Posts Tagged ‘2010 Big Broadcast Survey’

The Commercial Drivers for Multi-Platform Content Distribution in the Broadcast Industry

broadcast industry technology trends, broadcast industry trends, broadcast technology market research, content delivery | Posted by Joe Zaller
Jan 13 2011

This is the third in a series of occasional articles about the commercial drivers behind some of the most important trends in the broadcast industry.

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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 is the “most important” commercially to their business over the next few years, which one is “second most important” commercially important to their business over the next few years, and which others are “also very important.” 

These results were then weighted to create the 2010 BBS Trends Index, which is shown in the table below.

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By a wide margin, the top three places in the 2010 BBS Global Trend Index were multi-platform content delivery; file-based / tapeless workflows; and the transition to HDTV operations.

This article looks at the commercial drivers behind the top trend in the 2010 BBS Trend Index, multi-platform content delivery, and sheds light on why multi-platform content delivery is important to broadcast professionals world-wide. 

If interested, you can also read previous articles about commercial drivers for the global move to HDTV operations, and the commercial drivers for the global move to file-based operations.

In order to understand why, we asked respondents who said multi-platform content delivery the trend that’s most commercially important to their business a series of questions, including the reasons why, which vendors they feel are best positioned to provide solutions to their needs, and what obstacles they think might prevent them from achieving their goals.

As shown in the chart below, the top two reasons cited by most 2010 BBS respondents for the commercial importance of multi-platform content delivery is to provide potential new revenue streams and to ensure that branded content is available on all distribution platforms.

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These results were fairly consistent across the respondent base, with 77% of respondents falling into one of these two categories.  However there were a few notable exceptions. 

There was a marked contrast in the responses from pay TV broadcasters versus license fee funded broadcasters.  Pay TV providers were overwhelmingly concerned with new revenue streams, while public broadcasters were interested primarily in making sure their branded content is available on all distribution platforms.

Second only to pay TV providers, respondents from the government / education / corporate sectors were also very interested in having their content available on all platforms

Other differences were more subtle.   Respondents from EMEA were slightly more interested having their branded content on all platforms, than were respondents from the Americas who were more interested in generating new revenue streams.

Participants in the China and the Middle East and Africa were more interested in gaining a competitive advantage than respondents from other regions.

When considering the responses of broadcasters (shown on the far right of the above chart), most seem to agree that the generating new revenue streams is the most important reason for moving to a multi-platform distribution model.  Interestingly the smallest broadcasters see the need to have their content widely available on all platforms is more important than new revenue stream.

If you are interested in a more comprehensive breakdown of these results, please contact Devoncroft Partners for more information.  

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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.

The 2011 Big Broadcast Survey will be published in the first quarter of 2011, and will provide an updated view of these findings as well as a year-over-year comparison.

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Looking Back at 2010 — The Most Read Posts

broadcast industry technology trends, broadcast industry trends, broadcast technology market research, Broadcast technology vendor financials, Broadcast Vendor Brand Research, Top Broadcast Vendor Brands | Posted by Joe Zaller
Jan 02 2011

Here’s a list of our top 10 most read posts from 2010. Thanks for reading.  Looking forward to 2011.

 

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Broadcast Industry’s Largest Market Study Reveals Most Important Technology Trends

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Where is Money Being Spent in the Broadcast Industry? — A Review of Major Projects Being Planned

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2010 Broadcast Industry Market Research Findings

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The Top 30 Broadcast Technology Vendor Brands, Ranked by “Overall Opinion,” Globally and Regionally

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Avid to Cut Jobs, Close Some Facilities During First Half of 2011

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Innovation rankings for Broadcast Technology Vendors – The Top 30 Globally

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Value for Money Rankings of Broadcast Technology Vendors — The Top 30 Globally

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Harris Broadcast Posts Q4 and Full Year Results

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Echolab Goes into Liquidation

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Broadcast Technology Vendors Predict Strong Increase in Software Revenue

broadcast industry technology trends, broadcast industry trends, Broadcast technology channel strategy, broadcast technology market research | Posted by Joe Zaller
Nov 01 2010

When I recently saw the headline “Solving the TV Station Hardware Dilemma” on the Broadcast Engineering website, I stopped to read.

Although the article turned out to be about integrated playout (a.k.a. channel-in-a-box) automation servers rather than a debate about hardware versus software in a broadcast facility, it got me thinking about the shift in broadcasting towards IT-oriented technologies, and what vendors are doing about this market transition.

Our research has found that the move to IT-based operations is one of the broadcast industry’s most important technology trends. This will obviously have a major impact on the broadcast technology vendor community. 

Some commentators like boutique investment bank Silverwood Partners say that there is a diminishing hardware opportunity and that value is migrating to software-based products.  So what are broadcast technology vendors doing to change their product ranges and business models?

To better understand these issues we asked the nearly 800 broadcast technology vendors who responded to the 2010 Big Broadcast Survey, about the make-up of their current and future product portfolio.  Vendors were asked to break down the sources of their revenue by product hardware, software, maintenance, and service. 

Here’s what we found:

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Current Sources of Vendor Revenue – Product Mix

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Hardware products represent the largest percentage of vendor revenue, with more than 80% of respondents indicating that hardware sales represents greater than 20% of revenue, and 31% reporting that hardware products represent more than 80% of revenue.

While more than half of vendors reported that software represents a significant portion of their revenues, only 6% identified software as representing more than 80% of their sales.

Maintenance and service revenues represent a small part of the overall vendor revenue stream today.

But what are vendors projecting for the make-up of their future revenue?

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Future Sources of Vendor Revenue – Product Mix

Vendors were also asked to predict how their revenue by product mix would change over the next several years.

More than half of vendors report that they expect sales of hardware products to stay the same or increase over the next several years, while 20% expect hardware product sales to decline over the same period.

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Vendors expect to see large growth in software sales, with 76% of vendors predicting sales of software products will increase over the next 2-3 years.  Included in this number are an impressive 51% of vendors who expect software product sales to increase by more than 10%.

Vendors are also clearly looking towards maintenance and service revenues to expend their businesses.  Whereas the previous chart shows that today’s revenue from these sources is not huge, vendors are almost all anticipating that maintenance and service income will stay the same or increase over the next several years. 47% of vendors predict that maintenance revenue will increase, and 48% of vendors predict that customer service revenues will increase during this period.   

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Projected Future Vendor Hardware / Software Revenue – by Company Type

To better understand these responses, it’s helpful to profile the research participants according to the type of company they represent.

In the charts below, I have broken out the responses to the projected product mix question based on whether the respondent works for a company that provides primarily hardware products, primarily software products, or has a mixture of both.  In this case “primarily” is defined as more than 70% of a company’s revenue.  Responses for the average of all vendor responses are also shown for the sake of comparison with charts above.

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Hardware Sales

Firstly, let’s look at what vendors predict will happen to their hardware sales.  The chart below shows that 20% of respondents expect hardware product sales to decline over the next few years, while more than half expect hardware product revenue to stay the same or increase over the same period.

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However, there is a clear difference between those vendors who currently produce primarily hardware products versus those who currently produce primarily software products.

73% of respondents from companies who primarily sell hardware products think that their hardware revenue will grow over the next few years.  Conversely, just 39% of respondents from software-oriented companies think their hardware revenue will increase.

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Software Sales:

What about revenue from software products? The chart below shows how vendors project their software sales will change over the next 2-3 years.

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Virtually all vendor respondents predict that their revenue from software will increase over the next few years.  Just 5% of respondents believe that software revenue will decline during this timeframe.

67% of vendors respondents whose company sells primarily hardware products predict that their sales from software products will increase over the next few years, while 86% of respondents from software-oriented vendors believe their software revenue will grow.

These results show that while hardware product sales are not going away any time soon, technology suppliers are responding to market demand for software-oriented products.  Although this analysis does not attempt to put a value on or quantify the percentage of future software sales, it appears that vendors are gearing up to provide more software solutions in the belief that this will help drive revenue growth.

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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.

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What are the Commercial Drivers for the Global Move to HDTV Operations?

broadcast technology market research | Posted by Joe Zaller
Oct 13 2010

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:

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Q. Why the transition to HDTV operations the most important to your business?

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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.

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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.

A Look at How the Recession Affected Broadcast Technology Vendors

broadcast industry technology trends, broadcast industry trends, broadcast technology market research, Broadcast technology vendor financials | Posted by Joe Zaller
Sep 29 2010

Last week I wrote an article about how the recession impacted the technology budgets of broadcasters and other purchasers of broadcast technology products.

This showed that broadcast technology spending in EMEA held up better than in the Americas, which was hit particularly hard by the recession.  For example, 40% of respondents from the Americas reported that their budgets for 2010 were lower than in the previous year.  

So how did this reduction in spending affect the sales of vendors who supply hardware and software products to these customers?

To find out, we asked just under 800 broadcast technology vendors who participated in the 2010 Big Broadcast Survey how their company’s revenues had changed over the past year in terms of percentage growth or decline.

On an overall basis, 45% of vendors reported that their sales had either declined or stayed the same versus the previous year, and about half of respondents reported that their sales had increased – in some cases by quite a bit.

When I saw these results I wanted to know the detail behind them so that I could figure out if one type of vendor had fared better than others, and if so what were the determining factors.

For example: was company size a factor? How about location, type of products sold, or whether the vendor is a “pure-play” broadcast company or a one that operates in multiple markets including broadcast?

Based on these questions, I decided to break out the results by a variety of demographic factors, as shown in the chart below:

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When the results are viewed this way it appears that the largest companies were the most impacted by the recession. 53% of respondents from vendors with 1,000+ employees reported that their sales had either declined or stayed the same. 

Large companies were closely followed by respondents based in the Americas, and those from firms that primarily supply hardware products.  More than half of these respondents reported that their sales had either declined or stayed the same versus the previous year.

In terms of pure-play versus non-pure-play broadcast vendors, respondents from firms that sell more than 80%+ of their products into the broadcast industry fared slightly worse than those who sell 20% or less of their products into the industry.

So which vendors reported the most growth?  The short answer is small companies, software vendors and VC funded private firms (many of whom are undoubtedly small providers of software products).  

In terms of overall growth 50% of vendors reported that their revenues had increased versus the previous year. However when you consider companies who provide primarily software products, this number jumps to 62% of respondents.

What about the respondents who said their company’s revenues increased the most? Again, software companies lead the way.  21% of respondents from vendors that sell primarily software products, and 18% of privately held VC-backed companies, reported that their revenue grew by more than 30% versus the previous year. And 18% of small companies (those with 50 employees or less) also reported that their revenues had increased by 30% or more.

When reading these results it’s of course important to keep in mind that revenue growth is one thing, but profitability is another. 

This analysis does not consider the profitability of vendors, but I recently wrote about the findings of a recent IABM study in this area as part of a post on my impressions of IBC 2010.

In that post I reported that during an IBC session on the state of the industry, IABM Director General Peter White stated that about 60% of broadcast technology suppliers are now making a profit – up considerably from last year – with European companies performing better in terms of profit performance.   For more information on these results, I encourage you to contact the IABM.

If you’re interested in more information about how broadcast technology vendors responded to the 2010 Big Broadcast survey, please contact me and I’ll try to give you the information you need.

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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.

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Economists Say Recession is Over – What was it Like for the Broadcast Industry?

broadcast industry technology trends, broadcast industry trends, broadcast technology market research, Broadcast technology vendor financials | Posted by Joe Zaller
Sep 21 2010

This week, the Wall Street Journal reported that the National Bureau of Economic Research, the arbiter of the start and end dates of a recession, determined that the US recession that began in December 2007 ended in June 2009.  

I am not sure these dates match up with the reality in the broadcast industry, since 2008 was a  banner year for most of the industry with the US elections and the Beijing Olympics.  Still, there’s no doubt that the industry has been in recession for some time, and we are now being told that it’s over — officially at least.

Whether you believe that the recession is over or not, there’s no denying that times have been tough in the broadcast industry over the past couple of years.  

Broadcast technology budgets were hard hit by the global downturn, which in turn impacted the supplier community.  For the past 18 months, vendor after vendor has reported that their sales are down due to the reigning-in of spending by customers.  During this time technology providers have been impacted severely. Many have reported losses and have gone through painful rounds of layoffs.  Some businesses have liquidated, and there has been a marked uptick in industry consolidation.  

To find out how broadcast technology budgets were impacted by the recession, we asked a series of in-depth questions to a global sample of broadcast technology professionals as part of the 2010 Big Broadcast Survey (BBS).  (The BBS, which is conducted annually by Devoncroft Partners, is the largest and most comprehensive study of the broadcast industry. More than 5,600 people participated in the 2010 study).  

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Regional comparison of broadcast technology budgets in 2010 

 As seen in the chart below, broadcast technology spending in EMEA held up better than in the Americas, which was hit particularly hard by the recession.  40% of respondents from the Americas reported that their budgets for 2010 were lower than in the previous year.   

   

Significantly, Asian markets showed the most budget growth in 2010 with nearly 60% of respondents reporting that they planned to increase their spending on broadcast technology products in 2010. This data is consistent with a recent survey conducted by the IABM and presented last week during a “state of the industry” session at IBC.  

Overall the past year or so has been tough for the broadcast industry. In 2010, just 34% of respondents reported that their broadcast technology budgets had increased versus the previous year.  32% reported that their budgets had stayed about the same, and 28% reported that their budgets had decreased, including 8% of respondents who said that their spending had declined by more than 30%.  

However, the indications are that the outlook for 2011 is better.  The question everyone wants to know is: when spending returns, where will money be spent?  

Traditionally, in the broadcast industry, major projects drive technology budgets, which in turn drive product purchase.  To help readers better understand how major projects are impacting technology spending, I recently wrote an article called Where is Money Being Spent in the Broadcast Industry? — A Review of Major Projects Being Planned, which provides some insight into broadcast CapEx on a global basis.  

In it, I showed the major projects that are being planned and budgeted for by more than 3,000 broadcast processionals – including radio and TV broadcasters, cable/satellite/IPTV operators, playout centers, post production facilities, and cable programmers.   

Here’s the chart from that article:  

  

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By a wide margin, more respondents selected “upgrading infrastructure for HD/ 3Gbps operations” than any other type of project.  In addition to upgrading infrastructure for HD/3Gbps operations, respondents also indicated that they plan to upgrade their transmission and distribution capabilities – presumably to support their transition to HDTV and to prepare for analog switch-off.  You can read the full post here.  

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What Will Drive Post Recession Broadcast Technology Spending?  

One of the key issues that broadcast professionals must ask themselves in a post-recession world is whether broadcast technology spending will be the same as the pre-recession days, or has there been a more fundamental shift.  

My suspicion is that things have changed – for both buyers and suppliers of broadcast technology.   

Broadcast technology buyers today remain for the most part risk averse, and many have shifted their focus.  They are focused on increasing efficiencies, and finding new ways to monetize content through initiatives like multi-platform content distribution.  At the same time I keep hearing the mantra that products have to “fit for purpose” and “good enough for the job” rather than the best.  

On the supplier side, vendors have also shifted their focus.  For one thing, many vendors seem to want to shift to a more software-centric model as IT technology continues its seemingly unstoppable progress.  At the same time, there is an increased emphasis on technologies that enable increased efficiencies through file-based workflows (in order to meet the needs of buyers mentioned above). However, some of the firms with leading expertise in software and file-based technologies are not necessarily the companies that were considered industry leaders pre-recession.  This leads one to imagine two scenarios – new leaders will emerge, or M&A among technology vendors will increase as larger technology suppliers look to bring much needed expertise in-house.  In reality both will probably happen, which means that the next few years will be interesting to watch.  

 

Transition to HDTV to Drive European Broadcast Project Spending

broadcast industry technology trends, broadcast industry trends, broadcast technology market research | Posted by Joe Zaller
Sep 20 2010

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.

Value for Money Rankings of Broadcast Technology Vendors — The Top 30 Globally

broadcast industry technology trends, broadcast industry trends, broadcast technology market research | Posted by Joe Zaller
Aug 27 2010

This is part of series of posts about the how the brands of broadcast technology vendors were ranked by respondents to the 2010 Big Broadcast Survey (BBS).

Each year as part of the Big Broadcast Survey (BBS), a global sample of broadcast professionals are asked to rank their opinion of a number of technology vendor brands on a wide range of metrics.  This information is used to create a series of reports, which through benchmarking and industry “league tables” enable these vendors to understand their competitive position in the market.

More than 5,600 people in 120+ countries participated in the 2010 BBS, making this the largest ever and most comprehensive study of the broadcast industry. In addition to measuring a variety of broadcast industry trends, more than 100 vendor brands (in 27 separate product categories) were evaluated by respondents.

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Recently, posts which rank broadcast technology vendors include:

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This post looks at how respondents ranked broadcast technology vendors for what is perhaps the most subjective driver we measured in the 2010 BBS — value for money.

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For some respondents value for money might mean low price, for others it might mean superior price/performance, while for others it could mean peace of mind in mission critical environments, regardless of the price.

Whatever the definition of value, the combination of a poor economy over the past few years and customer budget constraints have made many broadcast professionals more value-conscious than ever.  As a result, broadcast technology vendors must respond by continually delivering more value for less money.  This drives innovation in the broadcast supply chain as vendors are forced to compete on multiple levels.

Respondents were asked to rank broadcast technology vendor brands for “Value for Money” on a scale of 1-10 — with 10 being best in the market, and 1 being worst in the market.  The top 30 ranked brands for overall opinion are shown below for the global sample of all respondents.

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In all cases, these results are shown in alphabetical order, NOT in the order in which they were ranked by respondents to the survey. 

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Value for Money – The Top 30 Globally, Alphabetical Order

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There are a wide variety of vendors on this list, including large & small companies and those who produce audio & video products.  In order to better understand what drives the perception of value, we need to look at some of the factors behind these results.  These include the number of products produced by each vendor, the geographic location of the each vendor, and the types of product produced by the top 30 value companies.

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Number of products per vendor

When reviewing these results it’s important to understand how many products are produced by each vendor on this list.  This will help us to understand if whether reliability comes from small focused companies, or large multi-product vendors. 

The 2010 BBS evaluated 27 separate product categories.  In the previously published top 30 quality rankings, and top 30 reliability rankings, single product companies (those who were covered on only one product category in the 2010 BBS) completely dominated the rankings with about 2/3 of all positions.

A breakdown of how many product categories are produced by each vendor on the top 30 value list is shown below:

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Just over half of the vendors in the top 30 value rankings produce a product in only one BBS category (out of 27 measured).  This is slightly less concentrated that other findings, such as reliability where there were 21 single product companies in the top 30.

In the case of value, there is a mix of large and small, and single and multi-product companies.  It’s worth pointing out here that much of this list is made up of the industry’s largest multi-product vendors.  For example Grass Valley (10 categories), Evertz and Miranda (5 categories each), Sony (4 categories), Ross Video (3 categories), Apple, Black Magic Design, Cisco, For-A, Harmonic, Ikegami, Panasonic, and JVC (2 categories each).

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Geographic Location

Another factor to consider is the geographic location of each company on the list.  By this measure, companies headquartered in the Americas are the clear value for money leaders, while companies based in the EMEA and Asia trail the pack. 

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Keep in mind that when looking at geography, it’s important to remember that many of these firms are truly global, with offices all over the world, regardless of where they are headquartered.

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Product Categories

Finally, let’s look at the product categories produced by the vendors who made the top 30 value list for the 2010 BBS.

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Out of the 27 product categories covered in the 2010 BBS, 21 appear on this list. This is on par with other metrics. For comparison, there are 20 product categories in the top 30 reliability rankings and 23 product categories in the top 30 quality rankings.

Signal processing products lead the list of products produced by the top 30 value leaders.  This is a fiercely competitive market that is at the heart of the transition to HDTV operations, and customers look for both value and quality.  Cameras and audio consoles were close behind, while microphones, production switchers, routing switchers and video transport also made a strong showing.

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Please keep in mind when reviewing this information that, unless otherwise specified, all data these charts are presented in alphabetical order, not in the order brands were ranked by respondents to the 2010 BBS.  Also, the charts in this posting measure the responses of all 2010 BBS respondents, regardless of their company type, company size, geographic location, job title and budget for broadcast technology products.  

In order to get full value from this data, it is necessary to evaluate these results on a granular basis.  If you would like more information, please contact Devoncroft Partners.

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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.

Devoncroft Digest – August 15, 2010 – Earnings Galore, Broadcast Industry M&A Continues

broadcast industry trends, broadcast technology market research, Broadcast technology vendor financials, Devoncroft Digest, market research | Posted by Joe Zaller
Aug 15 2010

The Devoncroft Digest is a semi-regular amalgamation of news items I’ve seen recently that I think might be interesting / important for readers and clients. 

Due to my travel schedule it’s been two weeks since the last digest post.  Here are a few of the things that have caught my eye during this time.

Earnings Season Continues

We are now in the heart of earnings season, and a large number of tech vendors, platform operators, service providers and broadcasters.  For the most part these results have been generally positive, with many companies saying that they are seeing the green shoots of recovery taking hold. 

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Broadcast Technology Vendor Earnings

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Vizrt Q2 Revenue Rises 17%, CEO Says Market is Improving

Broadcast graphics and asset management provider Vizrt announced its Q2 and 1H results. Revenue for the quarter was up 17% y/y, driven by strong growth in the Americas, which was up 48% y/y.

Gross margins for the quarter were 65%, well ahead of the 58% that the company achieved during the same period a year ago. Broadcast graphics accounted for 72% of the company’s total revenues in 1H 2010.  According to the company, Vizrt’s graphics business is up 33% y/y.

Full details here.

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Chyron Q2 Losses Narrow as Revenue Jumps 20% 

Broadcast graphics provider Chyron announced its financial results for Q2 and 1H 2010.

Q2 revenue was $6.94m, up 20% versus Q2 2009.  Gross margins for the quarter were 70%, up slightly from the previous year.  Q2 product revenue was $5.4m, up 18% y/y.  Service revenue increased 29% y/y to $1.19m.  Service revenue accounted for 22% of the quarter’s total revenue. The company posted an operating loss for the quarter of $680,000, a 52% y/y improvement; and a net loss of $710,000, 35% better than a year ago.

Full Details Here

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Miranda Q2 Revenue Up 3% y/y, +11% q/q. CEO Says Market Conditions Improving

Broadcast infrastructure provider Miranda Technologies announced their Q2 2010 results.  Revenue for the quarter was C$32.1m, up 3% from the same period a year ago and up 11% versus the previous quarter.  International sales were up 11% y/y.  Sales in the US were up 10% y/y

The company’s net income jumped 173% to C$3.5m as expenses were reduced during the quarter, and EBITDA rose by 125% to C$6m versus the same period in 2009.  Gross margins were 60%, slightly down from Q2 2009, but up from 57.7% in the previous quarter.  This is a good showing in a competitive market, which the company attributes to a higher margin mix, and increased sales of routing switchers.

Full Details Here

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DivX Q2 Revenue Jumps 29%

DivX announced that its Q2 revenues were up 29% y/y and that its licensing business was up 23% y/y.  The company, which is in the process of being acquired by Sonic (who also announced their numbers recently) posted a GAAP Loss of $2.8m, and non-GAAP NI of $760K

Read the Divx earnings press release here 

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DG FastChannel Reports Record Q2

Advertising and broadcast content delivery specialist DG FastChannel reported record results for its FY2010 second quarter, blowing past the expectations of equity analysts. 

Revenue for the quarter was $60.3m, well ahead of the $55.6m consensus estimate of equity analysts.  This represents a 38% revenue increase versus the same period a year ago, and an increase of 11% from the previous quarter.  Net income for the quarter was $9m, up 150% increase versus Q2 2009 and up 12.5% versus the previous quarter.

Significantly, the company’s revenue from the delivery of HD advertising content increased 99% to $23.9 million versus the same period of 2009.

The company also that it retired all of its outstanding debt, thanks to a recent public equity offering that raised net proceeds of approximately $108m. As a result of this offering, the company reported that as of June 30, 2010, it has $79.6 million in cash and no debt.

Company Chairman & CEO Scott Ginsburg said “The Company continues to execute on its strategic business plan… revenue, margins, earnings and net debt show marked improvements during the second quarter.”

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Harris Broadcast Records $21m Operating Loss

Harris Corporation reported its Q4 and full year 2010 results.  While the company as a whole did well, the broadcast communications division continued to struggle.

For the full year, revenues from the broadcast communications division were down 17% versus the previous year.  For Q4, the company’s broadcast revenues were down just 1.9% y/y, although orders were down 12.5% versus the same period last year.

In the 4th quarter of FY 2010, Harris posted an operating loss of $21m.  According to the company, this “includes $7 million in charges related to cost-reduction actions and $6 million in inventory write-downs associated with weaker demand.”

Harris CEO Howard Lance said the following about the revenue of the broadcast division: “we continue to expect revenue in a range of $490 million to $510 million with break-even operating results. We expect to see continued operating losses in the first half of the year with profitability improving in the second half of the fiscal year.”

Full Details Here

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RealD Reports 1st Results As Public Company

3D specialist RealD announced its first results as a public company, and reported huge y/y increases in revenue and EBITDA, which were up 152% and 387% respectively.  The company announced that it has now deployed 7500 screens, significantly more than Technicolor, who announced recently that they have now deployed 250 screens, 

Read the RealD earnings press release here.

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Broadcaster & Platform Operator Earnings

DISH Network Reports Second Quarter 2010 Financial Results 

DISH Network reported total revenue of $3.17 billion for the quarter ended June 30, 2010, a 9.1 percent increase compared with $2.90 billion for the corresponding period in 2009.

DISH Network lost approximately 19,000 net subscribers during the quarter ended June 30, 2010, ending the quarter with approximately 14.318 million subscribers.

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Ascent Media Reports Lower Revenue, Higher Losses

Digital media service provider Ascent Media reported increased losses and lower revenue for the second quarter ended of 2010.  The company attributes the lower results to market volatility and lower capital spending by customers. 

Revenue for the quarter dropped 13% to $99.5m, while revenue for the first six months was off 11% to $204m.  The company said that the decline in second quarter and year-to-date revenue was driven primarily by a reduction in revenue from the Content Services segment.

Q2 losses from continuing operations before income taxes were $17.5m, compared to a loss of $12.4 million in the prior year period. Year-to-date, the loss from continuing operations before income taxes was $28.6 million compared to a loss of $23.2 million for the six months ended June 30, 2009.

 “Ascent’s year-to-date operating results have not met our expectations as uncertainty about the timing and pace of the economic recovery has led to ongoing volatility in the media marketplace,” said William Fitzgerald, Ascent’s CEO. “A consequence of the current environment is that our customers have continued to take a cautious approach to capital spending.”

Fitzgerald was more upbeat about the rest of 2010, saying “We are beginning to see positive indications of an upturn, including first half revenue improvement in our creative services business, a strengthening pipeline of feature film and other projects, and rising industry advertising estimates for the second half of 2010.”

Ascent’s full earnings press release can be found here.

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Scripps Reports Second-Quarter Results 

Scripps reported operating results for the second quarter of 2010 that showed a continuing trend of significantly improved year-over-year revenue performance in the television division – up 22 percent from last year.

You can read the Scripps earnings release here.

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Liberty Media Reports Second Quarter 2010 Financial Results

The Liberty Media press release is here.

Liberty Media investor conference call transcript here.

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DIRECTV Q2 Rev Up 12%, Net Income up 33% Buys Back Stock 

DTH satellite operator DirecTV announced that it grew revenues by 12% to $5.85Bn and Net Income 33% to $543 Million.

DirecTV Q2 Press Release Here

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Cablevision Systems Corporation Reports Second Quarter 2010 Results 

Cablevision’s Q2 profits fell by 30% but its revenues were up 5.8% to $1.802 billion versus the same period a year ago, which the company says reflects solid revenue growth in Telecommunications Services and Rainbow, offset slightly by a decline at Newsday. Consolidated adjusted operating cash flow grew 9.0% to $677.6 million and consolidated operating income grew 23.0% to $416.8 million, both compared to the prior year period.

You can read the Cablevision press release here

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WSJ.com – Net Rises at Time Warner Cable, Falls at Cablevision

According to a Wall Street Journal article, Time Warner’s second-quarter earnings rose 8.2% on solid revenue growth, but the nation’s second-biggest cable-television provider saw the same weakness in subscriber additions in July felt by its larger cable counterpart, Comcast Corp.

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News Corp Reports Q4 and Full year Results – TV Station Operating Income up 13%

News Corp’s Q4 revenue increased by 6% and it hauled in Net Income of $875m.  Significantly, the company’s TV Operating Income was up 13% versus the same period last year, driven by an improved TV station advertising market.

Here’s the full News Corp press release 

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CBS 2Q TV Station Revenue Climbs 31%

According to leading industry website TV News Check, TV station revenue at CBS jumped by 31%. The company also realized a 17% increase in local broadcasting revenue (TV stations plus CBS Radio) to $678.2 million from $579.5 million in the year-ago quarter. Sumner Redstone, the company’s executive chairman called the results “Terrific”

Full story from TV News Check

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Sinclair Broadcast Group Reports Q2 Results.

Sinclair Broadcast Group, one of the largest US TV station groups reported that its net broadcast Q2 revenues from continuing operations were up 19.3% versus the prior year.  The company had net income of $17.3 million versus $2.8 million in the prior year period.  Local net broadcast revenues, which include local time sales, retransmission revenues and other broadcast revenues, were up 16.6% in the second quarter 2010 while national net broadcast revenues, which include national time sales and other national broadcast revenues, were up 27.7% versus the second quarter 2009.

Full story from TV News Check

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WSJ.com – Discovery Turns In 40% Decline in Profit 

According to an article in the Wall Street Journal, Discovery Communications posted a 40% drop in its second-quarter profit, hurt in part by costs related to its recent $3 billion debt refinancing. Still, the cable-network operator showed revenue and operating-profit growth, and announced a $1 billion share repurchasing program.

Full article from the Wall Street Journal

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Barrington Sees 14% Jump In 2Q Revenue

Barrington Broadcasting Group announced that gross revenues for the quarter ended June 30 increased 13.6% to $32.7 million from $28.8 million for the same period a year earlier. The company said the increase was primarily due to 16.7% increase in national revenues, a 4.7% increase in local revenues, and an increase in political revenues of $900,000 to $1 million.

Full Story from TV News Check

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Gray Beats Street

According to TVB, Gray Television came in ahead of analyst expectations for the second quarter. The pure-play TV group posted revenues of $75.6 million for the 36 stations, up 16 percent from a year earlier. Net income was $534,000 compared to a loss of $6.6 million a year ago. After payment of $6.4 million in dividends, net loss to common stockholders was $5.9 million, or 11 cents a share.

Full Story from TVB

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Broadcast Industry M&A Continues

Blackmagic Buys Assets of Echolab

As predicted here last month, Blackmagic Designs announced that it has acquired “all the assets of Echolab,” putting Blackmagic in the production switcher business.

Echolab was forced into liquidation a few months ago when its primary shareholder stopped funding its operations.  The company had been in business for more than 35 years, specializing in low-end production switchers.

Blackmagic is buying Echolab for the latter’s ATEM product line, which was introduced about two years ago and has been continuously upgraded since under Echolab’s former CEO Nigel Spratling, who apparently not part of the Blackmagic deal and has now joined Ross Video in a marketing role.

This is great news for the affected Echolab employees, who were left jobless in an instant when the company shut its doors in mid-May.  It’s also good news for the industry, because the ATEM switcher product line, which looks like a pretty good product, will continue to be available through Blackmagic.  In fact, Blackmagic has said that it is adding to the engineering team responsible for ATEM.

It will be interesting to see how Blackmagic approaches the production switcher market, which is different than the company’s core post production market.  The part of the production switcher market where Echolab is active has considerable competition. In addition to Echolab, Sony, Panasonic, JVC, For-A and Ross Video are all very active players in this space.   

In addition to the competitive aspects of the deal, it seems to me that selling production switchers is a bit of a departure business-wise for Blackmagic.  Production switchers are a “high-touch” product category.  They are mission critical elements of the live production workflow, and as such they can require extensive demonstrations and training.  The majority of Blackmagic’s products are plug-in cards or stand-alone units, which are sold primarily through third-party dealers.  

At this point, I am unsure whether Blackmagic’s all-dealer sales approach is a positive or a negative for Echolab.  On the plus side, the compact HD production switcher market is a large and somewhat amorphous, running the gamut from broadcasters to corporation, to churches to education –  so it requires a large dealer network, which Blackmagic already has in place.  On the other hand production switchers require a specialized sales approach. Every buyer wants a demonstration, which typically involves shipping equipment and people, thereby increasing the cost of each sale.  Blackmagic will probably have to augment their approach somewhat in order to be successful selling production switchers.

Still if they can get the distribution right, Blackmagic may have a good chance of making their purchase of Echolab a success.  Blackmagic most likely paid very little for Echolab’s assets, and since it’s buying the assets and not the company, it gets a brand new HD switcher line, but not 35 years of legacy products that need support.  And Blackmagic does have experience buying distressed “traditional” vendors and changing their approach.  Last year, Blackmagic acquired leading color grading vendor Da Vinci Systems, and proceeded to radically change Da Vinci’s market approach, not to mention its pricing, turning a $200,000 hardware product into a sub-$1000 product according to TVB Europe.

Arguably however, Da Vinci’s color grading products (which are used off-line in post production) were easier to port to software platforms – and they still require a very expensive hardware controller.  Live production switchers are a different kettle of fish than off-line color grading systems for post production.  They are the key element of any live broadcast production, and they are still a relatively expensive hardware platform that requires specialist sales and support.

Blackmagic CEO Grant Petty is obviously familiar with this.  In the company’s press release that announced the deal he said: “I have been using live production switchers since I was in school where we covered local theater, sports, racing and bands. I think it’s the most exciting way to do production because it’s all live and thousands of people are watching what you are doing! Production switchers need to be powerful while also being familiar and easy to operate.”

Petty also said that “Since the acquisition, we have already dramatically expanded the engineering team working on ATEM. This fresh engineering team, which is a combination of new as well as experienced EchoLab staff, will allow us to move faster in adding new features to the ATEM product.”

Blackmagic will be displaying the ATEM on its booth at the IBC show next month. 

Here is a link to the full press release announcing the deal.

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Transcoding Consolidation — Telestream to Acquire Anystream

Over at his always informative Business of Video blog, Streaming Media’s Dan Rayburn writes that Telestream is to Acquire fellow transcoding provider Anystream from parent Gab Networks.  This is a deal has long been rumored, and according to Rayburn has now been confirmed by the management of both companies.

There’s been quite a lot of activity in the transcoding space recently.  Ripcode was sold to RGB networks and Elemental Technologies announced other week that it had raised $7.5m of new venture money, bringing its total to $14m

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Other Broadcast Technology Vendor News

Chyron Appoints New Chief Commercial Officer 

Chyron has appointed Susan Brazer as its new Chief Commercial Officer.  According to the company’s press release, Brazer has a big job, taking responsibility for “commercial strategy and all product and services revenues, directing its worldwide sales network of direct sales, resellers/systems integrators and joint ventures in Europe, Asia, Latin America and the Middle East.”

This is the second C-Level appointment recently.  The company previously announced that it had appointed Bonnie Barclay as VP and Chief Marketing Officer.

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New COO at Vizrt

Vizrt has appointed François Laborie as its new Chief Commercial Officer. Laborie replaces David Zerah who left Vizrt to become managing director of gaming firm Dragonfish.

Laborie joined Vizrt at the beginning of 2006 as the Company’s Executive Vice President Marketing. At the beginning of 2010, he took on the additional role of Regional President for the EMEA region.

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3D News

Technicolor announced this week that it has now installed its 3D system at 250 screens – good progress, but far less than clear leader RealD’s 7,500.

 

Mobile TV News

 According to an article in TVB,  Broadcast and WiFi Take Wind Out of FLO TV Sales 

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Other News

The Financial Times reports that News Corp has refused to refuses to raise its offer for BSkyB 

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Also in the FT, the BBC is under fire over Canvas project 

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Market Research Note of the Week:

Who are the Most Important Decision Makers in Broadcast Technology?  Vendors Predict Shift Towards Operations and IT

In a recent article, “Broadcast Industry’s Largest Market Study Reveals Most Important Technology Trends,” the move toward file-based, tapeless workflows was highlighted as one of the most important issues to broadcasters today.

But how will this shift affect how broadcast technology products are purchased, not to mention who buys them? Traditionally, these products have been purchased primarily by engineers. Will this be the same for products that are increasingly IT-based, or will there be a new set of buyers? Broadcast vendors need to know this because a new set of buyers may require a new market approach.

To find out, we asked the nearly 800 broadcast technology vendors who responded to the 2010 Big Broadcast Survey who they feel is currently the most important decision maker in the sales process, and who they feel will be most important in two to three years.

Let’s start with the most important buyers today. Respondents were asked, “When selling your products/services, which category of customer is typically the most important decision maker today?” According to responses, broadcast tech vendors see engineering staff as their most important customers, followed by operations, IT and finance personnel. Engineers are clearly seen as the most important decision makers, with operations staff a distant second.

But what about the future?

To read the full article, including four charts that break down the results, click here.

When it Comes to Purchasing Broadcast Technology, Who are the Most Important Decision Makers Today? Who Will it be in the Future?

broadcast industry technology trends, broadcast industry trends, Broadcast technology channel strategy, broadcast technology market research | Posted by Joe Zaller
Aug 11 2010

I recently wrote an article called Broadcast Industry’s Largest Market Study Reveals Most Important Technology Trends, which shows that the move towards “file-based / tapeless workflows” is one of the most important issues to broadcasters today.

But how will this shift affect how broadcast technology products are purchased, not to mention who buys them?  Traditionally these products have been purchased primarily by engineers.  Will this be the same for products that are increasingly IT-based, or will there be a new set of buyers?

Broadcast vendors need to know this because a new set of buyers may require a new market approach.

To find out we asked the nearly 800 broadcast technology vendors who responded to the 2010 Big Broadcast Survey who they feel is currently the most important decision maker in the sales process, and who they feel will be most important in 2-3 years.

 

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The Most Important Decision Makers Today

Let’s start with the most important buyers today. Respondents were asked “when selling your products / services, which category of customer is typically the most important decision maker today”

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Today, broadcast tech vendors see engineering staff as their most important customers, followed by operations, IT, and finance personnel.  Engineers are clearly seen as the most important decision makers, with operations staff a distant second.

These results are fairly consistent with vendors of all types, but as the table below shows, a look at these results in detail does highlight some variation.

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Vendor respondents based in Americas, along with those who primarily sell hardware products, currently see engineering staff as the most important technology purchasing decision makers.

Large vendors, and those that primarily sell software products, see engineers as marginally less important.  But even so most of these vendors still see engineers as their top customers today.

 

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The Most Important Decision Maker in the Future

When these same respondents were asked who they feel will be the most important decision makers in 2-3 years time, the results were different.  As the following table illustrates, broadcast technology vendors are anticipating a shift in the type of decagons maker they will be targeting in the future.

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In a fairly dramatic shift, operations staff are predicted to become the most important decision makers in the broadcast technology buying process, eclipsing engineers.  In these results, engineers fall from 48% to 31%, while operations increases from 28% to 33%.

Engineers will still be a very important part of the buying process, but vendors are predicting that the power of the engineer as decision maker will be diminished in favor of not only operations, but also IT and finance personnel.

These results are once again fairly consistent across all types of vendors, but there are some variations when one looks at the detail.

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Once again, those vendor respondents based in the Americas along with those who sell primarily hardware products, continue to view engineers as the most important decision makers in the future, albeit it at a reduced percentage versus today.

Respondents from EMEA along with those who primarily sell software, or a hardware/software mix, see engineers as much less important in the future.  Instead, these respondents view operations and IT personnel as their most important targets.

Respondents from Asia-Pacific see operations personnel as the most important decision makers, in contrast to those from the Americas where engineers are still seen as the top target.  Indeed 42% of respondents from the Asia-Pacific region see operations staff as the most important decision maker in the future (up from 31% today), while just 21% of respondents from the Americas see operations staff as most important. 

These findings are consistent with the industry trends that are most important to broadcast technology buyers, which I mentioned earlier.  As technology buyers complete their HD build-outs, their commercial focus is shifting towards achieving operational efficiencies and generating new revenue streams.  Thus operations, IT, and finance personnel will become an increasingly important part of the decision making process at broadcast technology buyers.

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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.

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