Posts Tagged ‘broadcast industry market intelligence’

Media Technology Revenues Decline 4.3% in 2015 as Industry-Wide Structural Shift Continues

Analysis, broadcast industry technology trends, broadcast technology market research, Broadcaster Financial Results, market research, technology trends | Posted by Joe Zaller
Feb 24 2016

IABM DC releases 2016 Global Market Valuation and Strategy Report

The total market for media technology products and services declined 4.3% to $49.3bn in 2015, according to the newly released 2016 Global Market Valuation and Strategy Report (GMVR), published by IABM DC, a joint venture between IABM and Devoncroft Partners.

IABM DC Logo and GMVR Cover Image

A number of factors contributed to the year-on-year decline in media technology spending. These include significant currency fluctuations, ongoing consolidation among media organizations, the strategic move from CAPEX to OPEX as end-users evolve their business models, and for the first time in six years, negative growth in services as well as products.

Revenues in 2015 from Products¹ declined 4.4% to $22.01bn – 44.6% of total industry revenue.

2015 Services² revenues declined 4.2% to $27.31bn – 55.4% of total industry revenue.

While Product revenues have been in decline since 2012, this is the first year when Services revenues have also decreased since the inception of the GMVR.

For the four year period from 2012-2015, the compounded annual growth rate (CAGR) for the total industry was -1.0%. During the same period, the CAGR for media technology products and services was -2.4% and +0.1%, respectively.

Foreign exchange rate fluctuations had a significant impact in 2015. In Brazil and Russia, steep currency declines effectively doubled the prices for some media technology products thus deterring investment. Other currencies including the Canadian Dollar, Euro and Japanese Yen also declined versus the US Dollar, changing the competitive dynamic for many players. While many media technology suppliers have both revenues and costs in multiple currencies and are able to mitigate swings in foreign exchange to some extent, the same is not true for managed service providers that operate in a single territory. Much of the decline in Europe reported for the services segment results directly from the weakening of the Euro against the US Dollar in the period.

Other notable drivers for the decline in overall revenues range from the end of government-backed analog switch-off programs in many countries, to the ongoing consolidation of major media companies, to a pronounced shift in technology procurement strategies among end-users, including broadcasters, pay TV operators and media service providers.

These factors, and their impact on the market, are explored in more detail throughout the 2016 GMVR. Now in its seventh edition, the Global Market Valuation and Strategy report is an essential tool for all broadcast industry strategists. The 2016 edition provides market sizing data for approximately 150 product categories across nine market segments. Data tables provide regional splits for product and service revenues, as well as forecasts to 2019 at segment and sub-segment levels. The data tables are accompanied by extensive written commentary (available in Q1 2016), that discusses the drivers affecting the market and an analysis of how changing markets and technologies may shape the future composition of the broadcast and media technology industry.

Joe Zaller, founder and president of Devoncroft Partners, said, “The commercial models of many broadcasters and media companies have changed dramatically over the past few years. The combination of new digital and on-line delivery platforms, the shift to file-based workflows, the increasing drive for digital monetization, and the promise of COTS IT hardware managed by software defined networks have all been catalysts for an industry-wide rethinking of both what technology is required to support future business goals, and whether it will be purchased or outsourced. We believe these factors will continue to alter the structure of the industry through the end of our forecast period – 2019.”

Peter White, IABM CEO, said, “Although aggregate industry growth declined overall in 2015, the broadcast and media technology market is still undoubtedly a dynamic and exciting place to be. There was a significant impact on revenues overall from extensive weakening of most currencies against the US Dollar in the year, which particularly impacted services revenues in EMEA where there is a concentration of services suppliers. In addition, although revenues in the majority of product categories experienced a degree of decline, some segments of the market are growing strongly. The Global Market Valuation and Strategy Report illuminates this, and will make compelling reading for those companies that are looking to maximize business opportunities.

“The changing media landscape of the demand side of the industry is clearly affecting the supply side, and many organizations throughout the broadcast and media ecosystem have had to reinvent themselves. Despite a continuing downward trend so far in 2016, confidence still remains in the sector and spend on research and development is continuing at impressively high levels. We are experiencing a wave of innovation and change both from existing suppliers and from new entrants in the market which is fueling cautious optimism for 2016 and beyond; our industry clearly believes that it can win through and is backing itself to do so.”

¹Products include hardware, software and associated maintenance and support revenues.

²Services include systems integration, consultancy, post-production, services to live production, managed services, playout, CDN, Infrastructure as a Service, OTT/OVP platforms, and terrestrial and satellite transmission infrastructure.

 

About the Global Market Valuation and Strategy Report (GMVR)

Considered by many to be the definitive source for broadcast and media technology market sizing and trend analysis, the GMVR draws on actual and future projected revenue and product shipment data supplied by media technology vendors and service providers under a framework of strict confidentiality. In aggregate, the 2016 GMVR data model includes approximately 3,000 technology vendors and service providers.

The 2016 Global Market Valuation and Strategy Report is available to purchase from IABM or Devoncroft Partners.

 

About IABM DC LLC

IABM DC provides sought-after market intelligence on broadcast and digital media technology market-sizing data to suppliers and purchasers of media technology worldwide. IABM DC is a joint venture between broadcast and digital media vendor trade association IABM and Devoncroft Partners, an organization the specializes in broadcast and digital media market research, strategic consulting and analysis.

 

 

Related Content:

IABM DC — Digital Media Market Intelligence

Collaborative Market Sizing Initiative Reveals Structural Shift in Broadcast and Media Technology Industry

The IABM and Devoncroft Partners Announce Market Research Joint Venture

 

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

 

 

Wednesday Webinar to Provide Overview of Definitive Broadcast and Media Technology Market Sizing Report

Analysis, broadcast technology market research, market research | Posted by Joe Zaller
Aug 18 2015

Join us this Wednesday (August 19th) for a short(ish) webinar where Joe Zaller, founder of Devoncroft Partners, will provide an overview of the 2015 Global Market Valuation Report (GMVR).

Considered by many to be the definitive source for broadcast and media technology market sizing, segmentation, and forecasting, the GMVR is published annually by IABM DC, a joint venture between IABM and Devoncroft Partners.

The webinar will be held at 5pm CET / 4pm UK / 11am US EST / 8am US PST.

 

Attendance is free, and you can register to attend here.

 

GMVR Cover

 

The webinar will provide an overview of the research findings covered in the 2015 edition of the GMVR including a review of the drivers of the “structural shift” currently impacting the broadcast and media technology landscape.

 

Structural Shift in Broadcast and Media Technology Industry

 

In addition, the webinar will review the technology segmentation underlying the report model, and offer the audience the important background on the methodology behind the GMVR.

The 450-page GMVR draws on actual and future projected revenue and product shipment data supplied to IABM DC by technology vendors and service providers under a framework of strict confidentiality.  GMVR partners provided granular data submissions (under strict confidentiality), which detail their actual historic and future product revenue and unit shipments.  This data was anonymized and used to create the most comprehensive and authoritative reference on current and future market sizing for the sector. In aggregate, the 2015 GMVR data model covers approximately 3,000 technology vendors and service providers.

You can learn more about the GMVR and how to participate in future iterations of the report at the IABM DC website.

Should you have any detailed questions on the GMVR, please feel free to get in touch with representatives from IABM or Devoncroft Partners.. 

We hope you are able to join the webinar on Wednesday.

 

 

Related Content:

Register to attend webinar here

Collaborative Market Sizing Initiative Reveals Structural Shift in Broadcast and Media Technology Industry

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Collaborative Market Sizing Initiative Reveals Structural Shift in Broadcast and Media Technology Industry

Analysis, broadcast industry technology trends, Broadcast technology vendor financials, market research | Posted by Joe Zaller
Aug 18 2015

Evolving end-user business models alter industry economics, drive significant changes in technology buying patterns, product and supplier choice, and outsourcing

 

IABMDC Logo

 

Gloucestershire, UK and Coronado, CA —  Spending on products and services in the $48 billion broadcast and media technology industry shifted dramatically between 2012 and 2014, according to the newly released Global Market Valuation and Strategy Report (GMVR), published by IABM DC LLC, a joint venture between IABM and Devoncroft Partners.

Considered by many to be the definitive source for broadcast and media technology market sizing, and now in its tenth year, the GMVR draws on actual and future projected revenue and product shipment data supplied to IABM DC by technology vendors and service providers under a framework of strict confidentiality. In aggregate, the 2015 GMVR data model covers approximately 3,000 technology vendors and service providers.

2015 GMVR data provides clear evidence of an industry-wide change in buying strategies by media technology end-users such as content creators, broadcasters, pay TV operators, and service providers.

After experiencing a 4% CAGR (compounded annual growth rate) between 2009 and 2012, the market total for broadcast and media technology products and services slowed considerably between 2012 and 2014, achieving a CAGR of 1.3%.

 

 

 

Significantly, revenue from products (both hardware and software) declined by 0.5% between 2012 and 2014, while revenue from services increased by 2.9%.  During 2014, services accounted for approximately $26 billion, or 54% of total spending by broadcast and media technology end-users.

“The commercial models of many broadcasters and media companies have changed dramatically,” said Joe Zaller, founder and president of Devoncroft Partners.  “The combination new digital and on-line delivery platforms, the shift to a file-based workflows, the increasing need for digital monetization, and the promise of commercial-off-the-shelf (COTS) IT hardware managed by software-defined networking have been catalysts for an industry-wide rethinking of both what technology is required to support future business goals, and whether it will be purchased or outsourced. We believe these factors will continue to alter the structure of the industry through the end of our forecast period (2018).

These factors, and their impact on the market are explored in more detail throughout the 2015 GMVR.

Peter White, chief executive, IABM says: “Although aggregate industry growth has changed, this is undoubtedly a dynamic time for our industry.  Revenue in some product categories has shown a degree of decline, however other parts of the market are growing quickly. The changing media landscape affecting the demand side of the industry is having repercussions on the supply side as well, requiring a re-thinking of many business models. During this period of “metamorphosis” there has been a slowdown of investment by end users as they seek a clearer vision of the business model and product roadmap going forward. Despite this hiatus confidence remains high in the broadcast and digital media technology market, particularly with the emergence of the many new innovations and opportunities that we anticipate will have a positive impact on growth.”

A must-read document for all broadcast industry strategists, the 450-page 2015 GMVR provides market sizing data for approximately 150 product categories, across nine market segments. It includes extensive written commentary about the drivers affecting the market, and an analysis of how changing markets and technologies may shape the future composition of the broadcast and media technology industry. The data tables that accompany the written report provide and regional splits and forecasts to 2018 at the segment and sub-segment levels.

For more information, please visit the IABM DC website.

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About IABM DC

IABM DC provides sought-after market intelligence on broadcast and digital media technology market sizing data to suppliers and purchasers of media technology worldwide. IABM DC is a joint venture between broadcast and digital media trade association IABM and Devoncroft Partners, an organisation that specialises in broadcast and digital media market research, strategic consulting and analysis.

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Harmonic Revenue Dips 2 Percent in Q3 2012

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Oct 24 2012

Harmonic announced that its revenue for the third quarter of 2012 was $136.7m, down 2% versus the same period a year ago, and up 3% versus the previous quarter.

The GAAP net loss for the quarter was $8.2m, or $(0.07) per share, compared with a GAAP net income $3.5m or $0.03 per share last year, and GAAP net income of $17,000, or $0.00 per share last quarter.

Non-GAAP net income for the third quarter was $8.1m or $0.07 per share, versus non-GAAP net income of $12.7m, or $0.11 per share last year, and non-GAAP net income of $7.2m or $0.06 per share last quarter

The results were in-line with the company’s previously issued guidance of revenue in the range of $130m to $140m, and also in-line with the consensus expectations of equity analysts.

On a GAAP basis, gross margins and operating margins for the quarter were 44% and -1%, compared to 46% and 3%, respectively, for the same period of 2011, and 43% and -2% respectively last quarter.

Non-GAAP gross margins and operating margins for the quarter were 48% and 8%, versus 51% and 12%, respectively last year, and 48% and 7%, respectively last quarter.

Company CFO Carolyn Aver attributed the decrease in gross margins to product mix in the quarter, as well as shift of revenue to emerging markets where ASPs are lower.

 

On a product-line basis:

  • Video processing represented 37% of total revenue versus 41% last year, and 45% last quarter

 

  • Production and playout (Omneon) represented 17% of total revenue versus 19% last year and 16% last quarter

 

  • Edge and access revenue represented 29% of total revenue versus 28% last year and 25% last quarter.

 

  • Services represented 17% of total revenue, versus 12% last year and 14% last quarter.  This represents record service revenue for the company.  Aver said that service revenue grew 20% from the second quarter and 35% from last year’s third quarter. “Services in general and professional services specifically have been an area of focus for us. This quarter’s revenue represents the successful completion of several projects. I do expect that service revenue will decrease slightly in Q4,” she said.

 

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On a segment basis,

  • Cable was 50% of revenue, versus 45% last year and 48% last quarter.  The company said that demand from cable operators was particularly strong for its edge & products, and it believes it is gain market share in this area

 

  • Satellite & telco accounted was 20% of revenue versus 25% last year and 21% last quarter

 

  • Broadcast and media was 3o% of revenue, versus 30% last year, and 31% last quarter

 

Although the company did say it had won some multi-screen deals in the quarter, Harmonic CEP Patrick Harshman said that “customers are generally still struggling to find the right business model necessary to justify volume investments in multi-screen and over the top capabilities.”

International sales accounted for 58% of revenue in the quarter versus 51% during the same period a year ago, and 54% last quarter. This company said the increase is primarily a result of strong growth in Asia-Pacific and some emerging market growth, offset in part by year-over-year declines in Europe.

Harshman said that Harmonic continues to see strong growth in US from cable and telco customers, but that demand from US satellite and media companies was down year-over-year.

Bookings in the quarter were approximately $128.7m, down 9% versus last year, and down 8% versus last quarter.  The company said that new orders from Europe were down over 15% year-over-year, but that it gained market share in Europe, in cable, edge & access, and in multi-screen. Order growth in Asia and other emerging markets was “solid.”

Total backlog and deferred revenue was $137.7m at the end of the quarter, up 10% versus last year, and down 6% versus the previous quarter when it was an all-time high for the company.

  

Guidance:

Harmonic anticipates net revenue in the range of $132 million to $142 million for the fourth quarter of 2012. GAAP gross margins and operating expenses for the fourth quarter of 2012 are expected to be in the range of 44% to 46% and $60 million to $61.5 million, respectively. Non-GAAP gross margins and operating expenses for the fourth quarter of 2012, which will exclude stock-based compensation and the amortization of intangibles, are anticipated to be in the range of 48% to 50% and $55 million to $56.5 million, respectively.

 

“Harmonic delivered sequential revenue and earnings growth, and more than $20 million of cash from operations, in what continues to be a challenging economic environment,” said Harshman. “Our competitive position remains strong, and we believe we gained market share in both domestic and international markets. We also made significant progress on new product developments that position Harmonic to capitalize on the next wave of investment by our customers, including cable access (CCAP), high efficiency video coding (HEVC) for next-generation Internet-delivered and Ultra HD video, and a further strengthened solution portfolio enabling multiscreen video services.”

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Related Content:

Press release: Harmonic Announces Third Quarter 2012 Results

Harmonic Q3 2012 Earnings Call Presentation

Harmonic Q3 2012 Conference Call Transcript

Previous Quarter: Euro Weakness Offsets Strength in US for Harmonic in Q2 2012

Previous Year: Harmonic Reports Strong Q3 2011 Results, Driven by Strong Performance in Americas

 

© Devoncroft Partners.  All Rights Reserved

 

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