Where is money being spent?

Joe Zaller looks at how tech budgets are being spent.
Multi-platform content distribution is seen as a big part of broadcasters' future, but isn't yet number one in terms of technology investment.
Multi-platform content distribution is seen as a big part of broadcasters' future, but isn't yet number one in terms of technology investment.
Broadcast, Devoncroft, HDTV, Infrastructure, Investment, Analysis
?Upgrading infrastructure for HD/3Gbps operations' is currently the number one area of tech investment for broadcasters.
?Upgrading infrastructure for HD/3Gbps operations' is currently the number one area of tech investment for broadcasters.


Joe Zaller looks at how technology budgets are being spent in the global broadcast industry

In the current environment, everyone in the broadcast business wants to know what parts of the industry are doing well, where money is being spent and what is driving this spending. While there is no absolute answer to these questions, the findings from the 2010 Big Broadcast Survey (BBS) by Devoncroft Partners go a long way towards answering them.

Much of the technology purchasing in the broadcast industry is driven by major projects ranging from international events such as elections and sporting championships, to the long-term, planned capital upgrades of broadcast infrastructure and facilities. Thus, an understanding of which major projects are being implemented by broadcast professionals around the world provides an insight into the capital expenditure plans of the industry.

As part of our 2010 broadcast industry market study, more than 3000 broadcast processionals – including radio and TV broadcasters, cable/satellite/IPTV operators, playout centres, post production facilities and cable programmers – were asked to provide information about the projects they are currently implementing or are planning to implement in the next 12 months.

Respondents were presented with a list of major projects and asked to indicate up to five choices that they are currently implementing or have planned / budgeted to implement in the next year. The chart shows the percentage of respondents who indicated they are planning to implement each project.

Respondents were also asked to provide budget details for each project. This budget information along with a granular breakdown of planned projects is available in the 2010 BBS Global Market Report.

By a wide margin, more respondents selected ‘upgrading infrastructure for HD/ 3Gbps operations’ than any other type of project. It’s interesting to note that last year, in our 2009 broadcast industry market study, the transition to HDTV operations was ranked by respondents as the technology trend most important to their business – and by a similarly wide margin.

In the time since the 2009 BBS was published, broadcast professionals have apparently translated this top-ranked trend into action through real-world projects that are either currently being implemented or planned for the current year.

In addition to upgrading infrastructure for HD/3Gbps operations, respondents also indicated that they plan to upgrade their transmission and distribution capabilities – presumably to support their transition to HDTV and to prepare for eventual analogue switch-off.

As shown in a previous post about the broadcast industry’s most important technology trends for 2010, the transition to HDTV operations was one of the top-ranked technology trends this year as well.

Indeed, there is a strong correlation between how respondents ranked which trends are most important to their business, and the major projects they are planning or implementing.

The major projects ranking 3rd and 4th in terms of how many respondents plan to implement them were ‘installing or enhancing a workflow / asset management system’, and ‘archive-related projects’. The high percentage of broadcast professionals planning to implement these projects highlights the fact that the industry is striving for ways to become more efficient and to monetise content in more ways. It’s also good news for asset management, storage and library management vendors.

The top four-ranked projects are closely aligned with 2010’s most important trends in the broadcast industry, which show that the priorities for the industry are to continue the transition to HDTV operations, while at the same time find ways of being more efficient (through automated and file-based / tapeless workflows), and generating new revenue streams (through multi-platform content distribution).

These results also show that the industry will continue to push ahead with new content creation and delivery projects. Ranking 5th and 6th on the list of planned projects are ‘build new studios / OB vans’, and ‘launch new channels’. Undoubtedly, the vast majority of new studios and OB vans will be HD capable; as will many of the new channels. It’s also clear from these findings that many of the new channels will undoubtedly have a strong automation component (the #7 project on this list), regardless of whether they are HD or SD.

The remaining projects that were selected by at least 10% of survey respondents offer an interesting picture of project activity across the world, with everything from upgrading audio and newsrooms, to multi-platform content distribution.

It’s worth pointing out here that in the 2010 ranking of the broadcast industry’s most important trends, multi-platform content distribution was ranked #1 in terms of being ‘most important’ to respondents’ businesses in the future.

Time will tell whether this will translate into the #1 planned project as was the case with the transition to HDTV operations after it was ranked as the most important trend last year.

Finally, let’s examine the four planned projects that appear at the bottom of this list: ‘install or revamp business management system’, ‘consolidate operations in regional hubs’, ‘work with management consultants on business /technology transformation’, and ‘outsource operations e.g. playout’.

These are all very large projects that will most likely be done by only the largest broadcast professionals. Keep in mind that the planned project chart in this article shows the responses of all global participants in the 2010 BBS broadcast industry study, regardless of organisation type, size or location.

Thus, it measures the number of planned projects, but does not measure their size, value or relative commercial importance. The 2010 BBS Global Market Report from Devoncroft Partners provides granular analysis of planned projects, broken down by organisation type, size and location.

More than 5,600 people in 120+ countries participated in the 2010 BBS project. For further information, visit: www.devoncroft.com

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