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NAB 2014: Notes from the Show Floor - Industry Challenges

Industry Challenges

The NAB delivered a stinging rebuke to the FCC yesterday, demanding a National Broadcast Plan to counter the U.S. government’s apparent focus on broadband to the detriment of “free and local” over-the-air broadcasting. In the keynote address in Las Vegas on Monday, Gordon Smith, President and CEO of NAB, said broadcasting’s vital role in society was threatened by the voracious appetite of the wireless industry.

“The wireless industry covets our spectrum, because they chew through their massive allocation of spectrum, attempting to deliver the video we deliver far more efficiently. And they continue to milk, bilk and bill by the bit. Our content, our connection to local communities and our spectral efficiency make us the envy of others. We are a competitive threat,” Smith said.

On the other hand, Smith acknowledged that the world was changing. Throughout the marketplace, he said, we are beginning to see the incredible power of the convergence between broadcasting and broadband. “A future that includes both is bright,” he said. “Broadband, much like broadcast radio and television, is a game-changer. It has enhanced the ways we communicate, creating new platforms for consumers to deliver and receive content.”

So as I plow through a long Day 2 of NAB, I find myself wondering, is the whole broadcast technology business doomed, as IP-based technologies and broadband delivery successfully takes over the industry? Will there even be an NAB Show in 10 years?

Well, the IABM also weighed in yesterday with the release of its Industry Index Report valuing the sector globally at nearly $40 billion worldwide. Not insignificant figures, though perhaps small-fry compared to the telco and IT industries.  Growth in the US remains strong at 8.4%, but profitability is predominantly centered in large companies that are able to leverage the possibilities offered by IT technologies to broadcasters.

While these recent figures fuel optimism, it is clear that the industry has to embrace change to survive. Among equipment suppliers, this means more collaboration and the adoption of open standards that enable efficiencies and effectiveness in the broadcast chain and multi-platform delivery.

Our CEO, Charlie Vogt, told the NAB conference yesterday that the biggest challenge to the industry right now is the need to align on common standards. “I don’t think small and large broadcasters will continue to build on proprietary networks; they are very costly and they have to keep upgrading the software and hardware, Vogt said. “We’ve got to find a way as equipment suppliers to align on IP-based standards and software-based architecture.”

Collaboration is also key. “I don’t see the ecosystem this industry needs,” Vogt continued. “And I’m willing to give up some competitive elements to achieve more openness. We need more collaboration. I feel that companies like us and Grass, with our global scale, need a lot more collaboration with larger scale and smaller scale companies. There is still a lot of innovation possible, but a lot of cost efficiencies have to be realized.”

These industry pressures were behind our company’s acquisition of Digital Rapids, announced at the show. “Without the scale in sales and service, small companies can’t reach all countries.” With Digital Rapids, he said, “here’s a great company doing great things, but able to reach a limited number of customers”. It needs Imagine Communications global reach to realize its full potential.

So perhaps the broadcast industry is not doomed.  But with threats and opportunities on every side, I believe that how companies adapt to these challenges will determine to a large extent whether they will still be here next year, never mind five or 10 years down the road.

By Glodina Connan, Director of Product Marketing, Imagine Communications