Archive for January, 2010

Avid Posts Results for Quarter and Year Ended 12/31/09

Broadcast technology vendor financials, broadcast technology market research | Posted by Joe Zaller
Jan 28 2010

Today Avid announced its results for the quarter and year that ended December 31, 2009.

You can find Avid’s earnings press release here.

Here’s a quick recap of the release:

* Revenue for the quarter was $174.7m, 15% lower than the same quarter a year ago.

* The company reported a GAAP lost of$17.9m for the quarter.  This includes charges of $16.5m for a variety of items including stock, acquisition costs and restructuring.

* Product revenue in the quarter declined 19% y/y, while services revenue increased slightly.

* Revenue from video in the quarter declined 21%, and revenue from audio declined 5% versus the same period in 2008.

* R&D and marketing & selling expenses were lower in the quarter versus a year ago, while G&A increased by about $1m.

* Revenue for the year was $629m, 26% lower than revenue for 2008.

* Product revenue in 2009 decreased 29% versus 2008; and services revenue in 2009 declined 8% versus 2008

* Video revenue for the 2009 declined 32% versus 2008; and audio revenue for 2009 declined by 13% versus 2008.

* The company reported a GAAP loss of $68.4m for the year, which includes $55.7m of charges.

The earnings release quotes Avid CEO Gary Greenfield as saying: “Avid has made good progress this quarter. Our revenues were up sequentially and we believe our markets are stabilizing with some signs of recovery.  We reported a non-GAAP operating profit for the quarter and with the majority of our cost structure transformation complete we feel we are well positioned for margin expansion.”

This echoes the remarks made by Harris CEO Howard Lance during the announcement of their results.  Lance said: “The sequential flattening of revenue and the rebound in orders in this still very tough market environment were both encouraging and are hopefully signs that we are in fact beginning to see a recovery in the global broadcast markets. As the economy improves and advertising revenues begin to improve, we should see some acceleration in capital spending by global broadcast and media networks.”

Everyone is glad to put 2009 behind them and is looking forward to better things in 2010.

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Harris Corporation Posts Results for Q2 of FY10

Broadcast technology vendor financials, broadcast industry technology trends | Posted by Joe Zaller
Jan 28 2010

Last night Harris Corp reported its Q2 results for FY10. 

Although Harris is considered by most to be a defence company this post looks only at the performance of the company’s Broadcast Communications division.

For those who would like to see information about how the entire Harris business performed, here is a link to the company’s earnings press release.

Here are the highlights of the broadcast communications division for Q2 FY10:

* Broadcast orders orders were $139m, a 12% increase over the previous quarter

* Broadcast revenue was $116.8m, a 2% decrease versus the previous quarter, and a 28% decrease versus the same quarter last year.  For the first six months of the FY, Harris broadcast comms revenue was $235.5m, versus $321.2 for the first two quarters of the previous year (a 27% decrease).  

* The broadcast comms business reported a $4.8m operating loss for the quarter, versus an operating profit of $12m a year ago. For the first six months of the FY, the Harris broadcast communications division has made an operating loss of $4.5m versus a profit of $17.3m for the first two quarters last year.

On the earnings conference call, Harris CEO Howard Lance said the following about the Broadcast Communications division:

“The sequential flattening of revenue and the rebound in orders in this still very tough market environment were both encouraging and are hopefully signs that we are in fact beginning to see a recovery in the global broadcast markets. As the economy improves and advertising revenues begin to improve, we should see some acceleration in capital spending by global broadcast and media networks.

“Operating performance was impacted by product mix, combined with our increasing investments in new media initiatives, including markets such as mobile TV and digital signage, and higher investments in international markets. These are all areas we believe critical to the future success of this business. We were encouraged by several new wins in the quarter and other initiatives that are underway.”

Interestingly, Lance also again mentioned the company’s VAME (Full-Motion Video Asset Management Engine) initiative, which apparently uses number of broadcast products and technologies to enable government customers capture, store, retrieve, analyze and distribute video intelligence information.  Lance says that Harris now has a VAME opportunity pipeline totaling $250 million.

In summing up the outlook for the broadcast business, Lance said that the q/q ”flattening of revenue and the rebound in orders in this still very tough market environment were both encouraging and are hopefully signs that we are in fact beginning to see a recovery in the global broadcast markets. As the economy improves and advertising revenues begin to improve, we should see some acceleration in capital spending by global broadcast and media networks.”

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Impressions of CES 2010 — 3D and ATSC Mobile DTV

broadcast industry technology trends, content delivery, technology trends | Posted by Joe Zaller
Jan 12 2010

Last week I made my annual winter pilgrimage to Las Vegas for the 2010 CES exhibition.

Walking the crowded show floor was like being inside of a giant Best Buy with 100,000+ other people. 

I spent most of my time at CES at the conference, and I have mixed feelings about the sessions I attended. While there were some quite good panels — particularly in the USC Emerging Tech and the excellent Arlen / Greenwald “UpNext” tracks — I found many of the sessions to be disappointing. Many sessions were long on commercial plugs and short on new information.  I also found the multiple concurrent sessions difficult to navigate, something that was not helped by CEA’s show guide / conference program, which was poorly laid out and confusing.

As most know by now, the big topics at CES were 3D, think TVs, mobile broadcasting and making money (or  not) from online content.

3D was everywhere at the show, and there have been countless reports of how many companies are betting their future on 3D.   In many of conference sessions, panelists expressed optimism for 3D — tech vendors talked about how they will have the products available, while broadcasters & content owners talked about the amount of 3D content they are going to produce / broadcast.  Personally I am skeptical about near-term consumer take-up of 3D.  Consumers who have recently upgraded to HD are unlikely to re-up for 3D any time soon, and even my early-adopter friends have said they are unlikely to put on 3D glasses to watch sports or movies.  Time will tell, and I am sure we will all be hearing much about 3D between now and the NAB show in April.

Other than they hype surrounding 3D the most interesting aspect of CES for me was a small group of booths that were showing off ATSC mobile DTV broadcasting.  US broadcasters are serious about mobile, and they were there in force along with some well established (Harris, LG) and new technology vendors.  According to several of the broadcasters and exhibitors I spoke with, there are already 30 broadcasters on the air with mobile ATSC DTV. 

More significantly according to these sources however, is that there are 200+ more local broadcasters who are planning to launch a mobile service in the near future.  These broadcasters have already spent a significant amount of money to convert to DTV, and the incremental cost to also broadcast to mobile is very small (the maximum number I heard was $150,000, with many broadcasters saying they could do it for much less).

This low cost of entry, combined with a potential of new revenue as well as the political controversy about use of spectrum is sure to make ATSC mobile DTV one of the major topics at NAB this year.  Whereas 3D is a future possibility for broadcasters, it seems to me that ATSC mobile DTV is going to happen in the near term. Broadcasters such as Sinclair, ION and others are absolutely committed to the technology, and there are many vendors on board — with more undoubtedly to follow — despite the fact that there are very few receivers and even fewer viewers at this time. 

It remains to be seen whether ATSC mobile DTV can be developed into a viable commercial offering, but this will not stop a great deal of hardware and software being sold to US broadcasters.  The barriers to entry are low (in terms of incremental cost), and the potential political victory with regard to spectrum, not to mention a new potential revenue stream practically guarantees that ATSC mobile DTV  will be coming soon to a local broadcaster near you.

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Back Online After the Holidays

broadcast technology market research | Posted by Joe Zaller
Jan 11 2010

I decided to take it easy over the holidays, so I have not been posting for a while; but I am now back online and will resume posting.

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