What Tom Said: In a State of Flux
Our industry has been built on transitions from the early days. From black and white to color, standard definition to high definition, analog to digital and now from SDI to IP, the television industry has never stood still for too long. Some transitions focused more on the technology than the business models (i.e. the transitions to HD or the muchmaligned transition to 3D), while others—including the current move to IP—focus more on workflow and cost efficiencies. But the one element most of us can agree upon is that the changes undergoing our industry right now will have far more impact on the future of television than ever before.
That was among the several conclusions from a new report issued by IABM DC LLC, a joint venture between Internattional Association of Broadcasting Manufacturers and Devoncroft Partners in advance of this month’s IBC Show. The Global Market Valuation and Strategy Report summarizes the financial and technological status of our industry, covering approximately 3,000 technology vendors and service providers. Joe Zaller, CEO of research firm Devoncroft summarized the impact of IP technology on the future of the broadcast industry in philosophical terms: “A butterfly flaps its wings in Silicon Valley and now there’s a tidal wave of change heading towards the broadcast industry.”
Zaller characterizes the rate and influence of such changes as “profound,” adding that customers of broadcast technology products and services are undergoing a simultaneous business transformation that involves both production processes and content distribution, which are upending existing business models. The driver? The move to software-based products and services.
“The transition today is not about changing boxes,” he said. “In fact, in the future, there‘s not going to be as many boxes or they will be different. We are seeing a profound change.”
Looking at the numbers over the last five years, the report values the broadcast and video production technology industry at approximately $48 billion as of 2014, with an average growth rate for all markets and services in our industry of just under 3 percent CAGR (compounded annual growth rate) between 2009 and 2014. This was about average for our industry, according to Zaller. The market for products has experienced a significant slowdown since 2012, which he attributes to growth in service- based revenues, including the influx of software and cloud-based services, driven by new workflows and the increasing use of OTT as a means of content distribution.
This confirms what many of us have already known. The decreased emphasis on dedicated boxes and “forklift” upgrades in favor of cloud and virtualization have been well documented in these pages, with the mantra of “any content anytime anywhere,” driving the business models.
“What we’re seeing with the rise of OTT platforms is that the power has shifted from platforms like the cable or satellite bundle to content,” Zaller said. “And eyeballs follow content and money follows eyeballs.”
DC Police Chief to Keynote GV Expo
NewBay Media has announced that Cathy Lanier, chief of the metropolitan police department in Washington, D.C., will keynote the Government Video Expo on Dec. 3, focusing on the use of video cameras in police enforcement. Lanier has headed up the department since 2007.
The Government Video Expo takes place at the Washington Convention Center, Dec. 1–3. For more information, visit www.gvexpo.com.
Although the report provides a comprehensive analysis of where we’ve been in the past five years, predicting where we’re going is not as easy. Will content management and distribution become virtualized or move to outsourcing? Will IP technology make the market bigger or smaller from a technology perspective?
“It’s a very dynamic time in the market, however, from a forecast perspective, your crystal ball becomes very hazy when you’re trying to determine what comes next because there’s so much in flux,” Zaller concluded.
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Tom has covered the broadcast technology market for the past 25 years, including three years handling member communications for the National Association of Broadcasters followed by a year as editor of Video Technology News and DTV Business executive newsletters for Phillips Publishing. In 1999 he launched digitalbroadcasting.com for internet B2B portal Verticalnet. He is also a charter member of the CTA's Academy of Digital TV Pioneers. Since 2001, he has been editor-in-chief of TV Tech (www.tvtech.com), the leading source of news and information on broadcast and related media technology and is a frequent contributor and moderator to the brand’s Tech Leadership events.