This article was originally written for and published by the IBC Daily News.
Much of the technology spending in the broadcast industry is project-based, and for the past several years the transition to HDTV operations has been one of the key drivers of large scale CapEx by broadcasters and other broadcast professionals in the EMEA region.
Our research shows that the transition to HDTV will continue to be the top driver of technology spending. But which product categories will be the beneficiaries of this spending, and just how long will the transition continue?
This article uses data from the 2010 Big Broadcast Survey (BBS), the broadcast industry’s largest ever and most comprehensive study of the broadcast industry, to help answer these questions. We’ll do this by looking at three key drivers of broadcast technology spending: the major planned projects in EMEA; the current and future technical make-up of the broadcast infrastructure in EMEA; and finally the projected HDTV upgrade cycles for a variety of product categories.
Major Planned Projects in Europe
In an industry where major projects drive technology spending, it’s important to understand what projects are being planned by broadcast professions.
The chart below, which provides a breakdown of the projects planned by more than 1,400 broadcast professionals from EMEA, shows that upgrading infrastructure for HD / 3Gbps operations is by far the most common project in the region.
It also shows that workflow / asset-management and archive-related projects will be deployed in EMEA, along with new studios and new channels (many of which will certainly be HD-capable).
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The Technical Make-up of EMEA’s Broadcast Infrastructure
But how much of the HD transition in EMEA has already been completed, and how long will move to HDTV operations continue to drive spending?
To find out we asked our research participants about the state of their broadcast infrastructure, and their plans to upgrade their equipment to HD. It turns out that not only is there still a considerable amount of HD upgrades to be done, but also that customers intend to carry on with these upgrades over the next several years.
While more than half of the broadcast infrastructure in EMEA is SDI, only about a quarter has been transitioned to HDTV operations. 3Gbps appears to have not yet been widely deployed in the region.
Interestingly, 19% of EMEA’s broadcast infrastructure is still analog. This begs the question of whether this infrastructure will be upgraded directly to HD, skipping out SDI all-together.
With such a considerable amount of analog and SDI infrastructure in the EMEA today, the transition to HDTV, and the CapEx required to make this happen, would appear to be far from over.
Indeed, when we asked respondents to project the technical make-up of their infrastructure in 2-3 years time, the picture was quite different. For example, respondents predicted that in 2-3 years the amount of analog infrastructure in EMEA would fall to just 7%, while the amount of HD infrastructure would jump considerably. This strong increase in HD infrastructure will come from the upgrading of current SDI plant, as well as migrating analog equipment directly to HDTV.
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HDTV Upgrade Plans in EMEA
So having established that the transition to HDTV operations will continue to drive CapEx for broadcast infrastructure, what equipment categories will see the benefit of this spending?
BBS respondents were asked detailed questions about both the current state of the plant infrastructure, as well as their plans between now and 2012 to upgrade a variety of individual products types to HDTV.
Overall about 20% of respondents have fully upgraded each product category to HDTV, with another 25-40% partially upgraded. This implies that there is still a considerable amount of HDTV upgrades to come in the coming years as analog and SDI plants, along with those that have partially moved to HD are converted to full HDTV operations.
Understanding how the factors discussed above drive CapEx should help industry participants to better plan their business strategies as we enter 2011. Tracking major projects is important because they are one of the industry’s most important drivers of technology CapEx, because projects drive capital budgets, which ultimately drive product purchase. When interpreting these findings, it’s important to note that these results look across a wide geographic region. Granular analysis of the information in this article is available from Devoncroft Partners.