Media technology products and services markets both in decline
WORLD: The latest research from IABM DC (a joint venture between the IABM and Devoncroft Partners) shows the total market for media technology products and services declined 4.3 per cent to US$49.3bn in 2015. While product revenues have been in decline since 2012, this is the first year when services revenues have also decreased.
The 2016 Global Market Valuation and Strategy Report points to a number of factors within the global broadcast market which have led to the year-on-year decline. These include significant currency fluctuations, ongoing consolidation among media organisations and the strategic move from CAPEX to OPEX as end-users evolve their business models.
The numbers behind the report state that revenues in 2015 from products (including hardware, software and associated maintenance and support) declined 4.4 per cent to US$22.01bn, accounting for 44.6 per cent of total industry revenue. Services revenues (including systems integration, consultancy, postproduction, services to live production, managed services, playout, CDN, Infrastructure as a Service, OTT/OVP platforms, and terrestrial and satellite transmission infrastructure) declined 4.2 per cent to US$27.31bn – 55.4 per cent of total industry revenue.
‘The commercial models of many broadcasters and media companies have changed dramatically over the past few years,’ said Joe Zaller, founder and president of Devoncroft Partners. ‘The combination of new digital and online delivery platforms, the shift to file-based workflows, the increasing drive for digital monetisation, and the promise of COTS IT hardware managed by software defined networks have all been catalysts for an industry-wide rethinking of both what technology is required to support future business goals, and whether it will be purchased or outsourced. We believe these factors will continue to alter the structure of the industry through the end of our forecast period – 2019.’
‘Although aggregate industry growth declined overall in 2015, the broadcast and media technology market is still undoubtedly a dynamic and exciting place to be,’ added IABM CEO, Peter White. ‘There was a significant impact on revenues overall from extensive weakening of most currencies against the US Dollar in the year, which particularly impacted services revenues in EMEA where there is a concentration of services suppliers. In addition, although revenues in the majority of product categories experienced a degree of decline, some segments of the market are growing strongly.
‘The changing media landscape of the demand side of the industry is clearly affecting the supply side, and many organisations throughout the broadcast and media ecosystem have had to reinvent themselves,’ he continued. ‘Despite a continuing downward trend so far in 2016, confidence still remains in the sector and spend on research and development is continuing at impressively high levels. We are experiencing a wave of innovation and change both from existing suppliers and from new entrants in the market which is fuelling cautious optimism for 2016 and beyond; our industry clearly believes that it can win through and is backing itself to do so.’
The 2016 Global Market Valuation and Strategy Report provides market sizing data for approximately 150 product categories across nine market segments. Data tables provide regional splits for product and service revenues, as well as forecasts to 2019 at segment and sub-segment levels. The data tables are accompanied by written commentary that discusses the drivers affecting the market and analysis of how changing markets and technologies may shape the future composition of the broadcast and media technology industry.