Broadcast Asia 2016 IABM State of the Industry Conference

Welcome & Introduction

• Peter Bruce, APAC Director IABM

• Stan Moote, CTO IABM

Industry Index



APAC Market Update June 2016

China Market • New 5 Year Plan

– Aimed at defining the country’s economic policy targets for a five-year period. – Technological development of China with R&D investment is predicted to account for 2.5% of

GDP by 2020. – Objectives are rarely met – but this is the plan – Investment will concentrate on scientific advances with the IT industry particularly benefitting

from the government’s direction – Improvement of the country’s broadband infrastructure. Investment for network infrastructure

between 2015 and 2017 will increase by about 40% – aimed at improving both broadband reach – 98% of administrative villages to be reached by

optical fiber - and speed – up to 100Mbps in relevant urban centres.

China Market • New 5 Year Plan

– Aimed at defining the country’s economic policy targets for a five-year period. – Technological development of China with R&D investment is predicted to account for 2.5% of

GDP by 2020. – Objectives are rarely met – but this is the plan – Investment will concentrate on scientific advances with the IT industry particularly benefitting

from the government’s direction – Improvement of the country’s broadband infrastructure. Investment for network infrastructure

between 2015 and 2017 will increase by about 40% – aimed at improving both broadband reach – 98% of administrative villages to be reached by

optical fiber - and speed – up to 100Mbps in relevant urban centres. 10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

2007 2008 2009 2010 2011 2012 2013 2014 2015

Int e r ne t a nd M obi l e Pe ne t r a t i on ( 2 0 0 7 -2 0 1 5 )

Internet Penetration

Mobile Internet Penetration

– both internet and mobile penetration have grown significantly between 2007 and 2015. – In 2015, mobile internet penetration stood at 90%, covering almost all internet users. – The proportion of internet users viewing online video on mobile devices was 65.4% in 2015,

which is equivalent to about 450m people

China Market

2014 ($bn) 2013-2014 (% Change)TV revenues $69.2 13.16%Advertising revenues $24.0 5.59%Online video revenues $4.0 76%

Feature film production

TV series production

TV animation production

2014 (No. of projects)618429277

– GDP is slowing – Despite the worries for the macroeconomic situation, the TV industry in China is growing fast. – The combination of digital broadcasting transition, Pay-TV growth and increasing broadband and

smartphone penetration makes this country the most attractive market in Asia-Pacific.

IABM Industry Index, April 2016 • Year on Year Sales Change, Market, last 24 months

2.8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10% Global 3 mth mov avg.

2.1%

IABM State of the Industry Conference– BCA 2016 IABM Copyright 2016 @THEIABM www.theiabm.org

IABM Industry Index, April 2016 Year on Year Sales Change, Market, last 24 months

-6%

-4%

-2%

0%

2%

4%

6%

8%

10% Global 3 mth mov avg. Large 3 mth mov avg.

3.3%


IABM Industry Index, April 2016 Year on Year Sales Change, Market, last 24 months

-6%

-4%

-2%

0%

2%

4%

6%

8%

10% Global 3 mth mov avg. Large 3 mth mov avg. SME 3 mth mov avg.

-5.5%


IABM Industry Index, April 2016 Market Concentration, Lorenz Curve

25%

80%

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

Cum

ulat

ive

% o

f Rev

enue

s

Cumulative % of Firms

Lorenz Curve Perfect Distribution

80%

20%


IABM Industry Index, April 2016 Revenue growth gap between Large and SMEs (Large > $57m)

-4.00%

1.00%

6.00%

11.00%

9%


IABM Industry Index, April 2016 Year on Year Profit Growth, Market last 24 months

-25%

-15%

-5%

5%

15%

25%

Global 3 mth mov avg.

-5.2%


IABM Industry Index, April 2016 Companies in Profit, measured over last 24 months

60%

65%

70%

75%

66%


IABM Industry Index, April 2016 (Alternative Slide) Companies in Profit, measured over last 24 months

60%

65%

70%

75%

Global Companies Linear (Global Companies)

66%


IABM Industry Index, April 2016 Companies in Profit, measured over last 24 months

Companies in profit both years

54.4%

Companies moving from loss to profit

Companies in loss both years

Companies moving from profit to loss

54.4% 11.6% 23.3% 10.7%

Copyright @ 2013-2016 IABM DC Please email [email protected] or [email protected] for more information

Global Market Valuation & Strategy Report

2015-2016

IABM State of the Industry Conference – BCA 2016

mailto:[email protected]

mailto:[email protected]

Copyright @ 2013-2016 IABM DC

Total market size by region

$b

$10b

$20b

$30b

$40b

$50b

$60b

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Americas EMEA Asia Pacific

Asia Pacific 19%

EMEA 43%

Americas

38%

$49.3 billion



9% 3%

6%

4%

5%

14%

2% 2%

55%

Acquisition and production

Post production

Content and communication infrastructure

Audio

Storage

Playout and delivery systems

System automation and control

Test, quality control and monitoring

Total Services

Total market size by segment



Product & services revenue growth - CAGR

2009 – 2012 CAGR

Total Market: 4.6% Products: 3.6% Services: 5.4%

2012 – 2015 CAGR

Total Market: -1.0% Products: -

2.4% Services: 0.1%

Significant Revenue

Slowdown



7.4%

3.5%

6.8%

3.8%

1.4% 0.9%

10.3%

-1.6%

5.4%

-1.0%

-4.0%

-0.7% -1.8%

1.7%

-5.8%

3.0%

-3.0%

0.1%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

Acquisition and production

Post production Content and communication infrastructure

Audio Storage Playout and delivery systems

System automation and

control

Test, quality control and monitoring

Services

CAGR (2009 - 2012) CAGR (2012 - 2015)

Revenue growth, by segment - CAGR

IABM State of the Industry Conference – NAB 2016

Industry Index



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IABM End-User Survey NAB 2016 Split of organizational type

Broadcaster, 18%

Film studio, 3% Radio station, 5%

Recording studio, 1%

Systems Integrator, 6.0%

Production / Post-Prod., 18.0% Govt / Edu /

Corporate, 12.0%

Consultant, 6.0%

Freelancer, 8.0%

Other, 23.0%


IABM End-User Survey NAB 2016 Broadcast Revenue source

60%

7%

22%

11%

Advertising (Commercial Broadcaster)

Subscriptions (Pay-TV Broadcaster)

Licence Fees (Public Broadcaster)

Other


IABM End-User Survey NAB 2016 Broadcast Revenue source

35% 52%

13%

Stable Under Review Don't Know

License Fee

58%

24%

12% 6%

49%

28%

13% 10%

Subscriptions Advertising

Increase Stay the Same Decline Don’t Know

Increase Stay the Same Decline Don’t Know


26%

15%

35% 30%

38%

17%

39%

29%

48%

9%

10%

9% 11% 8%

9%

10%

11%

10%

12%

7%

9% 14% 11%

11%

11% 12%

9% 22%

21%

12% 18% 16%

22%

16% 19%

16%

32% 48% 35% 28% 27% 40% 24% 29% 17%

0%

20%

40%

60%

80%

100%

2012 NAB 2012 IBC 2013 NAB 2013 IBC 2014 NAB 2014 IBC 2015 NAB 2015 IBC 2016 NAB

0-20 21-40 41-60 61-80 81-100

Traditional

New

IABM End-User Survey NAB 2016 Percentage revenue from traditional broadcast operations versus new activities such as web,

mobile, streaming, multi-platform content delivery?

CU

RR

ENT


48%

17%

31%

42%

10%

9%

8%

16%

9%

11%

8%

12%

16%

23%

36% 19%

17% 40% 17% 11%

0%

20%

40%

60%

80%

100%

2016 NAB Broadcasters System Integrators Production/Post-Prod.

0-20 21-40 41-60 61-80 81-100

Traditional

New



CU

RR

ENT


26%

15%

35% 30%

38%

17%

39%

29%

48%

9%

10%

9% 11% 8%

9%

10%

11%

10%

12%

7%

9% 14% 11%

11%

11% 12%

9% 22%

21%

12% 18% 16%

22%

16% 19%

16%

32% 48% 35% 28% 27% 40% 24% 29% 17%

0%

20%

40%

60%

80%

100%


0-20 21-40 41-60 61-80 81-100

Traditional

New



CU

RR

ENT


28%

18%

34% 29%

37%

18%

39%

30%

48% 12%

9%

7% 14% 9%

12%

11% 15%

11% 16%

19%

13%

20% 16%

22%

16% 18%

15% 24%

28% 18%

21% 20% 25%

20% 21% 15%

20% 26% 27% 16% 17% 24% 14% 16% 11%

0%

20%

40%

60%

80%

100%


0-20 21-40 41-60 61-80 81-100

Traditional

New



IN 2

– 3

YEAR

S TI

ME


IABM End-User Survey NAB 2016 Percentage of capital budget for dedicated broadcast technology products spent

with traditional broadcast vendors versus traditional IT vendors?

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

NAB 2013 IBC 2013 NAB 2014 IBC 2014 NAB 2015 IBC 2015 NAB 2016 Broadcaster

Current In 2 - 3 Years


IABM End-User Survey NAB 2016 When you buy from “Traditional IT Vendors” for broadcast engineering, operations, and production

(as opposed to back-office systems), who do you purchase from the most?

0% 5% 10% 15% 20% 25% 30% 35% 40%

Other

Huawei

Arista Networks

Brocade Networks

Hitachi Data Systems

EMC/Isilon

Juniper

NetApp

Quantum

Oracle

IBM

HP

Dell

Microsoft

Cisco


IABM End-User Survey NAB 2016 How likely are you to deploy some sort of cloud-based technology

over the next 2-3 years?

34% 25% 27% 9% 5%

Not at all likely Unlikely Somewhat

Likely Very Likely We are already

doing it today


IABM End-User Survey NAB 2016 How likely are you to deploy some sort of cloud-based technology

over the next 2-3 years?

86%

IABM INDUSTRY TRENDS SURVEY




IABM Industry Trends Survey December 2015 R&D Expenditure

53.2%

42.9%

3.9%

47.4% 44.7%

7.9% 0%

10%

20%

30%

40%

50%

60%

Increase Static Decrease

Now Next


IABM Industry Trends Survey December 2015 Factors limiting order/contract fulfilment

35.7%

35.7%

10.0%

5.7% 12.9%

Manufacturing/Development Capacity

Skills or Staff Constraints

Supply Chain Issues

Regulatory or Compliance Issues

Credit/Finance


IABM Industry Trends Survey December 2015 Most difficult staff to recruit/train

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Technical Sales Staff

Software Developers/Engineers

Broadcast & IT Engineers

Broadcast Engineers


IABM Industry Trends Survey December 2015 Outlook for the year ahead

4%

41%

37%

18%

Improving rapidly Improving About the same as it is now Deteriorating Deteriorating rapidly


Impact on Technology… Pause in Spending, or Change in Spending?

Source: Devoncroft 2015 Big Broadcast Survey

In 2-3 Years do you expect to spend more or less with each of the following?

Traditional Broadcast Vendors

Outsourced Service Providers

IT Vendors

Cloud Service Providers

Spend Less

Spend More


This is Structural Shift: Not Like Past Transitions… Previous Transitions: Forklift Upgrades…

Standards

Camera Formats

Codecs

Wrappers

Format War…

Tape Formats

etc

Black & White

Color

Std. Definition

High Definition

Analog

Digital


This is Structural Shift: Not Like Past Transitions… Previous Transitions: Forklift Upgrades…

Black & White

Color

Std. Definition

High Definition

Analog

Digital

COTS IT Infrastructure, Virtualization, Data

Center Architectures

On Premise, Specialized Hardware

…Current Transition: Not About Replacing Old Boxes with New Boxes

Business Models Operations Culture Technology

Requires Simultaneous Transformation of…


True Cloud Native Applications Needed

“It’s not enough to sell a software license that needs a dongle to make it work.

Source: Devoncroft Partners Interview

“Everyone wants to paint a great story about how their products work in a virtualized cloud environment…

“How do I plug a dongle into the cloud?”- Senior Broadcast Executive

“…but who is actually building cloud native applications?


Implications for Vendors and Service Providers Acquisition &

Production Post Production Infrastructure

AudioStorage Playout & Distribution

Test & Measurement

System Automation Service Providers

2016 NAB Show Floor still resembles the following …


Implications for Vendors and Service Providers

2020?.....

Hall 2: Services

2025?.....

2030?.......

Hall 1: Cameras, Camera Accessories

Hall 3: Control Surfaces, Microphone,

Displays

All Specialized Components… … … …

QC TranscodingAsset Management

Graphics SubtitlingEditing

Playout EncodingResource Management

Hall 4: IT Infrastructure, Cloud Services, Media Services, Orchestration

The future show floor …


This is Going to be Really Hard

Requires Simultaneous Transformation of …

Business Model Operations Culture Technology

… for Both Buyers and Suppliers of Technology


IABM End-User Survey NAB 2016 Other factors affecting purchase decisions besides cost and technical specification - Index

0 10 20 30 40

Vendor roadmap (i.e. plans for the product) Installation support

Personal relationship with vendor Availability of training Reputation of vendor

ROI After sales and support

Interoperable with other vendor’s products Cutting edge technology

Total cost of ownership Makes us more efficient / saves money

Index (/100)


IABM End-User Survey NAB 2016 How important is interoperability between systems when evaluating products for your

organization’s next generation media technology infrastructure?

48% 40% 9% 1% 2%

Not at all important Not Important Moderately

Important Important Very Important


IABM End-User Survey NAB 2016 How important is interoperability between systems when evaluating products for your

organization’s next generation media technology infrastructure?

88%


IABM End-User Survey NAB 2016 How familiar you are with the various interoperability initiatives?



3%

6%

25%

66%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Used to participate but no longer do

I/My company is an active participant

Know about, but we are not a participant

Unfamiliar with this initiative

Average across initiatives



66% Unfamiliar with Interoperability Initiatives


IABM End-User Survey NAB 2016 ICG Endorsement Scheme


IABM End-User Survey NAB 2016 Buying practice – What, Who and How?

0% 20% 40% 60% 80% 100%

One or two people make all major purchases

Team involvement but one person decision

Team Decision to purchase

Third Party - Dealer or representative

Direct from Vendor

Systems Integrator

One stop shop "end to end" solution provider

Multiple suppliers for custom 'best of breed'

NAB 2016 IBC 2015


IABM End-User Survey NAB 2016 Outlook for the business environment for the organization for the next 2 -3 years

36%

37%

24%

2%

Very Positive

Quite Positive

Neutral

Quite Negative

Very Negative

Re-inventing Broadcast & Media Business

• Peter Ennis - Head of APAC Sales Avid • Srinivasan KA - Co-founder, Amagi

• Charles Sevior - CTO, APJ, EMC² Emerging Technologies

Broadcast Asia 2016 IABM State of the Industry Conference

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