Finding Efficiencies Heads List of Tech Buy Motivators, Says IABM Report

The report also finds multi-platform content delivery is the top priority for media company tech buyers.
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GLOUCESTERSHIRE, U.K.—The quest to find new efficiencies remains the top motivator for media companies purchasing new products, while interoperability and agility continue to be important factors in guiding technology acquisitions, according to the newly released “Buying Trends Report” from the International Association of Broadcast Manufacturers (IABM).

IABM

To achieve those priorities, media companies are spending more on generic IT technology and increasing investment in in-house development that fulfills specific requirements. The transition to these generic platforms coincides with a reprioritization in spending that favors OPEX over CAPEX, the report finds.

The report, which analyzed the financial performance of media companies from July 2018 to December 2018, reveals a mixed bag, which may be contributing to the continued emphasis on finding new efficiencies.

While revenue for the second half of 2018 grew to 9.3%–up from 5.3% in the first half of 2018—profit remained negative for the latter half of the year at -2.4%, slightly better than the -2.6% registered for the January through June ’18 period, the report found.

New media and its direct-to-consumer offerings have placed traditional advertising and subscription-based business models under pressure. While profits fell for all organization types, the ad model finds itself under greater pressure than pay-TV, the report said.

A qualitative analysis of respondents to a pre-NAB Show 2019 buying trends survey also reveal important underlying currents cited in the report. While 78% of respondents reported strong confidence in the business environment (down 5 points from the previous report), 25% said their companies still derive 80% of their revenues from traditional broadcast operations, the report said. Most expect this heavy reliance on traditional broadcast to taper off in coming years.

In terms of specific technology types, multi-platform content delivery is the most important priority to technology users, followed by 4K/UHD.

“These results show that the demand side of the industry continues to go through a radical shift, with changing revenue models influencing the trends in media technology investment,” said Lorenzo Zanni, IABM head of Insight and Analysis. “Although technology investment has shifted to new priorities, technology has never been so key to driving business success in the multi-platform world. Buyers’ continued adoption of new technologies requires suppliers to move to new business models centered on the flexible provision of software. With change, the future is bright as greater investment is poured into content.”

IABM members can download the full report from the IABM website.