This is the second in a series of articles about some of the findings from Devoncroft’s 2015 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 2015 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 2015 BBS, making it the most comprehensive study ever done in the broadcast industry.
Firstly, we’d like to once again thank all the people who participate in the BBS each year. We’re thankful that you take time from your busy schedules to participate, and we love (and read all of) your feedback.
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 the most commercially important to their businesses in any given year.
In order to ensure the relevance of the trends we measure each year, 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 discussions with clients, end-users, and experts during the planning stages of the 2015 BBS project, we decided to maintain the same list of trends as contained in the 2014 BBS Broadcast Industry Global Trend Index. The benefit of this approach is a straightforward comparison of how trends were ranked in 2015 versus 2014 across all demographics.
After this review process, the decision was taken to not change the trends measured in the 2015 BBS. This enables a 1:1 comparison of trends on a year-over-year basis.
The 2015 BBS Broadcast Industry Global Trend Index
To create the 2015 BBS Broadcast Industry Global Trend Index, we presented BBS respondents with a list of 18 industry trends and asked them to identify the one trend they consider to be “most important” to their business, the one trend they consider to be “second most important” to their business, and the 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 2015 BBS Broadcast Industry Global Trend Index is shown below.
When reviewing the data presented above, readers should note the following about the 2015 BBS Broadcast Industry Global Trend Index:
- It is a measure of what research participants say is commercially important to their businesses in the future, not what they are doing now, or where they are spending money today (these topics will be addressed in future posts)
- The chart above is visualized as a weighted index, not as a measure of the number of people that said which trend was most important to them
- It measures the responses of all technology purchasers (i.e. non-vendors) who participated in the 2015 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 article.
Analyzing the 2015 BBS Broadcast Industry Global Trend Index
Multi-platform content delivery (MPCD) is cited by a wide margin as the most important trend commercially to respondent businesses. This is not surprising given the rise of new distribution mediums and devices. Indeed, across multiple studies, research participants have repeatedly stated multi-platform content delivery is the most commercially important trend 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 (with few exceptions) 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 implications are addressed later in this report, as well as on the Devoncroft website.
Although multi-platform content delivery is by far seen as the most important trend in 2015, there are quite a few other interesting things to consider in the BBS Broadcast Industry Global Trend Index.
For over the past decade the transition to HDTV operations has been a major driver of end-user technology budgets, and therefore technology product sales. The first BBS Broadcast Industry Global Trend Index, published in 2009, ranked the transition to HD as the #1 trend globally. In the seven years since, the transition to HD operations has drifted lower in the rankings based on the continued adoption of HD technology infrastructure globally. For the first time in 2014, the transition to HD operations was not ranked among the top five trends by respondents, instead ranking #6. In 2015, the transition to HD operations declined further, now ranking #8. However, within developing markets or smaller media markets within developed regions, the HD transition remains one of the strongest drivers of broadcast industry revenue.
We provide significant coverage of the ongoing global transition to HDTV operations in the 2015 BBS Global Market 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 fifteen product categories including cameras, switchers, routers, servers, graphics, encoders, and video transport. 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.
A trend that has increased in importance over the past several years is “IP networking & content delivery,” which is ranked as the #2 most important trend in the BBS Broadcast Industry Global Trend Index.
The move to IP-based infrastructure has increased in importance in response to several market developments. Based on our research, end-user motivations for moving to IP-based infrastructure are more nuanced than simply generating operational efficiencies, though this goal is an important component. Rather, end-user responses to the Big Broadcast Survey are consistent with a more encompassing goal of moving to fundamentally different technology infrastructures to better support evolving media business models.
While the move to IP-based infrastructure is still at the stage of early adopters in broadcast operational environments, there were several notable developments during 2015. These included the progression of interoperability standards (e.g. SMPTE 2022-6), the advancement of work from the joint task force on networked media (JT-NM) [sponsored by SMPTE, EBU, and the VSF], the creation of several individual vendor ecosystems (e.g. Evertz ASPEN), and the elevated activities by large IT providers (e.g. Cisco).
A transition to IP-based infrastructures is likely inevitable given the comparative size of the broadcast technology sector versus the broader IT industry. This greater size equates to far greater research and development resources. There remains, however, several obstacles preventing widespread adoption of IP-based infrastructure in the immediate term. For this reason we are expecting the move to IP to represent a major industry driver over the mid-to-long term.
Regardless of timing, the transition to IP-based infrastructure will have profound implications for both technology buyers and suppliers.
The #3 ranked trend in the 2015 BBS Broadcast Industry Global Trend Index is “4K / UHD.” 2015 is the second year the BBS has included 4K / UHD as a trend within the BBS Broadcast Industry Global Trend Index. It was added based on feedback from Devoncroft’s clients. The high ranking of 4K / UHD in both 2014 (ranked #4) and 2015 demonstrates these requests were well-founded.
Many in the industry believe 4K / UHD is the next major driver of infrastructure upgrades – similar to the transition to HD over a decade ago.
While there is no doubt that 4K / UHD is a very important development, the data collected in the 2015 BBS lends skepticism to the proposition 4K / UHD will have a similar 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 along with archive activities (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 is creating a live event in 4K / UHD is complex and expensive to create versus an HD broadcast. Uncompressed 4K / UHD requires real-time processing at 12Gbps, and the full production chain is not yet widely available. Another critical issue is that (until mid-2015) 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. There were several announcements by camera manufacturers during 2015 to address this issue with depth-of-field.
Nevertheless, there’s no doubt that 4K / UHD is driving strong interest and excitement in the industry. The question remains whether it will become a mainstream technology driver as HD has been, or whether it will only achieve penetration into technology infrastructure through the normal product upgrade cycle.
The trend ranked #4 in the 2015 BBS Broadcast Industry Global Trend Index, “file-based / tapeless workflows,” is a clear indication of the importance of increased efficiency for broadcast technology end-users. This trend has accelerated as the transition to HDTV (ranked #8 this year) begins to decline 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 2015, as broadcasters continue to deploy new workflows.
“Cloud computing / virtualization,” is the #5 ranked trend (maintaining the same position as in 2014 and 2013).
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 respects in 2015. However, similar to observations in 2014, our research shows that despite remaining skepticism about the cloud (not to mention security concerns), the acceptance of (or at least the willingness to consider) cloud technology and related services increased noticeable during the year.
But what are buyers of broadcast technology actually planning to deploy in the cloud, and do they actually trust cloud technology?
There is a substantial amount of additional data captured in the 2015 BBS on what technology segments end-users are deploying and planning to deploy cloud services, along with what efficiencies they hope to achieve by deploying cloud Services. This data is presented in the 2015 BBS Global Market Report (available for purchase).
Selected example data is provided in this free report from the Devoncroft 2015 BBS Global Project Index (see Part 2 of this report, starting on page 29). It highlights how cloud services / cloud technology is one of the fastest growing areas of project spending in the broadcast industry.
But what are buyers of broadcast technology actually planning to deploy in the cloud, and do they actually trust cloud technology? Perhaps more than any other topic, the industry’s plans for cloud have evolved considerably over the past several years.
For the past several years, we’ve been asking BBS respondents what they’ve already deployed, or plan to deploy in the cloud over the next 2-3 years.
As the chart below highlights, the answers given by BBS respondents over the past several years have changed over time, as cloud went from a non-issue, to a curiosity, to a top-5 project.
Today, we are hearing more and more from end-users about serious projects being deployed in the cloud, and many more are evaluating how to take advantage of the benefits offered by cloud technology.
But what are media technology end-users actually deploying in the cloud? This will be discussed in a future post.
“Improvements in compression efficiency,” which is ranked #6 in the 2015 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 (HEVC) compression technology holds the promise of further reducing the bandwidth required to deliver high quality images, particularly for 4K / UHD channels. Despite continued momentum in 2015, HEVC is still in early stages of adoption, though wider deployments are expected over the next 12 to 18 months.
In addition to creating greater efficiencies, end-users are also looking for ways to generate incremental revenue in an environment where the economic model of the industry is changing dramatically. Thus “video-on-demand,” which is ranked #7 in the 2015 BBS Broadcast Industry Global Trend Index, will remain a strong driver for content owners, media companies and broadcasters. The combination of MPCD, better compression technology, and an ever-increasing channel count, will drive video on demand deployments, whether via traditional broadcast and pay TV platforms, or over the internet or mobile networks.
The #8 ranked trend in the 2015 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 2015 BBS respondents report that it continues to decline in terms of future commercial importance to their organizations. In 2015, 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 2015 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 was the first year the total penetration of HDTV infrastructure surpassed the 50% mark 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?
The “move to automated workflows” is ranked #9 in the 2015 BBS Broadcast Industry Global Trend Index
Better compression technology and lower cost integrated playout platforms (such as “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 from new on-line channels has driven a significant increase in focus on content monetization via “targeted advertising,” which is ranked #10 in the 2015 BBS Broadcast Industry Global Trend Index.
“Remote production,” which is ranked #11 in 2015 BBS Broadcast Industry Global Trend Index is another trend that is focused on efficiency. Through the use of remote production, broadcasters can lower their costs of producing live events, whether a small local soccer match or the World Cup. Our research suggests that despite the potential for savings using “remote production” approaches for high-profile events, end-users are not yet comfortable adopting these approaches given the mission critical nature of the associated productions. Therefore, the greater adoption for remote production is lower-tier events with inherently constrained revenue opportunities.
Similarly, broadcasters and media companies can achieve enormous cost-savings through the trend ranked #12 in the 2015 BBS Broadcast Industry Global Trend Index, “centralizing operations,” including playout and transmission. A relevant example of centralized operations is the North American sporting leagues (including MLB, NFL, and the NBA) creating central facilities to handle the responsibility of in-game replays.
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 2015 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 2015 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 2015 BBS data set. For more information about this report, please contact Devoncroft Partners
© Devoncroft Partners 2009 – 2015. All Rights Reserved.