broadcast & media technology transformation: facts & figures · pier silvio berlusconi,...

Broadcast & Media Technology Transformation:

Facts & FiguresLorenzo Zanni, Head of Insight & Analysis, IABMLorenzo Zanni, Head of Insight & Analysis, IABM

IABM Copyright 2019@THEIABM www.theiabm.org

Contents

Drivers of Change

Drivers of Change

Supply Business

Transformation

Supply Business

Transformation

Sources: IABM, Variety, Seeking Alpha

Drivers of Change


3 Drivers of Change – The 3 Faces of Digital

#1 Digital Warfare: Traditional and new media companies continue to launch streaming offerings to attract digital eyeballs. Welcome to the new media battlefield.

#2 Digital Inflation: As the number of digital outlets increases and investment in content skyrockets, only a few will keep up with the giants while others rise to appeal to niche audiences.

#3 Digital Speed: Everything is quicker in the brave new digital world as consumers’ expectations reach new levels. Media companies are responding to this shift by streamlining their operations.


Digital WarfareConflict Escalation

Sources: IABM, Digital TV Research

• Disney launched ESPN+ in 2018 and set to launch Disney+ this year

• Apple set to launch streaming service this year after 1$bn investment in 2018

• WarnerMedia to launch a streaming service this year

• BBC and ITV to launch joint UK streaming service this year

• BBC and Discovery to launch joint streaming service focused on wildlife programming

• TF1, Télévisions and M6 removing content from Netflix and Amazon after 2018 streaming launch

More Media Companies Go Direct!More Media Companies Go Direct!

2017 2018 20190

200

400

600

800

1000

1200

Pay-TV SVOD

Mill

ion

Su

bs

Global Subs: Pay-TV vs. SVODGlobal Subs: Pay-TV vs. SVOD


Digital WarfareWorldwide Battle

• Disney launched ESPN+ in 2018 and set to launch Disney+ this year. Planning to expand Hulu and Disney+ internationally

• Apple to launch a global SVOD service

• WarnerMedia to launch a global streaming service this year

• Comcast plotting a global streaming service after Sky’s acquisition

• BBC and Discovery to launch joint global streaming service focused on wildlife programming

• Discovery to launch global streaming service focused on golf

More Media Companies Go Global!More Media Companies Go Global!

Sources: IABM

ImplicationsImplications

TV Exports RiseData from the UK, France and even emerging content markets like Turkey points to double digit growth

TV Exports RiseData from the UK, France and even emerging content markets like Turkey points to double digit growth

Scale & ComplexityScale needed for global services. Added complexity in making it work, from content localization to rights management

Scale & ComplexityScale needed for global services. Added complexity in making it work, from content localization to rights management


Digital WarfareData Snippets

Sales & Profits – Broadcast vs. FAANGsSales & Profits – Broadcast vs. FAANGs

Broadcast FAANGs-5%

0%

5%

10%

15%

20%

25%

30%

Sales ChangeProfit Change

Broadcast FAANGs0

500,000,000

1,000,000,000

1,500,000,000

2,000,000,000

2,500,000,000

3,000,000,000

Th

ou

san

ds

USD

Current Market CapitalizationCurrent Market Capitalization

Sources: IABM


Digital WarfareAlliances

OTTMany joint DTC initiatives in Europe – France (Salto), UK (Britbox), Spain (LOVEStv), Germany (Joyn). Broadcasters also vouching to collaborate on streaming tech

OTTMany joint DTC initiatives in Europe – France (Salto), UK (Britbox), Spain (LOVEStv), Germany (Joyn). Broadcasters also vouching to collaborate on streaming tech

AdvertisingRise in number of collaborative initiatives to increase audience size and improve addressability (European Broadcast Exchange, Blockchain Insight Platform, Sky/Virgin partnership, Project OAR, RTL/Prosieben partnership)

AdvertisingRise in number of collaborative initiatives to increase audience size and improve addressability (European Broadcast Exchange, Blockchain Insight Platform, Sky/Virgin partnership, Project OAR, RTL/Prosieben partnership)

Alliances Focus on Revenue-Generating ActivitiesAlliances Focus on Revenue-Generating Activities Investment in Tech Suppliers Following Similar PatternInvestment in Tech Suppliers Following Similar Pattern


Digital WarfareAlliances

Pier Silvio Berlusconi, Mediaset Deputy Chairman & CEO

May 2019

European media companies like us need to join forces if

we are to continue to compete, or even just resist,

in terms of our European cultural identity, eventual

attacks by the global giants

European media companies like us need to join forces if

we are to continue to compete, or even just resist,

in terms of our European cultural identity, eventual

attacks by the global giants

Is More Consolidation Coming to Europe?Is More Consolidation Coming to Europe?

• Canal+ bought Pay-TV operator M7 for $1.1bn at the end of May 2019

• Mediaset bought 9.6% in ProSiebenSat.1 for $380m at the end of May 2019

• Market is very fragmented, more could happen as European broadcasters search for scale

• Consolidation and collaboration aim to address cost of competing with FAANGs on ad revenues, streaming and content…


Digital InflationContent Bonanza

Sources: IABM, Variety, MSCI, Statista

Given the success of Hulu so far in terms of subscriber

growth and the relative brand strength and other things too like demographics, we think

there’s an opportunity to increase investment in Hulu notably on the programming

side

Given the success of Hulu so far in terms of subscriber

growth and the relative brand strength and other things too like demographics, we think

there’s an opportunity to increase investment in Hulu notably on the programming

sideBob Iger, Disney CEO

Nov. 2018

2009 2010 2011 2012 2013 2014 2015 2016 2017 20180

50

100

150

200

250

300

350

400

450

500

Number Of Original Scripted Series In The USNumber Of Original Scripted Series In The USThe FAANGs Double Down on MediaThe FAANGs Double Down on Media

Investment up

by over 40%Investment up

by over 40%


Digital SpeedVelocity

Multi-Platform Content Deli...

4K/UHD Production/Deli...

File-Based Workf...

IP infrastruc...

Social Media Broadcas...

Cloud-Compu...

Remote Produc...

Cyber Secu...

Next-Gen Wireless Technologies ...

Big Data Analytics ...

Upgrading Operations to ...

Next-Gen DTT Standard (ATSC 3.0 ...

VR Production/Deli...

Programmatic adverti...

Blockc...

0% 10% 20% 30% 40% 50% 60% 70%

Top Media Tech PrioritiesTop Media Tech Priorities

Sources: IABM, Financial Times

[The iPlayer] is the way people will consume the BBC in the future. We

need more content there and for longer. This is no longer a

catch-up service… it’s a destination

[The iPlayer] is the way people will consume the BBC in the future. We

need more content there and for longer. This is no longer a

catch-up service… it’s a destinationTony Hall, Director General, BBC

Dec. 2018

Supply Business Transformation


Supply Business TransformationBuying Trends - Media Factory

Sources: IABM

Makes us more effic...

Total cost of owner...

Makes us more a...

Cutting-edge techno...

ROI

Installation sup...

Interoperable with other prod...

After sales services & sup...

Reputation of ve...

Vendor roa...

Understanding of our specific n...

Personal relationship with ve...

Availability of trai...

0% 10% 20% 30% 40% 50% 60% 70%

Top Factors Influencing Technology PurchaseTop Factors Influencing Technology Purchase Top 3 Priorities in Content Chain ManagementTop 3 Priorities in Content Chain Management

OptimizeResource utilization and avoid effort duplication

OptimizeResource utilization and avoid effort duplication

PredictUnknown variables and events

PredictUnknown variables and events

GatherData on content, rights, operations, audiences

GatherData on content, rights, operations, audiences


Supply Business TransformationBuying Trends – The Rise of BIY and Partnerships

Sources: IABM,

Digital SpeedNeed to do things

quickly and effectively in multi-

platform world

Digital SpeedNeed to do things

quickly and effectively in multi-

platform world

BIYThrough acquisitions and

internal SW development

BIYThrough acquisitions and

internal SW development

PartnershipsThrough increased collaboration with

suppliers

PartnershipsThrough increased collaboration with

suppliers

We are not looking for products anymore, we

are looking for partnerships where

product development is driven by our requirements

We are not looking for products anymore, we

are looking for partnerships where

product development is driven by our requirementsEuropean broadcaster

responding to our Buying Trends Survey


Create Produce Manage Publish Monetize Consume Connect Support Store0%

10%

20%

30%

40%

50%

60%

70%

80%

Positive Business Sentiment Reliance on Hardware

Supply Business TransformationInvestment is Shifting – Rise of DTC Models & Software

Sources: IABM

Suppliers’ Business SentimentSuppliers’ Business Sentiment

Monetize & ConsumeBroadcasters investing more in Monetize & Consume as they move direct-to-consumer. This is to establish relationships with consumers and monetize them effectively

Monetize & ConsumeBroadcasters investing more in Monetize & Consume as they move direct-to-consumer. This is to establish relationships with consumers and monetize them effectively

PublishIn Publish, 67% of suppliers saying that they customers are focusing investment on internet distribution

PublishIn Publish, 67% of suppliers saying that they customers are focusing investment on internet distribution


Supply Business TransformationInvestment is Shifting – Software/Hardware Divide

Sources: IABM

Demand DriversDemand Drivers Demand in last 6 monthsDemand in last 6 months

SDI to IP

Tra

nsition

Work

flow A

utom

ation

Asset O

ptimiza

tion

Remote

Pro

duction

Multi

-Pla

tform C

ontent D

elivery

Adoption of A

I/Mach

ine Le

arnin

g

Cloud/V

irtualiz

ation

Upgrade to

Imm

ersive

Form

ats

Progra

mm

atic/Targ

eted A

dverti

sing

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

Hardware revenues Software revenues

Increased in the last six months Stayed the same in the last six months

Reduced in the last six months0%

10%

20%

30%

40%

50%

60%

70%

Hardware revenues Software revenues


Supply Business TransformationInvestment is Shifting - Software/Hardware Divide

Sources: IABM

Average R&D Spending as % of SalesAverage R&D Spending as % of Sales R&D FocusR&D Focus

Cloud/V

irtualiz

ation

Advance

d Analyti

cs/A

I/Mach

ine Le

arnin

g

IP T

echnolo

gy

UHD (inclu

ding 4

K, 8K, H

DR, HFR, W

CG)

Advance

d Adve

rtisin

g Tech

nology

Block

chain

VR/AR

0%

10%

20%

30%

40%

50%

60%

70%

80%

Hardware suppliers Software suppliersH2 2016 H1 2017 H2 2017 H1 2018 H2 20180%

5%

10%

15%

20%

25%

30%


Supply Business TransformationSuppliers Move to New Business Models – Revenue Shift

Sources: IABM

H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 20180%

10%

20%

30%

40%

50%

60%

70%

Software revenues (permanent licences) Software revenues (subscriptions/on-demand)

H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018

-10%

0%

10%

20%

30%

40%

50%

60%

70%

Hardware revenues Software revenues Service revenues

Primary Sources of Revenues – All Suppliers

Primary Sources of Revenues – All Suppliers

Licences Vs Subscriptions/On-Demand– Software Suppliers

Licences Vs Subscriptions/On-Demand– Software Suppliers


Supply TransformationSuppliers Move to New Business Models - Revenue Shift

Sources: IABM

Hardware revenues

Software on-demand

Software permanent licences

Software subscriptions

0%10%

20%30%

40%50%

60%70%

80%90%

100%Growing Stable Decreasing

Revenue Sources, Outlook – All SuppliersRevenue Sources, Outlook – All Suppliers

Software permanent licences

Hardware products

Software on-demand

Software subscriptions

0% 20% 40% 60% 80% 100% 120%Growing Stable Declining

Buyers’ Investment, Outlook – All BuyersBuyers’ Investment, Outlook – All Buyers


Supply Business TransformationSuppliers Move to New Business Models – Financial Transition

Sources: IABM

Not surprisingly, our SaaS deal pipeline has grown substantially. While this is good news from a strategic point of view, growing SaaS deal pipeline also creates a short-term booking and revenue headwind, evidenced in the first

quarter, as we're finding the SaaS sales cycle is taking longer as the industry is still climbing the SaaS

learning curve

Not surprisingly, our SaaS deal pipeline has grown substantially. While this is good news from a strategic point of view, growing SaaS deal pipeline also creates a short-term booking and revenue headwind, evidenced in the first

quarter, as we're finding the SaaS sales cycle is taking longer as the industry is still climbing the SaaS

learning curvePatrick Harshman, Harmonic CEOQ1 2019 Earnings Call 2010 2011 2012 2013 2014 2015 2016 2017 2018

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Media Technology Cash Flow/Revenue Index

Media Technology Cash Flow/Revenue Index


Supply Business TransformationSuppliers Move to New Business Models – Financial Transition

Sources: IABM

Now we believe our performance in Q1 shows how we're

successfully increasing our focus on delivering a more predictable

financial model built on more recurring revenues from growth in

our software subscriptions and through long-term agreements.

We will continue to focus on moving to higher-margin software

and SaaS offerings for sure

Now we believe our performance in Q1 shows how we're

successfully increasing our focus on delivering a more predictable

financial model built on more recurring revenues from growth in

our software subscriptions and through long-term agreements.

We will continue to focus on moving to higher-margin software

and SaaS offerings for sure Jeff Rosica, Avid CEOQ1 2019 Earnings Call

H1 2014

H2 2014

H1 2015

H2 2015

H1 2016

H2 2016

H1 2017

H2 2017

H1 2018

H2 2018

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

Sales Growth Profit Growth

Media Technology Revenues & ProfitsMedia Technology Revenues & Profits


Supply Business TransformationSuppliers Move to New Business Models – Cultural Transition

Sources: IABM

We moved from a very small percentage of our business being recurring to 90%. When you sell a

box, you ship the box. Your customer opens the box, and

starts using the product, and you have very little further visibility into what they’re doing. You don’t see

the full customer experience because the biggest (and most

hidden) part is their usage

We moved from a very small percentage of our business being recurring to 90%. When you sell a

box, you ship the box. Your customer opens the box, and

starts using the product, and you have very little further visibility into what they’re doing. You don’t see

the full customer experience because the biggest (and most

hidden) part is their usageRob Giglio, Adobe SVP Sales 2019 Imagine Conference

2009 2010 2011 2012 2013 2014 2015 2016 2017 20180%

5%

10%

15%

20%

25%

30%

35%

Adobe’s Cash Flow/Revenue RatioAdobe’s Cash Flow/Revenue Ratio

Adobe Launches Creative Cloud


Supply Business TransformationThe Cloud Move – A New Ecosystem

Sources: IABM

H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 20180%

5%

10%

15%

20%

25%

30%

35%

AWS Growth Broadcast Tech Growth

AWS & B&M Technology GrowthAWS & B&M Technology Growth

Not at all likely Unlikely Somewhat likely

Very likely We are already doing it today

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

39%

Cloud – Adoption TrackerCloud – Adoption Tracker

UP from 37% UP from 37%


Supply Business TransformationThe Cloud Move – A New Ecosystem

Sources: IABM

Cloud – Preferred Deployment ModelCloud – Preferred Deployment Model

Hybrid...

Private cloud (off-pr...

Public...

Private cloud (on-pr...

Oth

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

PartnershipsRise of partnerships between suppliers and cloud service providers

PartnershipsRise of partnerships between suppliers and cloud service providers

Multi-CloudMulti-cloud challenges to be addressed to meet users’ requirements

Multi-CloudMulti-cloud challenges to be addressed to meet users’ requirements

Business ModelsNew business models of cloud economy, revolution from marketing to accounting

Business ModelsNew business models of cloud economy, revolution from marketing to accounting


Supply Business TransformationThe Cloud Move - AI driving Cloud Adoption

Sources: IABM

Leverage cloud service provider's AI capabi...

Leverage specific AI functionalities in vendor's so...

Internal deployment/recru...

Specialist AI pl...

Oth

0% 10% 20% 30% 40% 50% 60%

NASCAR moves 500,000 hours of content archive (18-petabyte)

in the cloud

NASCAR moves 500,000 hours of content archive (18-petabyte)

in the cloud

AI – Preferred Deployment ModelAI – Preferred Deployment Model

We started to digitize six or seven years ago. We are

jumping into machine learning to automate processes and add

metadata

We started to digitize six or seven years ago. We are

jumping into machine learning to automate processes and add

metadataSteve Stum, NASCAR VP Operations and Tech ProductionJune 2019

Thank you!Lorenzo Zanni, Head of Insight & Analysis, IABMLorenzo Zanni, Head of Insight & Analysis, IABM

broadcast & media technology transformation: facts & figures · pier silvio berlusconi,...

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