Posts Tagged ‘NAB 2010 trends’

Recent Findings from the 2010 Big Broadcast Survey

broadcast industry technology trends, broadcast industry trends, Broadcast technology channel strategy, broadcast technology market research, Broadcast Vendor Brand Research, Top Broadcast Vendor Brands | Posted by Joe Zaller
May 26 2010

Recent Market Research Findings from the 2010 Big Broadcast Survey

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The Top 30 Broadcast Technology Vendor Brands, Ranked by “Overall Opinion,” Globally and Regionally

An overview of how broadcast technology vendor brands were ranked for “overall opinion” in the 2010 BBS. Results are shown globally and regionally

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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 is 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?

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Purchasing Preferences of Broadcast Technology Buyers – “Best-of-Breed” or “One-Stop-Shop?

How do buyers of broadcast technology products prefer to purchase: using a best-of-breed approach (evaluating products from multiple vendors) or a one-stop shop where one vendor provides a complete solution?

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How are broadcast technology products typically purchased — direct from vendors, through an SI or a dealer?

This article examines the way broadcast technology products are purchased, i.e., what purchasing channels are typically used by buyers of broadcast technology products.

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NAB 2010: NAB: Stations Focus On Web, Mobile, HDTV (TVNewsCheck Interview)

In this interview conducted by Harry Jessell of TV News Check, Joe Zaller discusses the major trends that are impacting US broadcasters, including the transition to HDTV, multi-platform content delivery and 3D.

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What Broadcast Buyers Are Evaluating for Purchase in 2010

This article focuses on the products that are being evaluated for purchase this year by broadcast professionals.  We presented technology buyers with a list of relevant product categories, and asked them to indicate which product type they are currently evaluating for purchase.

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Where is Money Being Spent in the Broadcast Industry? — A Review of Major Projects Being Planned

In the current environment, everyone in the broadcast business wants to know which parts of the industry are doing well, where money is being spent and what is driving this spending.

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Broadcast Industry’s Largest Market Study Reveals Most Important Technology Trends

This article looks at how respondents ranked a variety of technology trends in terms of importance to their business. This article presents the answers to this question in two ways: as a global trends index and by the percentage of respondents who indicated the importance of each trend to their business.

Two Investment Banks Offer Post-NAB Thoughts, Insight on Broadcast Industry

broadcast industry trends, broadcast technology market research, Broadcast technology vendor financials | Posted by Joe Zaller
May 18 2010

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 including Blackmagic / DaVinci and Avid / Euphonix. Prior to the 2010 NAB show the company published a 40 page report about the broadcast industry for their investment banking clients, 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 Audio / DTS 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.

 

 

Silverwood NAB Perspectives:

Revenue Flow versus Work Flow.  Broadcast and media customers are principally focused on sustaining advertising revenue from traditional outlets and driving incremental revenue over emerging outlets. The focus over recent years on cost containment through automation and technology efficiencies has been eclipsed by the need to adapt technology infrastructure to a changing business model.  The Newspaper industry provides an instructive lesson on the need to be responsive to external challenges to traditional business norms.  Technology vendors are faced with customers that have shifting purchasing priorities and that are scrutinizing expenditures on conventional broadcast infrastructure.

 

3D will not Reverse Industry Revenue Decline.  While 3D may drive some additional short term revenue, widespread adoption is still in question because certain content will never lend itself to the 3D medium.  Furthermore, with the exception of large screen environments showing purpose produced content (Avatar, Alice in Wonderland), the current 3D experience requires additional improvement.  There are no clear standards for end user devices (TVs and glasses) so mass end-consumer device adoption – if it is to occur – will take time.  Consider that the ongoing HD transition began with the first HDTV broadcast in 1998 and is still only 40% complete in the US market.  Lastly, production methods themselves must also adapt to the creation of 3D content – there is no consistency in the content acquisition process, much of which is based on trial and error and research.  3D requires a new approach in the creative production process as fast switching and cuts can prove to be nauseating to the viewer.  There are also concerns that poorly produced 3D will lead to negative customer perceptions in the near term which will slow adoption and the long term success of the medium.

 

Pricing is Collapsing.  Years of substantial profitability for media and broadcast customers masked poor cost discipline in the sourcing of technology.   Recent weakness in the advertising market and the broader economic disruption has caused customers to focus on capital budgets and look for more cost effective solutions.  Compounding this challenge, inexpensive general purpose IT infrastructure continues to replace purpose built hardware solutions, creating good enough solutions at attractive prices for many use cases.  This is putting pressure on margins for many traditional Broadcast technology vendors who organized their cost structures for the high price, ‘boom’ years and cannot adapt quickly enough to the changed industry circumstances.

 

Value Separation: Software, Hardware, Connectivity.  Historically, broadcast and post-production customers purchased purpose built solutions where the discrete software, hardware and connectivity components were blended within a hardware solution.  As the hardware portion becomes increasingly standardized, vendors will need to focus on defensible segments of the value chain, particularly within the software layer.  In many cases specialized hardware vendors are effectively software companies burdened with a legacy hardware orientation.  It is expected that vendors will need transformative change rather than evolutionary adaptation to address the fundamental changes in the media technology industry. 

 

Growing Software Opportunity.  It is expected that software companies will continue to be a growing presence in the media technology industry.  Differentiation from IT solutions for incumbent vendors resides in the software layer.  Well-positioned companies have software solutions that extend and leverage basic IT functionality, which will continue to improve in speed and capability.  From a product perspective, technology vendors should examine their product portfolios to identify and extract the unique software functionality that is truly differentiating their offerings.  In addition, the increasing use of standardized IT platform technology is creating a growing market for software vendors that can use the standardization to scale efficiently. 

 

Commercial Opportunity: Customer Diversification.  Well-positioned companies are diversifying and selling to a broader customer base, particularly customers outside the traditional broadcast market.   Targeting other industry verticals is not feasible with a customized hardware solution and an industry focused direct sales model.  In contrast, software solutions that extend standardized hardware and that are deployed through VARs and channel partners can be more easily adapted to large, adjacent industry verticals (Medical, Military, Enterprise).

 

Business Model Disruption.   For NAB exhibitors there remains fundamental weakness in the traditional broadcast technology industry.  The reduction in industry revenues will highlight one of the principal difficulties for many NAB exhibitors: sales and marketing expense is too high for revenue levels.  With pricing pressure, many vendors will need to change to a distribution model or become part of a larger solution that can support the fixed sales expense.   Well-positioned, well-capitalized vendors will have a unique opportunity to acquire established, respected brands with large user bases over the coming year.

 

Service Opportunity – Revenue Flow.  Broadcasters and media companies are faced with a proliferation of technologies and monetization possibilities, and an accelerating rate of technology change.  Historically, broadcasting challenges were solved by buying incremental technologies to plug into an existing well-understood technology infrastructure.  Current business challenges require business model innovation coupled with technology platform innovation to drive revenues across a growing range of end-point devices and outlets.  Given the lack of clarity on the optimal revenue model and the rapid pace of technology change, broadcasters and media customers are reluctant to invest in standalone technology purchases.  This is creating an attractive service opportunity driven by the ability to provide incremental revenue growth with a low barrier to entry, a receptive customer and an attractive ROI.

 

 

 

 

PHARUS ADVISORS

PUBLIC MARKET AND M&A UPDATE ON MEDIA AND BROADCAST TECHNOLOGY INDUSTRY

NAB OVERVIEW

We recently attended the NAB 2010 conference in Las Vegas. We came out of the conference feeling the media and broadcast technology market is experiencing a healthy recovery from 2009. The recurring comment echoed by many industry players was that the deals in the customer pipeline that were stalled in 2009 are now morphing into real opportunities. The RFP activity is showing decent improvement, however, the sales‐cycle continues to be long and spending not completely flowing.

Even though the network spending in North America, which was driven by conversion to HDTV over last few years, is slowing, other factors like changes in customer preferences, and pressure to generate new sources of revenues and reduce costs are expected to continue to drive technology capital expenditure for networks. These new developments are adding new dynamism to the sector, which can be witnessed by the plethora of vendors and solutions.

Here are some of prominent themes that we witnessed at the NAB show this year.

  • Emergence of 3D television broadcasting: As expected, this was the major theme at NAB similar to what was the case at CES earlier this year. TV manufacturers continue to be enthusiastic about this trend. CES expects 4.3 million 3D TV sets to be sold in 2010, with about 25% of total TVs sold in 2013 to be 3D‐enabled. Even though some major players (like DIRECTV, Discovery, IMAX, and etc.) have made announcements over last few months about launching 3D content, a lot of the content producers and broadcasters are still not sure about how quickly this market opportunity will grow in the near term. As a result, they tend to be reticent to make investment in this area at this point.

 

  • Development of multi‐platform content distribution (broadcast, web and mobile) capability: The spending on TV advertising is gradually declining. According to Yankee Group, the TV ad market declined 21.2%, from $52 billion to $41 billion, between 2008 and 2009. During this same period spending on Internet advertising grew as a result of consumers spending more time online and less time watching TV. With more and more eyeballs consuming video content on Web and mobile devices, broadcasters are investing in technologies which enable delivery of content over multitude of platforms.

 

  • Adoption of file‐based workflows: One of the important areas of investment for broadcasters remains implementation of file‐based workflow infrastructure. This is viewed as important by broadcasters to augment flexibility in day‐to‐day operations, facilitate reduction in operational costs, and enable efficient multi‐platform content distribution.

 

Emergence of Over‐the‐Top (OTT) Video and convergence of TV and Internet: The other recurring trend at the show was the focus on growing convergence between broadcast TV and Web video. Internet users are increasingly interested in streaming full length video directly onto their TVs and as a result variety of models are appearing to provide consumers with this capability. According to report by Tender Research from October 2009, about 7% of households will forgo Pay TV subscriptions by 2012 in favor of OTT services and free over‐the‐air television. OTT market is moving very fast with proliferation of enabling devices like Roku, Xbox, and a range of new HDTV models and growth of online video sites such as Hulu, Netflix,

Devoncroft Digest — Week Ending April 30, 2010 — Good new outnumbers bad news for the week

broadcast industry technology trends, Broadcast technology channel strategy, broadcast technology market research, Broadcast technology vendor financials | Posted by Joe Zaller
Apr 30 2010

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.

Devoncroft Digest: A Busy Week for Broadcast Technology Suppliers

Broadcast technology vendor financials | Posted by Joe Zaller
Apr 23 2010

In a week when many in the broadcast industry were busy following up from the NAB show (and quite a few volcano-stranded travelers still struggling to make it home from Las Vegas),  there was quite a bit of activity among broadcast suppliers.

Here are a few highlights:

* Barco reported that the company has “returned to profitable growth.” In the company’s earnings announcement, CEO Eric Van Zele said he is “cautiously optimistic” about the remainder of 2010.  The company also published a 20 page quarterly report in e-book form.

* Avid reported their Q1 FY10 earnings this week.  Losses narrowed on y/y revenue improvement, but the stock was still downgraded by JP Morgan.   Avid also announced that it has completed the acquisition of audio console vendor Euphonix, which was announced last week at the NAB show.

* Storage vendor Isilon released their Q1 FY10 numbers, which saw revenue increase 5% sequentially and 46% versus the previous year.  The company’s stock shot up on the news.  Isilon also filed its 10Q with the SEC.

* Wegener was delisted by the NASDAQ and will now trade on the OTC BB

* Privately held UK-based broadcast systems integrator TSL was ranked #77 in the Sunday Times “Profit Track 100.”  According to the poll, the company’s profits have grown at 47% to £4.28m.

* Harmonic was sued by Arris over VOD patents

Brief Thoughts on NAB 2010

broadcast industry technology trends, broadcast technology market research | Posted by Joe Zaller
Apr 20 2010

Like thousands of others (some of whom are still there because of the Icelandic volcano), I spent last week at the NAB show in Las Vegas.  The events of the show have been well covered elsewhere, so this is just a short note on my impressions of the show.

After a week in Las Vegas and more than 40 meetings with vendors, bankers and broadcasters, my take-away from NAB was not about any one technology, company or product. Instead it was the general feeling that the tide has turned, and that things in the industry are starting to improve. 

Most vendors conceded that 2009 was less than stellar, but several companies such as Pilat Media, Ross Video, and Utah Scientific reported that they saw growth and made money in 2009. 

The question is whether 2010 will be better for the industry as a whole.  Many vendors I spoke to at NAB reported many projects did not go away, they just “moved to the right”, and that some projects which had been shelved are now back on the table.    In an industry where major projects drive product purchase, this is reassuring news for the battered supplier community.

Prior to NAB, and at many of the booths and press conferences during the show, the majority of attention seemed to be focused on 3D.  Yes there was a lot of 3D at the show, but as reported by Ken Kerschbaumer at the Sports Video Group, It Wasn’t All About 3D (Seriously!) As Exhibitors See Bounce in 2D Business.

As I have said previously, I am skeptical about 3D at least for the near term. Despite the hype, it’s just not that important commercially to most broadcast professionals.  My recent global study of the broadcast market found that the most important industry trends in the broadcast industry are about completing what’s already been started (transition to HDTV operations), cutting costs while creating efficiencies (file based / tapeless workflows), and creating new revenue streams (multi-platform content distribution).  If you look at the 2010 Global Broadcast Trend Index, you’ll see that 3D is near the bottom in terms of commercial important to broadcast professionals.

TV Tech Interview with Head of Harris Broadcast Business Reveals Mobile DTV Revenues

broadcast industry technology trends, broadcast technology market research, Broadcast technology vendor financials | Posted by Joe Zaller
Apr 09 2010

TV Technology magazine recently published an interview with P. Harris Morris, the new head of the Harris Broadcast & Communications business unit.

In the interview with TV Tech, Morris talks about the broadcast business, gives an overview of company’s NAB plans and discusses their interoperability labs in the US, Canada and the UK.

Most interesting to me is that towards the end of the interview when the subject turns towards mobile DTV, Morris reveals that the company has “delivered more than 45 systems nationwide already and, at the upcoming Washington, D.C., Mobile Consumer Showcase, our systems will be used in at least six of the eight over-the-air broadcast stations.”

Morris then goes on to say that he “wouldn’t be surprised to see 100 to 150 more stations roll out mobile capabilities during the next year.”

As I said in January just after returning from CES, and more recently while being interviewed by Harry Jessell, the market hype may be about 3D, but for US broadcasters and the vendors that sell to them, there’s much more action in mobile. It looks like Harris is one of the companies that’s taking advantage of this trend and turning it into significant revenue.

I’ve been told by broadcasters that the incremental cost of enabling mobile DTV broadcasting (for a station that has already made the switch to DTV) is about $150,000 per station.  Thus the numbers in the TV Technology interview with Mr. Morris indicate that Harris has already brought in revenue of ~$6.75m from mobile DTV; and the company has the potential to sell an additional $15m – $22.5m worth of this technology over the next year.  Even if the $150K per station estimate is high, there is still good money here for Harris and the other companies who are targeting this space.

TV New Check “Tech One on One” Interview

broadcast industry technology trends, broadcast technology market research | Posted by Joe Zaller
Apr 08 2010

I was recently interviewed by Harry Jessell, editor of industry website TVNewsCheck.com about my 2010 study of the broadcast market.

Jessell published the interview today as part of his “Tech One on One” series, which profiles key technology players in the broadcast market.  In it he asks me a number of question about industry trends, major projects being planned by US broadcasters, the capex plans of broadcasters, and which product categories I thnk will do well this year based on my research.  We also discussed 3D, which as I’ve said before,  I am skeptical about when it comes to the average US broadcaster.

You can find the full interview here.

What Broadcast Buyers Are Evaluating for Purchase in 2010

broadcast industry technology trends, broadcast technology market research | Posted by Joe Zaller
Apr 08 2010

This is the third in a series of articles about the findings from the 2010 Big Broadcast Survey (BBS), a global study of industry trends, technology purchasing behavior and the opinion of vendor brands.  With more than 5,600 people in 120+ countries participating, the 2010 version of the BBS is the largest and most comprehensive market study ever done in the broadcast industry.

NAB 2010 is less than a week away, and as the industry prepares to gather in Las Vegas for its biggest event of the year, the question on the minds of many is what technologies are in demand by customers around the world.

In previous posts I have discussed the most important technology trends in the broadcast industry and examined where money is being spent in the broadcast industry in terms of major projects planned for the year.

These industry trends and major projects drive technology purchasing in the broadcast industry, and that’s the focus of this article — the products that are being evaluated for purchase this year by broadcast professionals.

As part of our 2010 global market study we wanted to help our readers understand what broadcast professionals around the world are shopping for this year.  We presented technology buyers with a list of relevant product categories, and asked them to indicate which product type they are currently evaluating for purchase. 

The results, which are shown in the table below, demonstrate a broad range of industry demand.

 What broadcast technology products / services are you currently evaluating for purchase? 

These responses show that production technology such as editing, ENG cameras, along with test & measurement and key audio products will be in demand around the world as broadcast professionals upgrade their facilities to HDTV operations, which was ranked #1 in terms of planned projects for the year (link to article).

The transition to file-based / tapeless workflows will be facilitated by purchases of production servers along with transcoding products, which facilitate multi-format interoperability in the file-based domain.

The new studios, OB vans and channels that are being planned will drive evaluation of a wide variety of equipment including multiviewers, servers, signal processing, routing switchers and storage.

A significant number of respondents indicated that they are currently evaluating products that increase operational efficiency and streamline working practices.  These include library / storage management, automation and workflow / asset management.

Video transport and transmission gear should also see strong demand as customers around the world seek to use improve compression efficiency, connect operations by IP links, and increase the number of channels delivered to consumers.

Keep in mind when reading this information that this table presents the responses of all global participants in the 2010 BBS, regardless of organization type, size or location; and shows the number of respondents that are evaluating products without regard to size of project or value of purchase.  Granular analysis of these results, including breakdown of data by geographic region, customer type and customer size, is available as part of the full 2010 BBS Global Market Report from Devoncroft Partners.

Published by Devoncroft Partners, the annual Big Broadcast Survey (BBS) is the largest and most comprehensive studies of broadcast industry trends and technology vendor brands.  The BBS provides insight into market trends, technology budgets, plant, equipment upgrade plans, and the perceptions of leading broadcast industry vendor brands by a wide variety of broadcast professionals across the world.  It also delivers vendor brand ranking “league tables” in a variety of product categories; all of which can be segmented by geography and customer type.  More than 5,600 people in 120+ countries participated in the 2010 BBS project. Information about the 2010 BBS can be found at www.devoncroft.com

 

Two Broadcast M&A Deals: HME Buys Clear-Com, EVS Buys OpenCube

broadcast technology market research | Posted by Joe Zaller
Apr 06 2010

Two broadcast industry M&A deals have been announced since I wrote last week about the 40 page note put out by boutique investment bank Silverwood Partner, which says that vendors in the broadcast industry need to consolidate.

Last Friday HME announced that is acquiring Clear-Com from Vitec, a move that will strengthen their position in the broadcast intercom / talkback market.

Today EVS said that is is buying MXF specialist OpenCube, a bolt-on acquisition that brings additional file-based and MXF expertise in-house.

There have also been a number of industry partnerships announced such as the deal between Harris and Echolab, which sees Harris reselling Echolab production switchers.

NAB 2010 is now a week away, and it’s common that these deals are announced around major trade shows. It will be interesting to see if there are more deals coming.

Compact HD Production Switcher Market Heats Up

broadcast industry technology trends, Broadcast technology channel strategy, broadcast technology market research | Posted by Joe Zaller
Apr 05 2010

There is a lot of activity these days in the in the compact broadcast production switcher market.

Harris and Echolab announced today that Harris will exclusively resell Echolab’s Atem compact production swithcer.  As part of the deal, Echolab’s Atem will be demonstrated on Harris’ NAB booth, integrated with Harris graphics products.

With the Harris-Echolab deal, there is a lot of activity in this part of the market:

 

Clearly this is a market that everyone wants to get in on.

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