MUMBAI: A new survey conducted by the International Association of Broadcast Manufacturers (IABM) at the 2011 National Association of Broadcasters (Nab) Show finds sharp divisions among broadcasters over the future of advertising as a business model, and indicates that the effects of the recession continue to linger - particularly in North America.
Although the survey indicated that an overwhelming majority of broadcasters are optimistic about the short- and long-term future, many are cautious about stating that the recession is actually over - and its effects have been more severe and have lasted longer in the North American market. As a result, when it comes to broadcast technology solutions many broadcasters are tightening up their procurement procedures and placing the onus on suppliers to deliver maximum value and effectiveness for key business processes. Value for money is still the number one requirement of suppliers, but better support and connectivity are also very high on the list.
The IABM End User Survey is conducted twice a year in conjunction with the Nab and IBC Shows, with respondents drawn from the shows‘ attendee databases to provide a representative sample of end users who are shopping for broadcast technology solutions. Complementing the ongoing
research carried out by the IABM among its member suppliers, this year‘s NAB survey focused on buyers‘ state of mind in the aftermath of the global recession, and their intentions as recovery continues to take place.
IABM DG Peter White said, "These types of findings, and the other insights we‘re able to glean from end users such as broadcasters and other media companies, are what makes this survey so valuable to the technology suppliers that make up our membership. Although the IABM continues to produce an important body of market information about the industry‘s supply side, this survey is one of our first efforts into gauging the opinions of buyers such as broadcasters and post houses. By tracking the way buyer sentiment evolves from show to show and from year to year, we‘ll be able to give our members important trending information in an incredibly dynamic period in which we are witnessing many changes."
Effects of the Recession: Respondents were fairly evenly split, but in order of importance, they ranked the effects they have experienced from the recession as follows:
General belt-tightening all around
Lower revenues.
Reduction in capital expenditure
Reduction in operational expenditure
Harder to get finance for development or expansionk
About a fourth of respondents agreed that some projects had been delayed but others had gone ahead. Another fourth agreed that technology budgets had been cut back across the board, and yet another fourth agreed that they were now putting greater emphasis on project justification and ROI. 24 per cent reported that their technology budgets had been cut by a quarter, with another 22 per cent saying their budgets had been halved.
The Evolving Business Model : A majority of respondents believed that the recession had changed the way their companies regard their business model. More than 90 per cent agreed or strongly agreed with the statement "All broadcasters and content creators need to develop new content monetisation methods to exploit new revenue streams."
However, the sample was sharply divided on the question of whether "Advertising is diminishing as a revenue source for broadcasters," reflecting the uncertainty as to the viability of advertising as a business model for broadcasting. There was broad agreement for both of these statements: "The Internet is the biggest threat to traditional broadcasters," and "The Internet is the biggest opportunity for traditional broadcasters."
Procurement Approaches: When asked if they thought the recession had changed the way their company approaches procurement and projects, well over two-thirds of respondents agreed or strongly agreed that it had. The statement "We try harder to ensure that everything we buy is fit for purpose" ranked highest on a list of specific recession-induced procurement changes, followed by "We take more care to validate what suppliers tell us about integration" and "We are more skeptical about sales pitches and promises to deliver."
Almost 40 per cent said that these changes are permanent; with half saying that it is too soon to tell. These results suggest that the recession has not only resulted in lower budgets, but has prompted in many cases a review and a tightening up of procurement procedures, all of which puts pressure on manufacturers to up their game.
Respondents listed "Generate new business," "Improve operational efficiency," and "Make more cost-effective use of resources" as their top three objectives (in that order) for technology procurement."Ease of integration" and "Fit to purpose" received high responses regarding approaches to choosing individual system elements and services, indicating that customers are becoming much more concerned with the
difficulty and complexity of integrating products from different manufacturers into one overall system.
It is perhaps significant that broadcasters everywhere are struggling not so much with the rationale of projects as with their complexity, particularly the issue of integrating systems from different manufacturers.
Information Sources: When asked about their most important sources of information when making technology procurement decisions, respondents ranked the following in order of importance:
1. Trade shows and conferences
2. Personal contacts with vendors
3. Vendor websites
4. Personal contacts in other companies
5. In-house experts
6. Vendor literature
7. Articles in the trade press
8. Advertisements in trade press
9. Internet search engines
10. Seminars, webinars, and roundtables
11. Integrators
12. Consultants
13. Blogs, newsletters, podcasts, and social networks What is striking about these results is that while vendor websites and the Internet in general are clearly of importance, the most important factors for both groups involve personal contact of one kind or another.
The Technology Buy: In terms of their current mood, NAB respondents are optimistic about the future for their companies, both long and short term, and at least a third responded that they have never stopped spending on technology through the recession (with another third saying they will resume spending in 2011). These responses suggest that claims that the bottom dropped out of the market completely may be overstating the severity of the situation.
Respondents ranked in order the most important items on their technology shopping lists, with storage topping the list followed by HD, video and audio editing/processing, cameras, and new media delivery (Web, mobile, etc.). 3D was far down on the list, at number.
14. The fact that HD came second only to storage suggests there is still life in that market, while the low position of 3D in the list seems to raise some questions about the degree of "hype" that it received at both NAB and IBC. When asked to rank various options pertaining to what their company most needs from the supplier community going forward, respondents listed "Enhanced value for money" as their top choice, followed closely by "Innovative new products," "Better support for existing products," and "Better connectivity."
