Last week I attended the 2010 IBC show in Amsterdam. The product introductions and events at the show have been well covered elsewhere, so this is just a short note on my impressions of the show.
After spending the better part of a week in Amsterdam, and having 40-50 meetings with vendors, bankers, broadcasters and others, I came away from the show with three general impressions – the market is improving, there is more realism about 3D, and the drive toward file-based operations continues.
It’s also worth noting that I think that these trends will probably act as a catalyst for further market consolidation as vendors seek to position themselves for the post-recession world.
Improving Market Conditions
In terms of market improvement, many people I spoke with said that buyers were coming back and that once-delayed projects are now table. Many vendors reported that their sales and profitability have increased markedly versus a year ago. Interestingly, there do seem to be geographic and technological differences in the market recovery. For example, many people reported that activity in Asia, northern Europe and the middle east was strong; while southern Europe and parts of north America were still sluggish for some. Also some types of products seem to have recovered more strongly – automation being a good case-in-point.
To get a better handle on the industry’s current status, I attended a very interesting “state of the industry” session hosted by the IABM (the international organization that represents technology suppliers), which was held on the opening day of IBC. During the session, IABM director general Peter White presented the results of a recent survey of broadcast buyers and suppliers. This was followed by a panel discussion that included representatives from Sony, Harris, Axon and Softel, with industry veteran Adrian Scott leading the session.
According to White, about 60% of broadcast technology suppliers are now making a profit – up considerably from last year – with European companies performing better in terms of profit performance.
White also reported that confidence has returned to buyers, with more than half of those surveyed feeling “very or quite optimistic” about the future; and 39% reporting that they feel that the recession is over or that they are coming out of it.
However, White also indicated that things will be different for vendors in a post-recession world. According to the IABM’s study, broadcast technology buyers are changing the way they purchase, and are also expecting more from vendors in terms of value, interoperability, support etc.
My understanding is that the IABM will be making their findings available in the near future, although I am not sure what for this will take. It’s good information that everyone should read.
More Realism About 3D
While 3D was a major theme of the IBC show, my feeling was that, in contrast to the CES and NAB shows earlier in the year, the hype about 3D seems to have dissipated as vendors have become more realistic about 3D’s ability to drive revenue and profitability growth.
In multiple press conferences and vendor meetings, the 3D hype was much toned down. For example, at the Grass Valley press conference SVP Jeff Rosica referred to 3D as a niche market. At the Harris press event, Broadcast Communications president Harris Morris referred to 3D projects as experiments.
I am on the record as a 3D skeptic, at least as far as the short term potential for broadcasters, so I was not surprised to hear this type of comments. I should also point out that these comments are consistent with our market research findings about the most important trends in the broadcast industry, where 3D placed far down on the list versus the transition to HDTV, the move to file-based workflows and multi-platform content delivery.
There is of course a small part of the market where 3D is and will continue to be a major growth driver. However, it looks like the bulk of the market is now taking a more realistic approach and focusing on what customers really need.
For more on this subject, have a look at Mike Grotticelli’s article in Broadcast Engineering called 3-D Technology Finds Few Enthusiasts at IBC2010.
IT and File-Based Technologies
It may seem obvious that IT and file-based technologies are continuing to make inroads into the broadcast market, but at IBC I was struck by the accelerating pace of change in this area.
Vendors, both large and small continue to innovate in this area in an effort to help broadcasters streamline their operations and do more with less.
The shift to IT technology is having an interesting impact on the industry, in the form of product development, M&A and outside investment.
On the product development front, some vendors have jumped into the file-based world with full force – e.g. Evertz who launched a full blown playout server and storage solution at IBC.
Others have sought to accelerate their move into the IT world through acquisition – e.g. Miranda’s purchase of OmniBus, which gives the traditional hardware supplier a highly developed IT-based playout and automation solution. Another recent industry M&A deal between Telestream and Anystream helped Telestream consolidate its position in the encoding / transcoding / streaming space. I would not be surprised to see more M&A in this area as traditional vendors seek to beef up their file-based expertise.
The move to IT has also helped bring new money into the industry. For example two transcoding vendors, Elemental Technologies and AmberFin both recently announced that they have closed funding rounds, which will help them expand their presence in the broadcast marketplace.