For the most part, large scale broadcast industry CapEx tends to be project-based. Our most recent research into where money is being spent in the broadcast industry shows that the top two projects globally are “upgrading infrastructure for HD / 3Gbps operations” and “upgrading transmission and distribution capabilities,” both of which are undoubtedly influenced by the move to HDTV.
As broadcasters migrate to HDTV operations much of the industry’s infrastructure is being replaced, making the move to HDTV a strong driver of broadcast industry CapEx.
At a time when we are now several years into the HD transition, what continues to drive broadcasters to move to HDTV operations? Are broadcasters moving to HD to for engineering reasons (e.g. delivering better image quality to viewers), or for commercial reasons (e.g. to remain competitive in the marketplace)?
As part of the 2010 Big Broadcast Survey, we asked a global sample of more than 5,600 broadcast professionals about the most important trends in the broadcast industry. Respondents were presented with a series of industry trends, and asked to indicate which one was the most commercially important to their business over the next few years.
In order to better understand the drivers behind each trend, respondents were then asked a series of questions about the one industry trend that they indicated was most commercially important to their business – e.g. respondents who indicated that the transition to HDTV operations was the trend most important to their business were asked why this is the case.
The results are shown in the chart below:
Q. Why the transition to HDTV operations the most important to your business?
On a global basis the most important overall driver for the move to HD is simply completing the job. In many parts of the world, broadcast professionals are now in the middle of multi-year complex HD migration projects, so this should not be too surprising.
The second and third ranking factors cited by respondents as drivers for their transition to HDTV were delivering improved picture quality to viewers and the competitive demands of the market. More engineering-oriented drivers such as taking a technology lead and future-proofing operations were seen by most respondents as much less important.
Like all data of this type, there are of course variations based on respondent demographics. For example:
- the competitive demands of the market were ranked as the most important HD driver for US broadcasters, while state funded broadcasters as well as those in Asia ranked completing the job as the their top driver
- respondents from Australia, MEA and the UK cited more technology-oriented drivers (taking a technological lead in the market and future-proofing operations) than those from other areas where HD is perhaps more mature
- broadcasters who derive most of their income from subscription revenues cited competitive demands of the market as their top driver for migrating to HD, while both commercial and state funded broadcasters said that completing the job was most important to them
Despite these differences, it’s clear that the key drivers for the move to HDTV are commercially oriented. In today’s environment, the broadcast procurement process is usually based on carefully considered commercial factors, and often as part of a major planned project.
As written previously, our research shows that the top priorities for the broadcast industry in 2010 include completing the transition to HD, achieving cost savings through operational efficiencies, and generating new revenue streams. These projects all have a strong commercial justification, and will continue to drive a large share of the industry’s CapEx.
Interestingly, these results highlight why the buzz about some new technologies such as 3D has faded over time as potential buyers begin to appreciate the commercial issues associated with their deployment. Indeed, many of those who commented on industry trends at the IBC 2010 exhibition commented that the market has become more realistic about 3D.
This article is based on the findings from the 2010 Big Broadcast Survey (BBS), a global study of industry trends, technology purchasing behavior and the opinion of vendor brands. With more than 5,600 people in 120+ countries participating, the 2010 version of the BBS is the largest and most comprehensive market study ever done in the broadcast industry.