Reflecting on this year’s NAB show, Graham Sharp, VP of Sales and Marketing at BCNEXXT, explores how broadcast’s loss of “specialness” is accelerating several industry-wide shifts
The Broadcast Industry is losing its ‘specialness’, if there is such a word.
Historically, we lived in a bubble, with products specifically built not only for an industry but even for specific customers. There were 1,600 TV stations and 100 cable channels in the US alone, all making their own decision on what technology to buy, so if you didn’t sell to one station, you got another. The industry was growing, and there was plenty of business to go around, but that has changed!
Broadcast is no longer a self-contained technology market. It is being absorbed into the broader cloud, software, IT, and new AI economy. It's already small; a $35Bn business, within a $10Tr IT industry. In other words, it’s roughly the same size as HP’s enterprise division, and it's shrinking because:
1. IT hardware and platforms are more than capable of processing video.
This means broadcast-specific technology is now becoming a software application running on generic hardware. The industry is moving away from purpose-built hardware, specialist engineering teams, and dedicated broadcast infrastructure to software-defined architectures, the IT department, and cloud virtualization. And increasingly, they are buying consumption-based services and solutions rather than boxed products.
2. The new economics of media are forcing operational transformation.
Every media company is grappling with reduced revenue through fragmented subscription (subscriber fatigue, increased competition) and lower advertising, whilst suffering rising content and operational costs.
3. The Economics are in turn driving the historic mega-mergers.
It’s dominating the landscape, and the number of customers is reducing dramatically. Major technology acquisitions are in the hands of a few key executives worldwide, probably about 200.
You need look no further than the recent NAB for proof.
For many years, we had 6-figure attendance, 120,000+ attendees, and the 2nd largest trade show in the US. Now we are lucky to get 30% of that, despite the organizers' attempts to break attendance records, and significantly, the demographics have changed; instead of TV stations buying $100,000 routers, you have independent filmmakers buying $3,000 cameras.
That said, the broader trend of technology companies acquiring media businesses is ushering in a new era in which technology, such as AI and automation, is being used to reduce costs dramatically. In Paramount’s annual report, new CEO David Ellison said, “If we want to remain competitive long-term, we must strengthen our technology and do what it takes to position ourselves as the industry’s most technologically capable media company.”
This is a strategy all media companies will need to embrace to stay competitive and begs the question, how will the industry, so used to being ‘special’ for so long, manage this transition?
New technology acquisitions will be based on automation and resource optimization (now often called AI), driving operational efficiency, business agility, reducing dependencies on specialists, and enabling media organizations to do more with less.
Targets include the consolidation of silos such as linear, streaming, and digital into a single streamlined distribution operation, single efficient content supply chains, and automated media operations wherever possible.
The future winners may not be traditional Broadcast Technology Companies, they are maintaining too much legacy technology, and they don’t have the rapid software development genes of newer start-ups, established Consulting firms, and large IT Software businesses.
This is exactly what David Ellison is signaling; if the Broadcast Technology Companies do not keep up, the Media Companies will do it themselves. They have the ability in this new World.
I would argue that we at BCNEXXT are well-positioned and are benefiting from the shift, being relatively new, with no legacy to maintain. With a Containerized Microservices architecture that is both cloud native and cloud-agnostic, we are totally focused on automating operations, closely managing infrastructure, and enabling Broadcasters to keep costs down and do more with less.
And finally, as a postscript, will the large trade shows as we know them be one of the casualties?
As buyers consolidate into a smaller number of massive organizations, the economics of NAB itself come into question. The model worked when executives from 1,600 call-letter stations and 100 cable networks were wandering the halls, making purchasing decisions. Today, with only 200 executives making the purchasing decisions worldwide, and most either not making the annual pilgrimage or remaining tucked away in the Wynn hosting meetings, they are unlikely to wander by an exhibition stand and discover something new.
Reflecting on this year’s NAB show, Graham Sharp, VP of Sales and Marketing at BCNEXXT, explores how broadcast’s loss of “specialness” is accelerating several industry-wide shifts
The Broadcast Industry is losing its ‘specialness’, if there is such a word.
Historically, we lived in a bubble, with products specifically built not only for an industry but even for specific customers. There were 1,600 TV stations and 100 cable channels in the US alone, all making their own decision on what technology to buy, so if you didn’t sell to one station, you got another. The industry was growing, and there was plenty of business to go around, but that has changed!
Broadcast is no longer a self-contained technology market. It is being absorbed into the broader cloud, software, IT, and new AI economy. It's already small; a $35Bn business, within a $10Tr IT industry. In other words, it’s roughly the same size as HP’s enterprise division, and it's shrinking because:
1. IT hardware and platforms are more than capable of processing video.
This means broadcast-specific technology is now becoming a software application running on generic hardware. The industry is moving away from purpose-built hardware, specialist engineering teams, and dedicated broadcast infrastructure to software-defined architectures, the IT department, and cloud virtualization. And increasingly, they are buying consumption-based services and solutions rather than boxed products.
2. The new economics of media are forcing operational transformation.
Every media company is grappling with reduced revenue through fragmented subscription (subscriber fatigue, increased competition) and lower advertising, whilst suffering rising content and operational costs.
3. The Economics are in turn driving the historic mega-mergers.
It’s dominating the landscape, and the number of customers is reducing dramatically. Major technology acquisitions are in the hands of a few key executives worldwide, probably about 200.
You need look no further than the recent NAB for proof.
For many years, we had 6-figure attendance, 120,000+ attendees, and the 2nd largest trade show in the US. Now we are lucky to get 30% of that, despite the organizers' attempts to break attendance records, and significantly, the demographics have changed; instead of TV stations buying $100,000 routers, you have independent filmmakers buying $3,000 cameras.
That said, the broader trend of technology companies acquiring media businesses is ushering in a new era in which technology, such as AI and automation, is being used to reduce costs dramatically. In Paramount’s annual report, new CEO David Ellison said, “If we want to remain competitive long-term, we must strengthen our technology and do what it takes to position ourselves as the industry’s most technologically capable media company.”
This is a strategy all media companies will need to embrace to stay competitive and begs the question, how will the industry, so used to being ‘special’ for so long, manage this transition?
New technology acquisitions will be based on automation and resource optimization (now often called AI), driving operational efficiency, business agility, reducing dependencies on specialists, and enabling media organizations to do more with less.
Targets include the consolidation of silos such as linear, streaming, and digital into a single streamlined distribution operation, single efficient content supply chains, and automated media operations wherever possible.
The future winners may not be traditional Broadcast Technology Companies, they are maintaining too much legacy technology, and they don’t have the rapid software development genes of newer start-ups, established Consulting firms, and large IT Software businesses.
This is exactly what David Ellison is signaling; if the Broadcast Technology Companies do not keep up, the Media Companies will do it themselves. They have the ability in this new World.
I would argue that we at BCNEXXT are well-positioned and are benefiting from the shift, being relatively new, with no legacy to maintain. With a Containerized Microservices architecture that is both cloud native and cloud-agnostic, we are totally focused on automating operations, closely managing infrastructure, and enabling Broadcasters to keep costs down and do more with less.
And finally, as a postscript, will the large trade shows as we know them be one of the casualties?
As buyers consolidate into a smaller number of massive organizations, the economics of NAB itself come into question. The model worked when executives from 1,600 call-letter stations and 100 cable networks were wandering the halls, making purchasing decisions. Today, with only 200 executives making the purchasing decisions worldwide, and most either not making the annual pilgrimage or remaining tucked away in the Wynn hosting meetings, they are unlikely to wander by an exhibition stand and discover something new.
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