Posts Tagged ‘Broadband TV News’

Business Model Questions Linger As Broadcasters Shutter 3D Offerings in Favor of Multi-Screen Services

broadcast industry technology trends, broadcast industry trends, broadcast technology market research, market research | Posted by Joe Zaller
Jul 05 2013

Earlier this week the BBC announced that it will broadcast select matches from the Wimbledon Championships in 3D this year.  At that time, Kim Shillinglaw, Head of BBC 3D, said: “We’re delighted to provide live 3D coverage from the biggest matches of this year’s Wimbledon. Major UK sporting events are a big part of our trials with 3D content and this allows us to build on our work from previous Wimbledon Championships and the London 2012 Olympics.”

Now, Broadband TV News reports that the BBC is taking “a three-year holiday from the development of 3D programming with the corporation’s head of 3D admitting the UK public had not taken to the format.”

Broadband TV News quotes the BBC’s Shillinglaw saying “Watching 3D is quite a hassly experience in the home. You have got to find your glasses before switching on the TV. I think when people watch TV they concentrate in a different way. When people go to the cinema they go and are used to doing one thing – I think that’s one of the reasons that take up of 3DTV has been disappointing.”

Shillinglaw’s sentiments echo the statement made by ESPN last month and first reported by the Sports Video Group (SVG) that the leading US sports network was discontinuing its ESPN 3D service “due to limited viewer adoption of 3D services to the home.” ESPN went on to say that it plans on committing the resources currently assigned to 3D production to “other products and services that will better serve fans and affiliates,” specifically citing 4K (UHDTV) as an example.

At the time of the ESPN announcement, SVG said that the discontinuation of ESPN 3D raises serious questions regarding the future of 3D sports programming in the U.S. While Europe — especially the UK — has seen continued interest in live 3D sports, American consumers failed to adopt the format at a high rate.” The BBC’s announcement implies that UK consumer appetite for 3D is as lukewarm as it has been in North America, making it impractical for even a publicly funded broadcaster to continue with the format.

A remaining piece of the 3D puzzle is the 2014 FIFA World Cup, which will probably be the most watch global event of the year.  According to SVG, HBS (Host Broadcast Services), which will produce the world feed for the 2014 World Cup in Brazil, has yet to confirm whether the tournament will be produced in 3D.

 

Research Shows Commercial Importance of 3D Down, Multi-Screen Up

These announcements from BBC and ESPN are consistent with the findings of the Big Broadcast Survey (BBS), our annual study of the global broadcast industry.  In particular, the 2013 BBS Broadcast Industry Global Trend Index, reveals that multi-platform content delivery is once again the top industry trend for broadcast technology end-users worldwide, while 3D lags far behind in terms of its commercial importance to broadcast professionals.

Not only have research participants consistently told us that 3D lags other industry trends in terms of its commercial importance to their businesses, we’ve also found that 3D has become increasingly less important each year for the past several years.

For example, the chart bellows shows the chart below shows a comparison of the BBS Broadcast Industry Global Trend Index from 2012 and 2013.  It measures changes in how end-users ranked the commercial importance of industry trends on a year-over-year basis.

 

2013 BBS -- 2013 BBS Broadcast Industry Global Trend Index -- Red Box Around 3D (small)

 

Note that in this chart, 3D had the largest reported year-over-year percentage decline in commercial in both between 2012 and 2013.  This was also the case last year.

However, the above chart also demonstrates that while interest in 3D has waned, multi-platform content delivery is and continues to be the dominant trend in the broadcast industry, with more research participants citing it than any other trend as being most important commercially to their business.

The BBS’s plans for Wimbledon are further evidence of this.  The broadcaster said that it will make coverage of the tournament available on an increasing number of platforms, including ten live streams that will be available to PCs, mobiles, tablets and connected TVs.  The BBC will also offer three streams for “Red Button” for viewers on cable and satellite and Digital Terrestrial TV.

 

What about the business model?

Our research, as well as studies from many other firms, leaves no doubt that the popularity of multi-screen services in increasing.

However, it’s another matter to create a commercially successful business model in an environment where audiences are fragmenting, additional content preparation costs are required, and bandwidth providers charge steep fees for unicast delivery of video stream to consumers.

Delivering multi-screen services to consumers is a relatively straightforward process from a technical perspective. Monetizing content on multiple platforms, devices, and use cases is a different matter.

For example, in March 2013 Broadcasting and Cable magazine reported that one panelist at Next TV Conference said that multi-platform content monetization is still a ‘train wreck,’ although other did express “great optimism about the leaps technology will take in coming years.”

In our conversations with broadcasters, Devoncroft analysts have found that many broadcasters and media companies are indeed finding it a challenge to create a sustainable multi-screen business model with a margin profile similar to their traditional business.

The issue is that the shift to multi-platform has dramatically altered the economic model of the TV business. There are a number of reasons and examples why this is the case, but the end-result is that many broadcasters and media companies feel that in order to thrive in this new environment, they must radically change their cost structure.

The resulting decision these organizations will take will have significant implications for content owners, broadcasters, and technology vendors.

We’ll be addressing some of these in future posts on this website.
Some of the information in this article is based on select findings from the 2013 Big Broadcast Survey (BBS), a global study of broadcast industry trends, technology purchasing plans, and benchmarking of broadcast technology vendor brands. Nearly 10,000 broadcast professionals in 100+ countries took part in the 2013 BBS, making it the largest and most comprehensive market study ever conducted in the broadcast industry. The BBS is published annually by Devoncroft Partners.

Unless otherwise specified, all data in this article measures the responses of all non-vendor participants in the 2013 BBS, regardless of factors such as organization type, organization size, job title, purchasing and geographic location. Please be aware that responses of individual organization types or geographic locations may be very different. Granular analysis of these results is available as part of various paid-for reports based on the 2013 BBS data set. For more information about this report, please contact Devoncroft Partners

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Related Content:

Broadband TV News: BBC puts 3D development on hold

BBC Press Release: BBC confirms 3D coverage plans for Wimbledon

Sports Video Group: ESPN To Discontinue ESPN 3D by Year’s End  

Broadcasting & Cable: Monetization Still a ‘Train Wreck,’ But Shows Signs of Clearing

The 2013 Big Broadcast Survey (BBS) – overview of available reports, including covered brands and product categories

Largest Ever Study of Broadcast Market Reveals Most Important Industry Trends for 2013

Tracking the Evolution of Broadcast Industry Trends 2012 – 2013

Analyzing Where Money is Being Spent in the Broadcast Industry – The 2013 BBS Broadcast Industry Global Project Index

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© Devoncroft Partners 2009 – 2013. All Rights Reserved.

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Devoncroft Digest for the w/e May 21, 2010 – Echolab Liquidates, Earnings Season Continues, Bankers on Broadcast, Google Gets into TV

broadcast industry technology trends, broadcast industry trends, broadcast technology market research, Broadcast technology vendor financials | Posted by Joe Zaller
May 23 2010

Devoncroft Digest – Recap of the week ending May 21 2010

It was a busy week in the broadcast & digital media world.  Echolab was forced to liquidate, multiple companies reported their quarterly earnings (which were mainly positive), two investment banking houses published notes on the broadcast industry, and Google made a little announcement about their plans to transform the TV viewing experience.

Here’s a recap of some of the things that caught my attention this week

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Echolab goes into liquidation

Long-established broadcast production switcher vendor Echolab announced via email this week that the company has been put into liquidation by its owner.  Echolab, which has been in business since 1974, had been on the ascendance recently under the leadership of company CEO Nigel Spratling.   

Spratling revamped the company’s product line-up, which culminated in the launch of the Atem production switcher family.  At NAB 2010 Echolab announced that it had signed an OEM deal for the Atem line with the broadcast communications division of Harris (who has now removed the press release about the deal from their website). 

The email from Spratling said the company’s primary investor was no longer prepared to fund the company, and that the news was a great show to everyone.  

Read the full text of Spratling’s email.

 

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Viewcast losses narrow

Streaming technology provider Viewcast announced their results for the first quarter of FY’10. The company’s reported that their losses narrowed. Revenue for the quarter was up slightly versus the previous quarter, but down 13% versus the same period a year ago.  The company also filed an 8K with the SEC this week, detailing the compensation plans of their CEO and CFO.

 

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More Broadcast M&A — Tektronix acquires Mixed Signals 

Test & measurement leader Tektronix announced this week that it is acquiring Mixed Signals, a provider of digital content monitoring including digital services, transport streams, ad insertion, switched digital video and interactive content.

According to said Eben Jenkins, General Manager of the Tektronix Video Business, “The acquisition of Mixed Signals, Inc. brings to Tektronix a strong team that has delivered leading innovation to the video monitoring market. The combination of Mixed Signals and Tektronix accelerates our ability to provide unmatched next-generation video test and monitoring solutions to our customers.”

 

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Continued growth for Ross Video

Privately held Ross Video said in a press release Ross Video that the company had achieved 7% growth in the first half of its fiscal year.  Although private, Ross has been vocal about their success in the face of the economic downturn of the past 18 months.  During the IBC show last September, company CEO David Ross told the IBC Daily News that the company had continued to grow during the recession.  In the most recent press release, Ross says “We continue to buck the downward trend and have enjoyed some record months.”

 

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Vizrt posts operating profit on big revenue gains

Broadcast graphics and asset management vendor Vizrt reported that their revenue grew by 38% in the first quarter of 2010 versus the same period, but fell 9% versus the previous quarter.  The company made an operating profit of $200K during the quarter, versus a loss of 2.4m during the same period a year ago. Company CEO Martin Burkhalter issued an upbeat statement saying that “broadcast markets are slowly recovering and … that CAPEX budgets and discretionary spending are being restored.”  Burkhalter, who recently stepped into the role of CEO after the death of Bjarne Berg concluded by saying “In terms of revenues, we believe that we are heading back towards the levels we achieved prior to the global downturn and anticipate to reach these levels in the coming nine to twelve months.  With this recovery, we expect our profitability to improve as well.”

 

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Autodesk M&E revenue declines by 4%

3D animation leader Autodesk (the parent company of Discreet and others) posted strong revenues for the first quarter of 2010.  In the earnings press release, which breaks out financials by industry segment, the company revealed that revenue for its Media & Entertainment group was $46m in the quarter.  This is basically flat with the previous quarter and represents a 4% decline versus same period a year ago

 

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Trouble at JVC Kenwood

The Wall Street Journal also reported that JVC Kenwood Holdings fell 21% to Y38 on heavy volume after the company’s Friday announcement of its plan to submit a resolution for 1-for-10 reverse stock split at its upcoming shareholders meeting. One brokerage manager, citing past reverse stock split scenarios, said that without fundamental business improvements, it would be hard to expect the company’s stock to show long-term appreciation.

 

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DG FastChannel added to S&P SmallCap 600 index

Standard & Poor’s announced this week that it is adding DG FastChannel to its S&P SmallCap 600 Index.  DG FastChannel, who recently raised $100m in a secondary public offering, has been on a tear recently.  The company’s stock has more than doubled in the last eight months, and it recently reported record results for its first quarter based on increased advertising revenue. 

 

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Ascent Media CEO dies at age 44

Ascent Media this week announced the sad news that Jose Royo, the CEO of the company’s AMG subsidiary had died at age 44.  “José was a thoughtful and caring business leader, mentor, partner, and friend,” said William Fitzgerald, Chief Executive Officer of Ascent Media Corporation. “José played a significant role in the media services industry, where he left an indelible mark. He was truly passionate about Ascent, its customers, and its people. José was a wonderfully devoted husband to his beloved wife, and father to his two young children. Our thoughts and prayers are with them at this difficult time. José will be missed.”

 

 

Google, coming to a TV near you soon?

As covered extensively this week, Google has unveiled a strategy which it believes will transform the TV viewing experience by combining it with the web. The company has partnered with Sony, Intel and Logitech to create a new type of TV experience.  Watch this space.

 

 

TiVo and Technicolor Team Up to Offer Integrated PVR Solution

I have been a big fan of Tivo since buying their very first PVR in 1999 (which still works great, and in my opinion provides a significantly better experience than the alternative from my pay TV provider), so I was interested to see that the company has teamed up with Technicolor (formerly Thomson) for a new set-top box solution.  You can read the details here…

 

 

Two Investment bankers weight in on NAB 2010 and the broadcast space

Two boutique investment banks, Silverwood Partners and Pharus Advisors have recently published notes to clients detailing their impressions of the NAB 2010 show.  Both companies gave me permission to re-publish them here.

Silverwood has been involved in a number of broadcast M&A deals includingBlackmagic / DaVinci and Avid / Euphonix. Prior to the 2010 NAB show the company published, which is worth reading to get their full perspective on the broadcast market.  

Pharus has also been involved in a number of industry transactions including Neural and Virgin Media / Two Way Media. The company published their post-NAB thoughts in their industry newsletter, which also includes a summary of recent M&A transactions in the digital media space, and a comparison of publicly traded companies.

More info on this here…

 

 

3D news

Broadband TV News reports that UK satellite broadcaster BSkyB is bullish on 3D.  An article on the website says that Sky says there could be up to 1m 3D screens in UK by

Speaking of 3D, the Schubin Café website posted a link to an article which says that watching 3D can make you sick. 

 

 

Market Research Note of the Week:

What factors most influence the purchase of broadcast technology products?

Regardless of “how” broadcast technology products are purchased, what many in the industry want to know is “why” they are bought — i.e. what are the most important factors that influence the decision to buy one product over another.

When it comes to selling broadcast technology, there are several strategies that vendors have adopted. This includes positioning their offerings as having the best technology, the best feature set, the lowest cost, the best value, the best service, the most recommended etc.

But which factor is the most important to the most buyers?

To find out we asked several thousand broadcast professionals around the world what is most important to them when buying broadcast technology products.

You can see the results, including a chart that ranks 10 different factors that influence the purchase of broadcast technology products here…

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