Sporting events in 2018 to help push broadcast tech sales in UHD and VR says IABM
The IABM international trade association for suppliers of broadcast and media technology has released the first of its new format Supply Trends Reports, and it seems sporting events over the course of 2108 are helping push sales of ultra high definition (UHD) and virtual reality (VR).
Covering the six months to December 2017, the Supply Trends Report combines actual financial data on the broadcast and media supply sector drawn from public and private sources with survey evidence from members on current trends, issues and sentiment.
Year on year sales in the broadcast and media technology market grew by 1.2% in December 2017, with SMEs’ performance improving at a faster rate than large companies for the first time in several years. But while sales improved slightly, profit growth continued to slow, running at 75.9% of the December 2016 level.
Lorenzo Zanni, IABM lead research analyst, commented on why smaller companies have improved at a faster rate than large ones this year: “Medium companies may have the right characteristics to cope with this period of intense change. Their smaller scale means that they are by nature able to be more agile and responsive. In fact, they may have the right amount of resources to invest in new products as well as the flexibility to address changing customer requirements. The industry still demands best-of-breed solutions and smaller suppliers who have developed these in specialist areas are able to take a healthy slice of the pie in new projects.”
The continuing shift in buyers’ preferences for software running in generic IT technology, their increased concern for efficiency and a highly competitive market are all continuing to exert pressure on selling prices, with margins reducing despite vendors decreasing expenditure on R&D, recruitment, sales, marketing and shows.
The transition to software (including the cloud) is well underway, though hardware remains the primary source of both revenues and profits for most suppliers, with profits in sharp decline as noted above. However, some respondents who said their primary source of revenues is hardware also said that their primary source of profits is now software, which generally carries higher margins than hardware.
Unsurprisingly given the Supply Trends Report’s findings on profitability, the IABM confidence ratio, which reflects business sentiment looking forward for the next year, declined from a fairly robust 7.4 mid-2017 to a less optimistic 5.6 in December 2017; this is relatively low by historical standards. Companies that primarily rely on software revenues were however significantly more confident than those primarily relying on hardware revenues, reflecting the now long standing transition of technology buyers from hardware to software.
The Report also reflects the continuing difficulty for companies in recruiting staff with both the broadcast and IT skillsets needed today.
“Although some suppliers are going through difficult times at present, there are reasons to remain positive about the future of media technology,” said Peter White, CEO, IABM. “2018 is a ‘spike’ year with plenty of events-related spending guaranteeing growth and opportunities for many, particularly with SMPTE ST2110 now published and giving end users the confidence to move forward with their IP plans.
As to how the spike may be driven by sports events this year, and which specific areas sports broadcast will aid, Zanni told SVG Europe: “End users may push broadcast and media technology spending in preparation for major sporting events in 2018. There has already been considerable investment in UHD (and some VR) for the Winter Games by Korean broadcasters. Investment may include technologies to enable increased UHD coverage (including high dynamic range) and efficiency-boosting activities such as remote production.”
On whether broadcasters of sport events are going to seize the SMPTE 2110 opportunity this year, Zanni stated: “Sports broadcasters are likely to invest in ST2110 to enable remote production activities at the upcoming FIFA World Cup, as well as the increased amount of UHD production that is planned.”
White concluded: “Adoption of emerging technologies will continue to rise, driving more growth for those suppliers that have invested in them. In the longer term, technology spending will continue to grow as traditional technology users try to keep up with the volatile nature of online video, leaving a plethora of opportunities for suppliers.”