Archive for March, 2011

NAB 2011 And The Investment Banker’s View of the Broadcast Technology Industry

broadcast industry technology trends, broadcast industry trends, Broadcast technology channel strategy, broadcast technology market research, Broadcast technology vendor financials, Broadcast Vendor M&A, market research | Posted by Joe Zaller
Mar 29 2011

The 2011 NAB show is less than two weeks away and there appears to be a feeling of optimism in the industry, something that has been lacking for the past year or two.  The economy is seemingly healthier, the financial performance of both broadcasters and technology vendors has improved, and digital media is a hot topic across many industries as companies roll out plans to bring video and audio content to a growing number of platforms and devices. 

The pre-NAB period is typically when expectations are set for the year, as both customers and vendors reveal their respective buying and selling plans. So far there have been year there have been some interesting articles written about what customers are shopping for at the show, what new technologies are on display and of course the most important trends in the broadcast industry in 2011.  

But there’s another group of industry observers who also have an interesting view on the outlook for the broadcast industry – investment bankers and private equity firms – and this year there appears to be more interest than usual from these players.

So what do investment bankers think about the broadcast industry, and what are their objectives for the NAB show?  In a word: deals. 

At this year’s NAB show, bankers and PE players should have plenty to keep them busy.

Video and audio technologies have become strategic to many companies outside of the traditional broadcast business, so bankers will use the NAB show as a way to find companies that might add value to a larger enterprise or a portfolio of companies.

Within the traditional broadcast industry, the improving economy has increased speculation about broadcast vendor M&A and consolidation.

Indeed, as shown below, our most recent research of senior executives at broadcast technology vendors reveals that while about a third of companies intend to retain their private status, many others expect to be involved in some sort of strategic transaction within the next 2-3 years. 

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Recently Covington Associates and Silverwood Partners, two investment banks that focus on the broadcast and digital media industries, published pre-NAB “teaser” documents for their clients and prospects.

Covington’s pre-NAB market analysis provides a concise overview of macro drivers in the industry and highlights recent digital media M&A activity.  This is (as far as I know) the first time that Covington has published a pre-NAB industry analysis, presumably driven their recently enlarged digital media team, which marries former industry executives and investment banking expertise.

Silverwood has been consistency active in the broadcast industry for the past decade, and typically publishes a report before and after major industry trade shows. You can read their pre-NAB 2010 document here, their pre-IBC2010 document here, and their IBC 2010 Post-Show Perspectives here. 

Silverwood’s 39-page pre-NAB 2011 document takes an in-depth approach.  It covers trends in the digital media industry, recent financial performance by vendors, macro industry drivers, the accelerated pace of change in the broadcast technology space, the “3D hype cycle,” and the way customers are changing their commercial focus and broadcast technology procurement plans as their revenue models shift towards “new media.”

Silverwood ends their deck with an interesting section on broadcast industry IPO, PE and M&A transactions, and why company valuations may differ, based on a number of factors. In doing they are seeking to balance creating excitement about M&A, and setting realistic expectations about valuations.

Overall both are worth reading, regardless of whether you are a vendor, broadcaster, or independent industry observer.  They provide a perspective that is sometimes missing when people discuss the broadcast business. 

At the end of the day the broadcast industry is a business; so when you head off to the NAB show, make sure you understand what both technology and financial people are thinking.

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Related Content:

Covington Associates: 2011 NAB Show Overview

Silverwood Partners: 2011 NAB Show Strategic Industry Analysis

Broadcasting & Cable Article: Gearing up for NAB 2011

Broadcast Industry’s Most Comprehensive Market Study Reveals Top Trends of 2011

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Ascent Media Joins Azcar in Shutting Down Broadcast Systems Integration Business

broadcast technology market research | Posted by Joe Zaller
Mar 25 2011

Yesterday broadcast systems integrator Azcar announced that it was shutting down its operations. 

It turns out that Azcar is not the only broadcast SI shutting its doors.  On the same day that Azcar announced its liquidation, it was revealed that Ascent Media is also closing shutting down its broadcast systems integration business.

This week Ascent Media senior buyer Marlene Lefort sent a letter to Ascent’s partners and suppliers saying that Ascent is closing its systems integration business on or about May 1, 2011.

Here’s the text of the letter:

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 “This letter is to inform you that Ascent Media Systems Integration will be shutting down for business on or about May 1, 2011. We thank you for your support these past years and wish you continued success. If you have any questions or concerns, please feel free to contact me.”

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Ascent’s SI business has struggled in recent years as a result of the recession, which forced many of its customers to delay or cancel projects.

Ascent’s recent 10-K filing with the SEC shows the impact of the recession on the company’s SI business.  On page 32 of the filing, it says:

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“Revenue.  In 2010, Content Services revenue decreased by $27,185,000 or 17.6% due to a decrease of $27,474,000 in system integration services as customers reduced their spending on system integration projects, with one customer, Motorola, accounting for $17.0 million of the decease and (ii) a decrease of $1,165,000 due to lower revenues for content distribution and transport services in the United States and Singapore. In 2009, Content Services revenue decreased by $105,754,000 or 40.6% due to (i) a decrease of $95,511,000 in system integration services revenue due to a significant number of large projects in the United States and the United Kingdom in the prior year with one customer, Motorola, accounting for $47.8 million of the decrease, and a decline in system integration projects in 2009 as customers reduced their spending in response to a weaker economic climate, (ii) $7,282,000 due to lower content origination and transport services in the United States and the United Kingdom and (iii) unfavorable changes in foreign currency exchange rates of $3,826,000.”

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Although it’s quite a coincidence that both Azcar and Ascent announced that are shutting their SI operations in the same week, Ascent had previously telegraphed its intention to close the SI business via filings with securities regulators.

In its 10-K filing, Ascent stated its intention to dispose of the systems integration business, saying:  “We are currently exploring opportunities to dispose of the Systems Integration business, which we consider non-core. There can be no assurances that the disposition of the SI business will be completed in the near term and/or on terms favorable to Ascent Media, or on any terms.”

Ascent is in the process of transforming its business.  It recently acquired Montronics, a company that provides security alarm monitoring services: monitoring signals from burglaries, fires and other events, as well as, providing customer service and technical support. Ascent says Montronics has stable and scalable revenues.

To fund the Montronics acquisition, the company shed its broadcast-related interests, and exited the broadcast business altogether.  As part of this process, Ascent has disposed of assets including its:

  • Chiswick Park playout facility in London, which was sold to Discovery Communications for $34.4m
  • Global Media Exchange business, which was classified as discontinued operations in September 2010
  • Creative Services business, which was sold to Deluxe Entertainment for $69m
  • Content Distribution business, which was sold to Encompass Digital Media for $104m

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Unfortunately, it appears that Ascent has been unable to sell its SI business and has been forced to close its doors.

 

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 Related Content:

Ascent Media 2010 annual 10-K filing with SEC

Devoncroft blog post” http://bit.ly/hn6pUn

TVB article: Azcar Folds

Broadcast Engineering Article: Systems integrator AZCAR ceases business

Press Release: Ascent Buys Montronic

Ascent Sells Post Business to Deluxe

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Broadcast Systems Integrator Azcar Technologies Ceases Operations

Broadcast technology vendor financials | Posted by Joe Zaller
Mar 24 2011

Canadian systems integrator Azcar Technologies said in a brief statement today that the company “had ceased business and would be operated under the control of a Chief Liquidation Officer.”

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Update:

Television Broadcast’s Deb McAdams has written a good article on the story.  You can find it here.

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Vislink News & Entertainment Revenue Declined 28 Percent in 2010

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Mar 24 2011

UK-based Vislink plc, which owns the Advent, Link, and MRC brands, announced that its revenue in 2010 from its news and entertainment business unit was £31.6m, a decline of 28% versus 2009.

The company attributed its poor performance to weak market conditions, and to the completion of the 2GHz relocation project in the USA, which accounted for £9.75m in revenue in 2009.  Excluding 2GHz revenue, the company’s “core revenue” declined 7% in 2010 versus 2009.

Vislink said that core revenue was adversely impacted by a continuing slowdown in broadcasters’ expenditure. This trend was most pronounced in Europe, but also impacted revenues in the Americas and Middle East regions. On a brighter note, the company said its revenue in the Asia Pacific region grew by 45 per cent during 2010.

The company also reported that its operating margins for the year were 13%, down from 20% in 2009.  Vislink said the reduction in the operating margins was due to a combination of a 2.2 point reduction in gross margin due to increasingly competitive pricing; and higher overheads as a proportion of total sales despite the fact that sales and marketing costs were reduced by 15 per cent over the course of the year.

These results come as the company is in the middle of major corporate transformation program.  Last year Vislink announced its intention to restructure its operations by selling its marine energy (ME) business and focusing on the broadcast and public safety markets. After selling the ME business, the company then shed 25% of its workforce through a layoff round, which saw 60 people lose their jobs.  At the beginning of 2011, the company announced that its CEO will step down at its AGM in April.

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M&A Update:

As part of its previous M&A announcement, Vislink said that it intends to buy Gigawave, a competitor in the wireless camera, microwave and antenna markets; and to dispose of Western Technical Services (WTS), a small US-based services business.

Vislink is continuing to shop WTS and says it will continue to operate independently until the business is sold. Until such time it will be reported as a discontinued activity.

However, it now looks like the Gigawave deal may not happen.  As part of the earnings announcement, the company said “Whilst we continue to believe in the industrial logic of bringing Gigawave and Vislink and their associated brands together we have, to date, been unable to reach an agreement with the vendors.”

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Related Content:

Vislink Issues Results for 2010

Vislink CEO to Step Down, Will be Replaced by New Chairman on Interim Basis

Vislink Lays off 25% of Workforce

Vislink Restructuring Operations. Announces M&A Program to Focus Business on IP Video for Broadcast and Public Safety Markets

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Tracking Changes in Broadcast Industry Trends — 2011 Versus 2010

broadcast industry technology trends, broadcast industry trends, broadcast technology market research, market research, technology trends | Posted by Joe Zaller
Mar 21 2011

This is the second in a series of articles about some of the findings from the 2011 Big Broadcast Survey (BBS), a global study of broadcast industry trends, technology purchasing plans, and benchmarking of broadcast technology vendor brands.  More than 8,000 people in 100+ countries took part in the 2011 BBS, making it the largest and most comprehensive market study ever done in the broadcast industry.

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In a recent post I discussed the 2011 BBS Broadcast Industry Global Trend Index, which shows the most important trends in the broadcast industry for 2011.

The article referenced both the 2009 and 2010 BBS Broadcast Industry Global Trend Index from, and looked at how the rankings of trends have changed over time.  For example, in 2009 the transition to HDTV operations was, by far, the top ranked trend.  However by 2011, the transition to HDTV operations had been overtaken by multi-platform content delivery as the top trend (although the move to HD is clearly still very important).

This post generated a lot of lot of feedback from clients and readers.  Many people said they wanted to more easily see changes to the importance of trends over time, and asked for a single chart that shows year-over-year comparisons.  I’ve done this in the chart below, which shows a comparison of the BBS Broadcast Industry Global Trend Index from 2011 and 2010. 

Please note that I have not included the 2009 Index in this chart because multiple changes were made to the trends in the Index between 2009 and 2010, reducing the ability to make an “apples-to-apples” comparison.  It’s also worth noting that all 14 trends from the 2010 Index were included in the 2011 Index.  However, based industry feedback, we added a 15th trend to the 2011 list – i.e. analog switch-off, which was ranked 11th out 15 in 2011.  The addition of analog switch-off likely “cannibalized” a small percentage of responses from other trends in this year’s ranking. 

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So what changed between 2010 and 2011? 

There are two ways to look at this:

  • changes in overall numerical ranking relative to the previous year
  • changes in overall commercial importance relative to the previous year

 

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Changes in Numerical Ranking of Broadcast Industry Trends

Let’s start with the overall numerical ranking of trends.  The first column in the table below shows how trends were ranked in 2011. The number in parentheses to the right of each trend shows how it ranked in the 2010 BBS Index. Although there were no changes at the top and bottom of the 2011 Index versus the 2010 Index, almost everything in between changed position relative to the previous year.

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As I wrote previously, the top four trends in the 2011 Global Broadcast Industry Trend Index are the same as last year and the year before:

  • Multi-platform content delivery
  • Transition to HDTV operations
  • File-based / tapeless workflows
  • IP networking and content delivery

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However, there has been considerable movement in the relative ranking of these four trends over the past several years.  Most significantly, “multi-platform content delivery” has become increasingly important, and is the dominant trend in 2011.   

Several trends were ranked more highly in 2011 than in 2010.  For example video-on-demand moved up from #8 in 2011 from #6 in 2011; while 3DTV moved up from #10 in 2010 to #8 in 2011.

Other trends remained relatively static in terms of their ranking in 2011.  For example: “transition to 3Gbps operations”, “transition to 5.1 channel audio”, “outsourced operations” and “green initiatives” remained the bottom four trends in 2011, as they were in 2010.

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Changes in Commercial Importance of Broadcast Industry Trends

As well as changes to numerical ranking, there were also year-over-year changes to the perception of commercial importance to each trend.  This is shown in the table below:

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For the most part, the trends moved up in the rankings in 2011 also were seen as more important commercially versus the previous year. 

However, it is possible for a trend to move up in the numerical ranking, while moving down in terms commercial importance to respondents, as happened this year with the transition to HDTV operations.  In this case, these changes are likely more of a function of the strong showing for multi-platform content delivery, than a poor showing for the transition to HDTV.

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Why Tracking Movement of Trends is Important

In the broadcast industry much of the spending on technology is project-based, and those projects all come from somewhere.  Our view is that industry trends drive capital projects, which in turn drive budgets, which in turn drive product purchase.  In other words, what’s commercially important to technology buyers today (i.e. trends) will likely turn into what they are budgeting for tomorrow (i.e. projects).

Looking at the trend data from the 2011 BBS, monetizing content on multiple platforms is clearly a key objective for broadcast professionals this year.  Yet, as I wrote a few months ago after returning from CES: “On the monetization point, I lost count of the number of times I heard the word “experimentation” during [conference] sessions – particularly from content owners.  In other words, although everyone agrees that multi-platform content delivery is a very important trend, many players have still not figured out the business model.”

There’s a difference between recognizing that a trend is commercially important and having a business plan in place that capitalizes on it.  So while there’s no doubt that generating incremental revenue by delivering a multi-screen experience to consumers is hot topic, business models have to move beyond the experimental in order to drive serious market growth.  Once that happens, multi-platform content delivery will likely become the most important planned project rather than just the most important trend.

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Keep in mind when reading this information that all data in this article measures the responses of all non-vendor participants in the 2011 BBS, regardless of organization type, organization size, job title or geographic location.  Responses of individual organization types or geographic locations may be very different than those shown in this high level overview.  Granular analysis of these results is available as part of the full 2011 BBS Global Market Report. For more information about this report, please contact Devoncroft Partners.

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Related Content:

You can find out about the 2011 Big Broadcast Survey here.

The 2011 BBS Broadcast Industry Global Trend Index is here.

The 2010 BBS Broadcast Industry Global Trend Index is here.

The 2009 BBS Broadcast Industry Global Trend Index is here.

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This article is based on the findings from the 2011 Big Broadcast Survey (BBS), a global study of industry trends, technology purchasing behavior and the opinion of vendor brands.  With more than 8,000 people in 100+ countries participating, the 2011 BBS is the largest and most comprehensive market study ever done in the broadcast industry.

Devoncroft Partners has published a variety of reports from 2011 BBS data.  For more information, please get in touch.

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©Devoncroft Partners 2009-2011

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SeaChange Announces Q4 and Full Year 2011 Results

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Mar 18 2011

Video on demand solution provider SeaChange International announced that its revenue in the fourth quarter of FY 2011 was $61.4m, an increase of 16% versus the same period a year ago, and an increase of 23% versus the previous quarter.  Non-GAAP revenue in the quarter was $56.8m, an increase of 5% compared to the same period a year ago.

GAAP net income for the fourth quarter was $10.9m, a significant improvement on the break-even results for the fourth quarter of last year, and a GAAP loss of $5.2m during the previous quarter.  Non-GAAP net income for the fourth quarter was $5.8m, compared with non-GAAP net income of $2.3m in the previous year’s fourth quarter.

The company attributed the changes in GAAP results to two deals that fourth quarter that “materially impacted its reported GAAP financial results but were excluded from its non-GAAP financial results.”

  • In December of 2010 SeaChange realized a $1.9m pre-tax gain when a company in which it held an equity stake was sold to Dell 

 

  • During the fourth quarter a SeaChange customer switched to another VOD equipment supplier, enabling SeaChange to recognize $4.6m in pre-paid maintenance revenue as a result of the deactivation notice

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Segment Performance:

  • Software revenue was $46.1m, an increase of 32% versus both the same period last year and the previous quarter.  The strong software results were helped by the accelerated recognition of $3.4m in maintenance revenue mentioned above.

 

  • Sales from the servers & storage segment were $8.8m, down 28% compared to the same period a year ago, and up 42% versus the previous quarter.  The company attributed the decrease in servers and storage revenue to lower VOD server shipments to North American customers partially offset by VOD server shipments to a customer in Latin America and a customer in Europe.

 

  •  Media services revenue was $6.4m, up 9% versus the same period last year, and down 21% versus the previous quarter.

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Full Year 2011 Results:

For the fiscal year ended January 31, 2011 GAAP revenue was of $216.7m, an increase of 7% versus fiscal 2010.  Non-GAAP revenue for the fiscal year was $216m, an increase of 6% versus fiscal 2010.

GAAP net income for fiscal 2011 was $29.5m, up from $1.3m in fiscal 2010.  Non-GAAP net income for the year was $13.7m, up from $8m last year.

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Related Content:

You can read the full SeaChange Q4 and FY 2011 earnings press release here.

You can read about SeaChange’s Q3 results here.

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Chyron Revenue Increases 8% in 2010 as Company Achieves Positive EBITDA on Smaller Losses. Separately, SVP and COO Kevin Prince Resigns

Quarterly Results | Posted by Joe Zaller
Mar 17 2011

Broadcast graphics solutions provider Chyron reported that its revenue for the fourth quarter of 2010 was $7m, down 2% versus the fourth quarter of 2009, and up 1% versus the previous quarter.  The company posted a net loss of $550,000 for the quarter, compared to a net loss of $310,000 during the same period a year ago, and a loss of $480,000 last quarter.  The company’s adjusted EBITDA (a non-GAAP measure) was $700,000 during the quarter.

Service revenue in the quarter was $1.65m, or 23% of total revenue in the quarter.  This represents a 36% increase versus the same period a year ago and an increase of 30% when compared to the previous quarter.  Chyron’s service revenue includes the sales of Chyron’s AXIS cloud-based graphics service, maintenance agreements, training and creative services.

Product revenue in the quarter was $5.38m, a decrease of 10% versus Q4 2009 and an increase of 1% versus the previous quarter. 

For the full year 2010, the company’s revenue was $27.7m, up 8% versus 2009.  Chyron posted a net loss of $2.4m in 2010, 23% better than the net loss of $3.12m in 2009.  However, the company achieved a profit of $340,000 on an EBITDA basis, an improvement on the $1m EBITDA loss in 2009.

Full year revenue from services was $6.28m, up 31% versus 2009, and accounting for 23% of total revenue in 2010.  Product revenue for the year was $21.45m, a increase of 3% versus 2009.   

Chyron president and CEO Michael Wellesley-Wesley attributed the company’s improving performance to continued recovery in the broadcast market, particularly in the second half of the year, and a focus on cost during the year.

Wellesley-Wesley he said is “guardedly confident that the recovery in the broadcast markets will continue and will generate renewed demand for our products and services offerings throughout 2011 and into 2012.”

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Chyron SVP & COO Steps Down

Separately, Chyron reported via an 8-K filing with securities regulators that company SVP and COO Kevin Prince has notified the company that he will resign from his role effective March 25, 2011, due to other commitments.

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Related Content

You can read Chyron’s Chyron Q4 and Full year 2010 press release here

Information on Chyron Q3 2010 results are here.

The notification of the resignation of SVP & COO Kevin Prince is here.

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More Broadcast Vendor M&A: KIT digital Acquires Polymedia for $34.4m

Broadcast Vendor M&A | Posted by Joe Zaller
Mar 17 2011

Kit digital announced that it has signed a definitive agreement to acquire IP video platform-provisioning provider Polymedia in a cash and stock deal valued at $34.4m.  The transaction includes guaranteed payments of approximately $34.4 million at closing, comprised of $17.2 million in cash and up to $17.2 million in KIT digital common stock.

Polymedia, headquartered in Milan, has a total full-time staff of approximately 150, plus 70+ occasional contractors.  The company is profitable as a stand-alone company, and is expected to contribute approximately $19m in annualized revenue to the enlarged company. KIT digital management said it expects the Polymedia acquisition to be accretive to earnings.

Polymedia’s core technology revolves around a set of proprietary tools that will allow KIT digital to more rapidly deploy its network operator and broadcaster solutions, and support various revenue models for premium IP video content. Deployments include video-on-demand (VOD) stores, subscription VOD, catch-up TV, e-commerce integrated product placement promotions, and advertising-sponsored content.

Kit digital has been very acquisitive recently, snapping up about a dozen companies, including the recent acquisitions of KickApps, Kewego and Kyte, which were announced at the end of January 2011.  

Last year, Kit digital raised $110m through a stock offering, and said much of the proceeds would be used to fund M&A activities. 

Following the completion of the Polymedia acquisition, KIT digital says it will have approximately $90 million in cash and equivalents.

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Related Content:

Press Release: KIT digital Acquires Polymedia

KIT digital Reports Q4 and Fiscal 2010 Results, Raises Guidance, Says Big M&A Deal Still on Track

Kit digital buys KickApps, Kewego, and Kyte

Kit digital sells $100m of stock, says proceeds will be used to fund broadcast industry M&A activities.

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KIT digital Reports Q4 and Fiscal 2010 Results, Raises Guidance, Says Big M&A Deal Still on Track

Broadcast technology vendor financials, Broadcast Vendor M&A, Quarterly Results | Posted by Joe Zaller
Mar 17 2011

IPTV Asset management provider Kit digital reported that its revenue for the fourth quarter of 2010 was $38.4m, more than double the same period a year ago, and an increase of 39% versus the previous quarter.   

The company posted a net loss of $8.5m on a GAAP basis during the quarter, compared to a net loss of $8m in the previous quarter, and a net loss of $15.6m during the same period a year ago

On a geographic basis, the EMEA region contributed approximately 45% of revenue during the quarter, with Asia-Pacific and the Americas contributing 35% and 20% respectively.

For the full year 2010, the company posted a GAAP net loss of $35.3m on revenue was $106.6m.  Revenue increased 125% versus 2009.  EBITDA (a non-GAAP measure) for the year was $18.3m. On a geographic basis, the EMEA region contributed approximately 54% of revenue in 2010, with Asia-Pacific and the Americas contributing 25% and 21% respectively.

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Revenue Guidance
In guidance issued in November 2010, the company said it expects to achieve revenue in excess of $137.5 million for fiscal 2011, with an EBITDA margin of approximately 24%. This guidance was issued prior to any its recent M&A activity.

Company chairman and CEO Kaleil Isaza Tuzman said that the revenue guidance from November 2010 will be revised up based on the M&A activity, including the recent acquisitions of KickApps, Kewego and Kyte, which were announced at the end of January 2011.  “If you overlay our organic, pre-acquisition revenue target of $137.5 million with the estimated annualized run-rate of recently acquired companies — totaling around $44 million — and adjust for the approximate date of closing and any seasonality for each — it provides for an expectation of revenues in 2011 in excess of $170 million, or up more than 60% percent over 2010.”

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M&A Plans Still on Track
Much of Kit digital’s growth has been based on the numerous acquisitions the company  has made, including the recent deals for KickApps, Kewego, Kyte, and the recently announced Polymedia.  The company says it “purposefully sequenced” these deals to happen prior to a “material acquisition” that the company has been hinting at for several quarters.

Last year, Kit digital raised $110m through a stock offering, and said much of the proceeds would be used to fund M&A activities.  During the company’s earnings call with analysts, Tuzman said that the majority of these funds “continue to be dedicated to support a prospective larger acquisition in the very near future.”

Tuzman says that KIT digital plans to announce this larger transaction by the end of Q1 or in early April.

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Related Content:

Kit digital Q4 and FY 2010 earnings press release

Kit digital Q3 earnings information

Kit digital buys KickApps, Kewego, and Kyte

Kit digital sells $100m of stock, says proceeds will be used to fund broadcast industry M&A activities.

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Broadcast Industry’s Most Comprehensive Market Study Reveals Top Trends of 2011

broadcast industry technology trends, broadcast industry trends, broadcast technology market research, market research, technology trends | Posted by Joe Zaller
Mar 16 2011

This is the first in a series of articles about some of the findings from the 2011 Big Broadcast Survey (BBS), a global study of broadcast industry trends, technology purchasing plans, and benchmarking of broadcast technology vendor brands.  More than 8,000 people in 100+ countries took part in the 2011 BBS, making it the largest and most comprehensive market study ever done in the broadcast industry.

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The 2011 BBS Broadcast Industry Global Trend Index

Each year, Devoncroft Partners conducts a large scale global study of the broadcast industry called the Big Broadcast Survey (BBS).  More than 8,000 broadcast professionals in 100+ countries participated in the 2011 BBS, making it the most comprehensive study ever done in the broadcast industry.

One of the key outputs from the BBS is the annual BBS Broadcast Industry Global Trend Index. This is a ranking of the broadcast industry trends that are considered by BBS respondents to be the most commercially important to their businesses in any given year.

To create the 2011 BBS Broadcast Industry Global Trend Index, we presented BBS respondents with a list of 15 industry trends and asked them to tell us which one trend they consider to be “most important” to their business, which one trend they consider to be “second most important” to their business, and which other trends (plural) they consider to be “also very important.” 

We then used the responses to this question to create the BBS Broadcast Industry Global Trend Index by applying a weighting based on the commercial importance of each trend. 

Please note that our goal from this question is to help clients gain insight into the business drivers behind the respondent’s answer.  Therefore, we asked this question in the context of commercial importance, rather than “industry buzz” or technology hype.

The table below shows the 2011 BBS Broadcast Industry Global Trend Index.  Please note that this chart measures the responses all non-vendors who participated in the 2011 BBS, regardless of company type, company size, geographic location, job title etc. 

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Similar to results in both the 2009 and 2010, the top four trends in the 2011 Global Broadcast Industry Trend Index are:

  • Multi-platform content delivery
  • Transition to HDTV operations
  • File-based / tapeless workflows
  • IP networking and content delivery

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However, there has been considerable movement in the relative ranking of these four trends over the past several years.  Most significantly, “multi-platform content delivery” has become increasingly important, and is the dominant trend in 2011.   For comparison:

  • In 2009, the BBS Broadcast Industry Global Trend Index was dominated by the transition to HDTV operations, while multi-platform content delivery was fourth on the list

 

  • In 2010, multi-platform content delivery had become the most important industry trend, narrowly eclipsing file-based / tapeless workflows (which were combined in the 2010 BBS Trend Index) and the transition to HDTV operations

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These results show that broadcast professionals continue to focus their efforts on taking advantage of the potential for incremental revenue streams presented by multi-platform content delivery.  Indeed, as the chart above shows multi-platform content delivery was ranked significantly higher than any other trend in our 2011 study.  As video content become ubiquitous, broadcasters and content owners are looking for ways to monetize their assets, and grow their revenue.  Technology vendors are continuing to develop solutions to convert content for optimal performance on any platform, and to run targeted ads alongside that content.

But there is more to the story than just multi-platform content delivery. For the third year in a row, the transition to HDTV operations ranks as one of the top trends in the broadcast industry.  It’s likely that HDTV upgrades will continue to be one of the major drivers of project-based spending as broadcasters around the world continue with plans to transition their operations to HDTV.  We provide significant coverage of the global move to HDTV in the 2011 BBS Global Market Report.  This includes a breakdown of where broadcasters are in their transition to HD, and a look at the upgrade plans for more than a dozen product categories. We’ll also be publishing more information here about project-based spending and the HD transition in future articles.

Operational efficiencies (through file-based / tapeless workflows) remain a significant macro driver in 2011, as broadcasters continue to deploy new workflows.  The increasing importance of file-based technologies has implications for the broadcast industry in terms of both workflows and product procurement.  Our previous research shows that broadcasters are moving to file-based workflows not only to achieve greater speed and efficiencies, but also to reduce cost.  During the recession, technology budgets were typically prioritized towards solutions that add revenue and/or reduce cost.  Now that the industry is recovering from the downturn, it’s likely that the way technology is purchased will remain focused on these commercial priorities.

Several trends were ranked more highly in 2011 than in 2010.  For example video-on-demand moved up from #8 in 2011 to#6 in 2011; while 3DTV moved up from #10 in 2010 to #8 in 2011.

Other trends remained relatively static in terms of their ranking in 2011.  For example: “transition to 3Gbps operations”, “transition to 5.1 channel audio”, “outsourced operations” and “green initiatives” remained the bottom four trends in 2011, as they were in 2010.

It’s worth mentioning that in order to show year-over-year movement, all trends from the 2010 BBS were included in the 2011 BBS.  However, based on industry feedback, we added a 15th trend to the 2011 list – i.e. analog switch-off, which was ranked 11th out of 15 in 2011.  The addition of analog switch-off likely “cannibalized” a small percentage of responses from other trends in this year’s ranking. 

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Keep in mind when reading this information that all data in this article measures the responses of all non-vendor participants in the 2011 BBS, regardless of organization type, organization size, job title or geographic location.  Responses of individual organization types or geographic locations may be very different.  Granular analysis of these results is available as part of the full 2011 BBS Global Market Report. For more information about this report, please contact Devoncroft Partners.

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Related Content:

You can find information about the 2011 Big Broadcast Survey here.

The 2010 BBS Broadcast Industry Global Trend Index is here.

The 2009 BBS Broadcast Industry Global Trend Index is here.

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This article is based on the findings from the 2011 Big Broadcast Survey (BBS), a global study of industry trends, technology purchasing behavior and the opinion of vendor brands.  With more than 8,000 people in 100+ countries participating, the 2011 BBS is the largest and most comprehensive market study ever done in the broadcast industry.

Devoncroft Partners has published a variety of reports from 2011 BBS data.  For more information, please get in touch.

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