Devoncroft Digest – Week Ending April 30, 2010
Is the market picking up? Good new outnumbers bad news for the week.
TVB reported that broadcasters have resumed their HD newsroom upgrades. The article lists multiple stations that have moved ahead with the transition to HD news. This is welcome news for broadcast vendors, and further reinforces my post-NAB thoughts that the market is picking up.
TVB also reported that, according to BIA/Kelsey, US broadcast station income will increase by 7.5% this year versus 2009.
Further signs of the market is improving were see this week with the four big US broadcast networks seeing a healthy increase in upfront ad sales. According to Media Post (via TVNewsCheck) Barclays Capital estimated a 20% jump in the upfront market, giving the Big Four broadcasters a combined $8.26 billion.
Earnings Season Continues
Earnings season is in full swing this week, with Arris, Belden, DivX, Dolby, Discovery and Harris reporting their results.
For the most part, the results were positive, indicating that the market has picked up:
- Belden announced strong results for their first quarter of 2010.
- Discovery Communications also posted strong earnings, beating analyst expectations. Both revenue and profits increased, with an especially strong showing in the international market
However, not all results were positive:
- Arris reported a revenue increase of 5% versus the same period a year ago, but its net income declined 11% versus the previous quarter. The stock was downgraded by several banks.
- The Broadcast Communications Division of Harris posted a $5m loss for the quarter and took a $1m restructuring charge. The company lowered guidance for the broadcast division for the full year and announced that it would be taking a further $6m restructuring charge in the current quarter in order to achieve further cost reduction.
Other interesting things this week:
According to the Wall Street Journal, RED Cameras has paid almost $20m for a house in Beverly Hills, CA that will be used for guests of the company. How do I get invited to that house warming party?
Google is reportedly working on Android-based software to enable set-top boxes, TVs and other devices to more content from the Internet. According to the Wall Street Journal Google’s move has attracted interest from partners that include Sony Corp., Intel Corp. and Logitech International SA, which are expected to offer products that support the software, these people said. None have so far discussed the efforts publicly.
Market Research Note of the Week:
How are broadcast technology products typically purchased – Direct from vendor, SI or dealer?
As part of the 2010 Big Broadcast Survey I asked several thousand technology buyers (including broadcasters, playout centers, cable/satellite/IPTV operators, education, film studios etc) in 120+ countries how they typically buy broadcast technology products – direct from a vendor; through a systems integrator; through a dealer; or some other way.
It turns out that there is considerable variation in the way broadcast technology products are purchased, with each category of buyer exhibiting different purchasing preferences.
These results help readers to better understand the channel structure in the broadcast market. They are interesting because they highlight that there are some times when it makes more sense for vendors to use a channel than go direct. They also show that there are some types of buyers who are more used to buying through the channel versus direct.
To see the results, including a chart that breaks responses down by company type, please click here.