Changing fortunes

To say that the evolution of digital technology and computer-based applications in the broadcast industry has resulted in immense change is an understatement to the nth degree. We have all been challenged to keep up with new technology. And, if you do not adjust, you do not survive. Just look at some of the companies in our industry that did not make the necessary technology adjustments and, indeed, did not survive.

Survival of the fittest

At one time, the big three suppliers in the broadcast industry were Ampex, Harris and RCA. They dominated the industry and were the behemoth exhibitors at NAB. Ampex was a studio equipment supplier. Harris' offerings were primarily transmitters and antennas, but it also had a small line of audio equipment and accessories. RCA, priding itself on being a total equipment provider, had offerings in both the studio and RF market segments. Sony and Matsushita were yet to be found in the broadcast equipment marketplace, as NAB attendees from Asia were rare in those days.

As a side note, Sony — at that time strictly a consumer products company — found that the U-matic VCR it had introduced for the home market was simply too expensive. An internal competing design called Betamax won out for the consumer market. Therefore, Sony developed a strategy to create an industrial and then a broadcast market for U-matic.

Now, back to the big three. Ampex and RCA battled, particularly in the 2in VTR market, and Harris marched happily along in its bread-and-butter RF market. As Ampex progressed tape technology to 1in, RCA lacked such a development and signed a badging deal with Sony for its early BVH 1in product. Sony was never initially perceived by RCA to be a threat. When RCA branded Sony's BVH product, it quickly developed a reputation for high quality and reliability. RCA had unknowingly given Sony the stick to beat it with. With that stick, and in conjunction with the success of U-matic, Sony began to rise as a formidable competitor. In a move smacking of desperation, RCA, which had spent millions on the failed development of its own 1in machine, signed a resale deal with Ampex to sell its VPR 1in series.

The next development in broadcast VTR technology was the 1/2in size, with Sony's introduction of the first Betacam VTR. RCA, then at tenterhooks with Sony, approached Matsushita to essentially develop a broadcast version of VHS. With the consumer success of RCA and Matsushita's joint VHS activity, a strong relationship had developed, and Matsushita took on the challenge. Thus, the M format and subsequently MII were born to compete with Betacam SP. RCA, once the broadcast market's engineering, manufacturing and marketing leader, was then relegated to the resale of key bread-and-butter products — VTRs.

In October 1985, RCA announced its exit from the broadcast market. A decade later — after an initial foray into Matsushita's M format and then a complete reversal with the signing of an agreement to both manufacture and resell Betacam — Ampex also exited the broadcast industry.

Harris was still selling transmitters and antennas, a business without interest to Sony and Panasonic. Grass Valley and Tektronix were niche product players and thus began almost a decade of market dominance by companies with origins in the Far East. But ultimately, they too failed to heed one of George Santayana's most famous admonishments: Those who cannot remember the past are condemned to repeat it.

New competitors

The development and promotion of digital hardware and systems gave rise to a digital revolution in the broadcast industry, which opened the door to computer-based and software-driven processing technologies. Not truly recognizing the opportunity they were creating — and at that time lacking the software development expertise that existed in the United States and the UK — the Japanese hardware companies continued promoting their digital hardware. The rise then of a new generation of competitors, companies with a distinctive competence in software-based solutions, was thus unwittingly enabled.

A host of companies that either didn't exist or did not previously participate in the broadcast market suddenly appeared at NAB. Thus, the digital era for broadcast truly dawned. Harris — through both internal engineering investment and outside acquisitions — and Thomson — following the same path and through acquiring Grass Valley — also emerged as digital-era success stories.

Lessons to be learned

The history of the broadcast market yields many lessons. Be careful of your bedfellows. Never give your competition the stick with which to beat you. And perhaps the most important: Be prepared to eat your young lest others do it for you. If you don't replace even your most successful product, rest assured someone else will.

Anthony R. Gargano is a consultant and former industry executive.

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