Strong Outlook For Media Tech Businesses

Global market valuation for the media technology industry is projected to increase to nearly $30 billion by 2015, and 64% of end-users expressed a positive outlook for their organization’s business over the next few years, despite a drop in confidence over market conditions amongst broadcast and media suppliers. That’s according to new research released by the International Association of Broadcasting Manufacturers (IABM) at the NAB Show.

Europe is expected to take 40% of the global market pie, according to the fourth edition of IABM’s Global Market Valuation Report, followed by North America at 29%. Services will still be the leading business driver, contributing a projected 35% of the market valuation by 2015, IABM’s Director General Peter White reported at a presentation Saturday.

A year-over-year IABM industry index (based on financial reports for about 32% of the market) showed that 6% of businesses had moved from a loss to a profit, while 2% moved from a profit to a loss. Research showed year-over-year sales growth of 3%, and the number of companies in profit growing to 71%, although year-over-year profit was down 7%.

Results from a November 2011 survey of IABM members showed expectations for a slight uptick in projected R&D investment through November 2012. Manufacturing capacity is the biggest concern globally for contract fulfillment limitations, followed closely by a lack of the proper skills and staff.

Confidence in the industry for the year ahead also dropped from a score of 14 last May to 4 in November, primarily weighed down by Western European businesses’ concerns about the continent’s debt crisis.

But an end-user survey produced with Devoncroft Partners LLC, with 66% of the 10,000-plus polled coming from the United States, generally expressed more optimism. While 32% said the recession was not over compared to 27% who said it was, commercial broadcasters expected ad revenue to increase by 60% over the next one to two years, and 59% of pay TV broadcasters projected their subscriber bases to increase.

As for what broadcasters want from suppliers, 65% said it was very important to find the best fit for their functional requirements, with 60% also emphasizing the value of quality service and support from vendors in their purchase decisions.

Outside of cost and technical specifications, the importance of efficiency and saving money was the most important consideration according to 42% of end-users, with 59% saying multiplatform content delivery was the most important technological priority.

The survey findings’ positive business outlook and emphasis on multi-platform content delivery were shared by Clyde Smith, SVP of new technologies for Fox Network’s engineering and operations division.

“I see a change less driven by annual budget cycles and more driven by business opportunities and the opportunity to provide efficiency in operations,” Smith said at the presentation Saturday. “If you can improve the efficiency of the organization … you’ll get the funding for moving forward.”

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