This is the first in a series of articles about some of the findings from Devoncroft’s 2014 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 2014 BBS, making it the largest and most comprehensive market study ever conducted in the broadcast industry.
Measuring the Most Important Trends in the Broadcast and Digital Media Technology Industry
Each year, Devoncroft Partners conducts a large-scale global study of the broadcast industry called the Big Broadcast Survey (BBS). Nearly 10,000 broadcast professionals in 100+ countries participated in the 2014 BBS, making it the most comprehensive study ever done in the broadcast industry.
One of the key outputs from the BBS is the annual BBS Broadcast Industry Global Trend Index. This is a ranking of the broadcast industry trends that are considered by BBS respondents to be the most commercially important to their businesses in any given year.
In order to ensure that the trends we measure each year in our research are the most relevant to the industry, we spend a considerable amount of time seeking feedback about the structure of our reports from a wide variety of industry professionals.
As part of this process, the composition of the BBS Broadcast Industry Global Trend Index is reviewed each year in conjunction with Devoncroft clients, broadcast technology end-users, and a variety of domain experts. New trends are added to the Index when BBS stakeholders believe that the value of this additional trend information outweighs the resulting distortion of the year-over-year comparisons.
Based on the input we received during the planning stages of the 2014 BBS project, it was decided that the following two trends should be added to the list of trends included in the composition of the 2014 BBS Broadcast Industry Global Trend Index:
- 4K / UHD
- Remote Production
The benefit of this change is that we were able to capture a significant amount of information about information about the perceptions of 4K/UHD and remote production, including deployment plans.
The downside of this approach is that the inclusion of new trends will almost certainly cannibalize the rankings of other trends in our Index. Therefore, it is slightly more complicated to make a 1:1 comparison of how trends were ranked in 2014 versus 2013 across different demographics.
The 2014 BBS Broadcast Industry Global Trend Index
To create the 2014 BBS Broadcast Industry Global Trend Index, we presented BBS respondents with a list of 18 industry trends and asked them to tell us which one trend they consider to be “most important” to their business, which one trend they consider to be “second most important” to their business, and which other trends (plural) they consider to be “also very important.”
We then apply a statistical weighting to these results, based on how research participants ranked the commercial importance of each trend.
Please note that our goal from this question is to help clients gain insight into the business drivers behind the respondent’s answer. Therefore, respondents were asked to rank these trends in the context of the commercial importance to their business, rather than “industry buzz,” or “cool technology,” or marketing hype.
The table below shows the 2014 BBS Broadcast Industry Global Trend Index.
Keep in mind that this chart shows a measure of what people say is important to the future of their businesses, not what they are doing now, or where they are making money today. These topics will be addressed in future posts.
Please note that this chart shows a weighted index, not a measure of the number of people who said which trend was most important to them.
Also, please note that this chart measures the responses of all non-vendors who participated in the 2014 BBS, regardless of company type, company size, geographic location, job title etc. Thus the responses of any demographic group such as a particular company type or geographic location may vary widely from the results presented in this free summary information.
The fact that multi-platform content delivery (MPCD) is considered by respondents to be the industry trend that is most important commercially to their business jumps off the page, and is perhaps not surprising, given the rise of on-demand video platforms, consumer mobility, and sales of smartphones and tablets. Indeed, across multiple studies, research participants have repeatedly told us that multi-platform content delivery is the trend that is most commercially important to their business over the next several years.
However, our discussions with broadcasters, content owners, and technology vendors indicate that despite the obvious fact that the way content is delivered and consumed has changed forever, this has not yet translated into profitable revenue streams for end-users. There are a number of reasons why this is the case, and these have significant implications for content owners, broadcasters, and technology vendors.
These will be addressed in future posts, as well as on the Devoncroft website.
Although multi-platform content delivery is by far seen as the most important trend in 2014, there are quite a few other interesting things to consider in the above chart.
Since the first BBS Broadcast Industry Global Trend Index was published in 2009, “multi-platform content delivery,” “file-based / tapeless workflows,” “IP networking and content delivery” and “transition to HDTV operations” have been the top ranked trends. However their relative position has shifted dramatically. For example, in 2009, the transition to HD operations was the #1 ranked trend globally, and MPCD was ranked #4. In 2014, these were ranked #6 and #1 respectively.
For a number of years the transition to HDTV operations has been a major driver of end-user technology budgets, and therefore technology product sales. The HD transition continues to be and is likely to remain one of the strongest drivers of broadcast industry revenue, particularly in emerging markets, but has this year dropped to the #6 position on a global basis.
We provide significant coverage of the global transition to HDTV operations in the 2014 BBS Global Market Report (report available for purchase). This includes a granular breakdown of the current and projected future progress that end-users have made in their transition to HD, as well as the upgrade plans for more than a dozen product categories including cameras, switchers, routers, servers, graphics, encoders, communication links, and encoders. We’ll also be publishing more information about project-based spending and the HD transition later in this report, as well as on the Devoncroft website.
Another trend that has become increasingly more important over the past several years is “IP networking & content delivery,” which is ranked as the #2 most important trend in the 2014 BBS Global Trend Index.
The move to IP-based infrastructure become increasingly important as broadcast technology buyers continue to look for efficiencies as they transition to new technical platforms and business models. In 2014, the move to IP-based infrastructure took on a new sense of urgency as buyers began to seek ways to implement IP-based systems in broadcast operational environments.
With new standards (e.g. SMPTE 2020-6), new market entrants (e.g. Arista Networks), and a high-profile joint task force on networked media (JT-NM), sponsored by the EBU, SMPTE, and VSF; the move to IP not only looks more and more inevitable, it is also likely to be a major industry driver over the mid to long-term. As a result, we believe that the coming move to IP (which is still at least a year or two away in practice) has profound implications for both broadcast technology buyers and suppliers.
The move to IP is driven by an ever-increasing desire for broadcast technology buyers to gain operational efficiencies. We believe this trend is set to accelerate, and will continue to be a strong macro driver of the overall industry for the next several years, as broadcasters continue to deploy new workflows.
The trend ranked #3 in the 2014 BBS Global Trend Index, “file-based / tapeless workflows,” is another indication of the importance of increased efficiency for broadcast technology end-users. This trend has accelerated as the transition to HDTV (ranked #6 this year) begins to wind down in developed markets around the world.
Over the past several years, we’ve observed a pattern whereby broadcasters, who have invested considerable time, effort, and money into transitioning their operations to HD, begin to shift their focus towards increasing the efficiency of their operations.
Over time, efficiency has become a key driver of broadcast technology purchasing. In fact, our research shows that in many cases, increased operational efficiency and cost savings are more important than cutting-edge technology.
This is because the economics of the entire industry have changed – because of MPCD and other factors – and as a result, end-users must change their cost structure (radically in some cases) in order to generate sustained profitability into the future.
This has implications for the broadcast industry in terms of both workflows and product procurement, and as a result, the importance of both file-based workflows and “IP networking & content delivery” has increased as broadcast technology buyers continue to look for efficiencies as they transition to new technical platforms and business models. The desire for broadcast technology buyers to gain operational efficiencies will likely continue to be a strong macro driver in 2014, as broadcasters continue to deploy new workflows.
The trend ranked #4 in the 2014 BBS Global Trend Index is “4K / UHD.”
2014 is the first year that we have included 4K / UHD as a component of the BBS Global Trend Index. It was added based on feedback from our clients, readers, and stakeholders. The fact that 4K / UHD is ranked #4 in the first year of its inclusion in the Index demonstrates that these requests were well-founded.
Although 4K / UHD is still in its early phases of deployment, many in the industry see it as the next major driver of infrastructure upgrades – similar to the transition to HD a decade ago.
While there is no doubt that 4K / UHD is a very important developments, we are skeptical that it will have the same impact on the industry as the transition to HDTV operations, which drove a massive wave of technology spending that lasted more than a decade.
Although episodic and documentary content has or will soon move to 4K/UHD acquisition and archive (because it extends the useful life of content assets), it will take time for 4K/UHD to move into mainstream live production environments such as news and sports. One reason for this is that it is still complex and expensive to create an entire live event in 4K/UHD, compared to today’s HD broadcast. Uncompressed 4K/UHD requires real-time processing at 12 Gbps, and the full production chain is not yet widely available. Another critical issue is that most 4K/UHD capable cameras utilize large format single sensors and cine-style PL-mount lenses. While the shallow depth-of-field produced by these acquisition systems is a perfect match for theatrical or drama production, it causes problems in live sports production, where depth-of-field is important to keep critical action sequences in constant focus.
Nevertheless, there’s no doubt that 4K/UHD is driving strong interest and excitement in the industry. However, it remains to be seen whether it will become a mainstream technology driver as HD has been, or whether it will go the way of 3D production, which caused huge excitement in 2010 before being relegated to near-non-existence just a few years later.
“Cloud computing / cloud based services,” is the #5 ranked trend (maintaining the same position as in 2013).
It seems that you can’t read anything about technology these days (broadcast or otherwise) without coming across some mention of “the cloud.” So why is something that is apparently so important to so many people not ranked higher?
For the past several years, it was apparent that there was not a clear understanding of how cloud technology would be deployed in the broadcast environment, and what benefits it would bring. This is still the case in many quarters in 2014, but this year our research shows that while there continues to be skepticism about the cloud (not to mention security concerns), the acceptance of (or at least the willingness to consider) cloud technology and services increased rapidly in 2014.
Indeed the Devoncroft 2014 BBS Global Market Report shows that Cloud Services / Cloud Technology is one of the fastest growing areas of project spending in the broadcast industry in 2014. This (paid) report also includes information about what technologies end-users are planning to deploy in the cloud, when they are planning to deploy them, and what efficiencies they hope to achieve by doing so.
For example, data from the Devoncroft 2014 BBS Global Market Report shows that Cloud Services / Cloud Technology has become one of the fastest growing areas of project spending in the broadcast industry this year.
Significantly more information about the attitudes of broadcast technology buyers towards cloud technology, and what broadcast technology buyers are likely to actually deploy in the cloud is available from Devoncroft Partners.
The #6 ranked trend in the 2014 BBS Broadcast Industry Global Trend Index is the “Transition to HDTV Operations.”
The transition to HDTV has been a huge driver of broadcast technology spending for more than a decade, but 2014 BBS respondents report that it is declining in terms of future commercial importance to their organizations. In 2014, the technology required for the transition to HDTV is well understood by the majority of the market, even those who have not yet made the transition.
Despite its gradual decline in the 2014 BBS Broadcast Industry Global Trend Index rankings, we believe that the HD transition will continue to be one of the most important industry drivers over the coming years. There are a number of reasons for this, but the most important is that there is still a long way to go in the HD transition on a global basis. Indeed, our research shows that 2014 is the first year that the total penetration of HDTV infrastructure has surpassed the 50% market for the global market.
Nevertheless, with the transition to HD having been a critically important driver for so many years, it begs the question of what’s next — as broadcast technology end-users in developed markets approach the completion of their HD transition, where does their focus (and spending) shift?
A review of the 2014 BBS Broadcast Industry Global Trend Index seems to indicate the answer lies in products and services that facilitate increased operational efficiency, and new revenue streams.
“Improvements in compression efficiency,” which is ranked #7 in the 2014 BBS Broadcast Industry Global Trend Index is consistent with the desire for increased efficiency. With content distribution models having migrated from single linear broadcast channels, to multi-channel Pay TV playout, to a totally on-demand environment, high quality compression is a critical success factor for broadcasters and content playout platforms.
A plethora of new channels, and the desire for simultaneous bandwidth saving and increased image quality for MPCD services have driven an increasing focus on high quality compression systems. For the past several years this has resulted in better MPEG-2 and H.264 compression products for primary distribution, contribution, and redistribution to consumers. H.265, aka HEVC compression technology holds the promise of further reducing the bandwidth required to deliver high quality images, particularly for 4K/UHD channels. However, it’s still early days for HEVC, and widespread deployments are still a year or two away. Nevertheless, it’s clear that for many end-users of broadcast technology, HEVC could be a game-changer.
In addition to creating greater efficiencies, end-users are also looking for ways to increase their revenue in an environment where the economic model of the industry is changing dramatically. Thus “video-on-demand,” which is ranked #8 in the 2014 BBS Broadcast Industry Global Trend Index, will continue to be a strong driver for content owners, media companies and broadcasters. The combination of MPCD, better compression technology, and an ever-increasing channel count, will continue to push video on demand deployment, whether via traditional broadcast and pay TV platforms, or over the internet or mobile networks.
The “move to automated workflows” is ranked #9 in the 2014 BBS Broadcast Industry Global Trend Index
Better compression technology and lower cost integrated playout platforms (aka “channel-in-a-box”), will facilitate an ongoing proliferation of new TV channels. This will in turn drive a focus on bringing highly automated operations to channel playout and master control environments. Thus we expect to continue to see a strong interest in the “move to automated workflows” over the next several years. Automated workflows are also seen as drivers of efficiency.
While efficiency is undoubtedly very important to end-users, actually making money through the monetization of the new automated channels that are coming on-line has driven a significant increase in focus on content monetization via “targeted advertising,” which is ranked #10 in the 2014 BBS Broadcast Industry Global Trend Index.
“Remote production,” which is ranked #11 in 2014 BBS Broadcast Industry Global Trend Index is another trend that is all about efficiency. Through the use of remote production, broadcasters can lower their costs of producing live events, whether they are as small as a local soccer match or as large as the World Cup.
Similarly, broadcasters and media companies can achieve enormous cost-savings through the trend ranked #12 in the 2014 BBS Broadcast Industry Global Trend Index, “centralizing operations,” including playout and transmission
Although it’s towards the bottom of the rankings at #13, “analog switch-off” is very important for those regions where it’s happening today – primarily as mandated by local governments. Our research shows that analog switch-off (also called “digital switch-over” in some territories) has driven huge waves of CapEx in those markets where it has already occurred.
As with previous years, the following trends were ranked towards the low-end of the Index: “transition to 3Gbps operations”, “transition to 5.1 channel audio”, “outsourced operations”, “3D TV” and “green initiatives.”
The information in this article is based on select findings from the 2014 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 2014 BBS, making it the largest and most comprehensive market study ever conducted in the broadcast industry. The BBS is published annually by Devoncroft Partners.
Granular analysis of these results is available as part of various paid-for reports based on the 2014 BBS data set. For more information about this report, please contact Devoncroft Partners
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