and overall opinion.

For the most part, when I have discussed these results in previous posts I show the opinions of the all 4,000+ of BBS respondents, broken down globally and regionally in order to highlight geographic variation in opinions.

Of course this global list includes a wide variety of customer types such as broadcasters, systems integrators, cable/satellite/IPTV operators, government etc.  As a result, one of the questions I am frequently asked is how a particular brand was ranked by a single customer type (e.g. broadcaster) or buying group (e.g. multiviewer buyers).

To address this question I decided to look at how one customer type – broadcasters – ranked broadcast technology vendors in one category – innovation.

Rather than showing a breakdown by geography, I thought it would be more interesting to show variation by organization size rather then geography.

For information about how these results were collected, please see the bottom of this post**.

The table below shows the top 5 brands in the broadcast technology vendor league table for innovation, as ranked by broadcasters, broken down by organization size.  For the sake of comparison, I have also provided the global ranking (responses of all 4,000+ respondents from all organization types).

Please note that in all cases, these brands are shown in alphabetical order, NOT in the order of their ranking in the study

  

Question: How would you rate [Brand X] on the following attribute [Innovation] where 1 = very poor and 10 = best in the market?

  Innovation -- by Broadcasters by Org Size

 To me, these results are pretty interesting for a number of reasons.  Here are a few quick observations about them:

 

* There are total of 11 vendors on this list, and an interesting distribution of vendors

 

* Sony is the only broadcast technology vendor that ranked in the top 5 in all categories 

 

* Apart from Sony, the breakdown of how often other vendors made the top five, including the global sample,  (in alphabetical order) looks like this: Axon (1), Evertz (3), EVS (3), Miranda (2), Omneon (1), Quantel (1), Snell & Wilcox (4), Thomson / Grass Valley (3), Utah Scientific (1)

 

* Two of the companies that appear in the table above just once (Axon and Quantel) are seen as top five innovators by the largest broadcasters (those with 1,000+ employees)

 

* Two of the companies that appear in the table above just once (Network and Utah Scientific) are seen as top five innovators by the mid-sized broadcasters (those with 101-500 employees)

 

* There is an interesting distribution of vendors that were ranked as top 5 innovators by all broadcasters.  For example both Evertz and Miranda are ranked in the top 5 overall by broadcasters.  However when you look at broadcasters by organization size, Evertz appears in the 501-100 employee category, while Miranda is found in the 501-1000 employee category.

 

So does size matter?  Larger broadcasters probably have significantly greater buying power than their smaller counterparts and a couple of contracts with a large broadcaster can be enormously valuable to a vendor.  Having said that, very large broadcasters are few and far between.  The bulk of broadcasters probably falls into the middle of the size range in terms of employees, and some very successful broadcast technology vendors (in terms of recent revenue growth) such as Evertz, Miranda and Omneon are best regarded by these mid-sized customers, while smaller vendors like Axon and Snell & Wilcox are highly regarded by the largest customers.    Nevertheless it is important for vendors to understand how opinions about them vary among customers of different sizes as they plan their sales strategies.

 

  

 

* The annual Big Broadcast Survey (BBS) is the largest ever and most comprehensive studies of broadcast technology vendor brands and industry trends.  The BBS provides insight into market trends and the perceptions of leading broadcast industry vendor brands by practitioners across the world.  It also delivers vendor brand ranking in a variety of product categories; all of which can be segmented by geography and customer type.

 ** Respondents to the BBS were asked to rank their opinion of twenty-five broadcast technology vendor brands in a variety of categories including awareness; overall opinion; change of opinion; recommendation; and a variety of brand attributes and brand drivers such as innovation, reliability, quality and great customer service.  The responses were then aggregated into a series of industry “league tables” that rank each broadcast technology vendor brand against the metrics mentioned above.

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The Business Insider names Dolby Labs as one of 12 “Juicy Buyout Candidates”

Broadcast Vendor Brand Research | Posted by Joe Zaller
Oct 05 2009

Financial website The Business Insider published an article today called “Check out these 12 Juicy Buyout Candidates.”

One of the companies on the list is broadcast industry leader Dolby Labs.

Here’s a link to the Dolby piece, which shows the Business Insider’s rationale.  For convenience, I have also pasted the text below:

 

“Dolby has been blowing our minds since 1965 and is one of the best known brands for sound technology.

While the economic downturn may have stagnated the company’s earnings growth, this brand isn’t going anywhere because it is:

A) Extremely well established as a leader.

B) Essentially debt free.

C) Sitting on half a billion dollars of cash.

D) Highly cash-generative and profitable with near-50% operating margins.

These days, when growing a new line of business is harder than ever, Dolby presents an interesting alternative for an electronics company looking to put money to work.

Thing is, would Ray Dolby ever sell his controlling stake? Maybe for the right price.”

 

There’s no doubt that Dolby is a successful company with a great business model.  My view is that Dolby is an established leader with a great passion for their business and for success.  While I don’t have any inside knowledge about what the company is planning, I do know that they have established a team of very smart people who know the professional audio and video space better than most. 

Dolby is one of those companies about which video people often say “someone has to be the Dolby of video.”  My view is that with their industry knowledge, brand, brainpower and of course cash, it wouldn’t surprise me if it was Dolby who emerges as “the Dolby of video.”

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Evertz Named to Deloitte’s “Technology Fast 50″ Companies in Canada

Broadcast Vendor Brand Research, Top Broadcast Vendor Brands, broadcast technology market research | Posted by Joe Zaller
Oct 05 2009

Deloitte Canada recently announced its annual “Fast 50 Technology Companies,” which it calls “the country’s pre-eminent leading technology awards.”  According to Deloitte, these awards ”rank companies based on their past five-year revenue growth rates.”  Broadcast technology vendor Evertz Microsystems once again made the list, and was also singled out for a Leadership Award.

Evertz ranked #47 on the list with a 5 year growth rate of a very impressive 318%, but in my view, the Leadership Award from Deloitte is more significant. 

Here’s how Deloitte Canada describe these awards:  “Leadership Awards single out companies that are the elite members of the Canadian technology industry, whose ability to create a distinct competitive advantage in a high-growth market allows them to dominate their sector and quickly join the ranks of other Canadian global leaders.”   To give you an idea of what they mean, this leadership award puts Evertz in the same category as leading smartphone vendor Research in Motion — not a bad result. 

Here’s a link to the Deloitte announcement

There’s no doubt that Evertz has become a significant player in the broadcast technology space.  My research shows that Evertz has a strong brand in the broadcast technology industry, although it’s very clear that the company’s brand is stronger in the Americas than in the rest of the world.  Nevertheless, the company’s “international” sales (which Evertz describes as outside of the US and Canada) continue to grow.  It will be interesting to see how the company is ranked when my next round of research is published.

In the 2009 Big Broadcast Survey, Evertz placed in the top 5, on either a global or regional basis, in the following categories:

* Net Change in Brand Image

* Overall Opinion

* Great Customer Service

* Innovation

* Reliability

 

This is also not a bad result for Evertz.

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