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ASK THE EXPERTS 2014 Technology with Peter White, IABM In terms of technology - how is the broadcast industry set to change in 2014? 2013 was a particularly challenging year for many vendors in the broadcast and media technology sector. According to the IABM Industry Index, while there was some modest growth last year, many businesses experienced an ongoing decline in profitability – most notably in the SME sector. Broadcasters business models have changed markedly over the last few years. With an emphasis on content delivery over multiple platforms, the need for well developed and managed filebased workflows and efficient asset management systems has grown exponentially. We are witnessing a move towards outsourcing by the broadcasters to both accelerate and facilitate change with less risk and less fixed capital investment. The move from Capex to Opex continues apace at many broadcasters on a global basis. In addition when broadcasters do invest in technology directly they are looking at the total cost of ownership of such equipment and they expect it to work seamlessly with other equipment from different vendors within their system architecture. It is the collision of different technologies that is leading this transition. We’re experiencing a shift from traditional hardware products to a new software defined environment where technology is the enabler and the world is file based. 48 | TV-BAY MAGAZINE: ISSUE 87 MARCH 2014 There are a number of regions not yet operating HD and I am sure there is a lot of business for broadcast technology vendors in 2014 and beyond just making this happen. We will of course see a greater adoption of cloud services particularly in the new areas of activity undertaken by broadcasters. I am sure we will witness the start of the thinking and planning to an extended transition to 4k led by the consumer displays market. The first mover broadcasters will no doubt have this very clearly on their radar. Will there be a move away from a dependence on proprietary technologies? In all likelihood there will be a move by the broadcast industry to reduce its reliance on proprietary technology. Right across the supply chain we are witnessing the adoption of traditional IT products, systems and services and lower cost options to the existing proprietary broadcast technologies. Having said that, our industry does have a number of unique factors and there still exists a place for unique technology for the handling of the highest quality video and sound that is one of the key differentiating characteristics of our industry. We can see from the IABM Industry Trends Survey and IABM Benchmark Report that our sector continues to invest heavily in research and development. The broadcast and media technology vendor has a long- standing skill and capability in finding creative and innovative solutions to problems that broadcasters experience on a daily basis. I do not expect the need for bespoke and innovative solutions to disappear but I do expect the solutions to be required in a different way than before; interacting with other proprietary platforms and systems as well as enabling and facilitating efficient and error free operations. In other words there will be a need to provide best-of-breed-solutions that may be of a proprietary nature and tailor-made for the needs of the specific customer but using and interacting seamlessly with more standard and commonplace IT platforms and services. What are the challenges facing the industry? We have already talked about the commoditising of our industry and of course with the battle for spectrum being won by the telecoms sector there continues to be a convergence from the telecoms sector into the smaller broadcast and media technology sector. The main challenge to many broadcast and media technology vendors is therefore being agile and adaptive enough to embrace the methodologies and innovation that telecoms businesses bring to our sector whilst maintaining its distinctive competitive advantage through its knowledge and expertise in the broadcast quality audio and video technology world. What is very clear from all the indices we produce and business intelligence we gather is that there is, overall, less margin in our industry. Throughout all the product segments of the broadcast industry, model solutions today just do not command the prices and margins of yesterday. So while market confidence is at its highest in two years for the broadcast and media technology market, there is still the ongoing question of how to maintain profitability in the long term. Basically many businesses in our sector are having to paddle a whole lot harder to just stand still against a current of falling margins brought about by the factors mentioned above. This is the key challenge to our industry and the answer to it is manifold. Firstly, innovation that provides improved ROI for the broadcaster or end user will always sell. Secondly, margins can be improved with a real focus on