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Tech Dazzles in the Desert

Some 1,400 technology vendors rolled the dice at the National Association of Broadcasters show in Las Vegas, and plenty said they were rewarded with a handsome payoff. Companies ranging from large manufacturers of transmission and infrastructure hardware to small suppliers of editing and graphics software almost unanimously said they are enjoying their strongest sales in years, thanks to the growing popularity of multicasting, mobile video and high-definition television.

Attendance was at a record 105,046, up more than 1,000 over last year. The Radio-Television News Directors Association reported big gains at its simultaneous Vegas conference, too; its 1,140 head count was up 4% from 2005.

Tech vendors were unabashedly optimistic. Quantel CEO Ray Cross says 2006 sales for the U.K.-based editing and graphics vendor are up 80% over last year, and Quantel aims to double its U.S. business over the next year. “It’s phenomenal growth,” says Cross.

Harris Broadcast, one of the broadcast-technology giants with more than $500 million in annual sales, reports significant growth, too. Its infrastructure business has been growing 12%-15% over the past three years, says new CEO Tim Thorsteinson, and 2006 sales are pacing well worldwide. “It’s strong geographically across the board,” he says. “For the first time, the U.S., Europe and Asia are all strong.”

It was a familiar refrain. Graphics supplier Chyron had its best year in 2005 since 1998, and CEO Michael Wellesley-Wesley expects continued growth this year. He attributes much of it to high-definition television: “HDTV is now coming down the pike as a worldwide phenomenon.”

Several vendors agree. Alec Shapiro, marketing director for Sony Broadcast, says both the upcoming soccer World Cup and China’s plan to broadcast all of the 2008 Olympics in high-def are driving interest in HD equipment. “There are a lot of people from China that are here shopping for Beijing [Olympics],” he says.

Wellesley-Wesley says that many U.S. broadcasters spent money in the late 1990s on the transmission equipment necessary to launch DTV but held back on upgrading their studios and news equipment. Now, with HDTV and multi­casting growing and analog TV’s hard date approaching, the rate of spending on production gear has increased. “The normal capital-equipment upgrade cycle is becoming compressed,” he says.

Broadcasters Get Onboard

Five years ago, compression supplier Harmonic had a hard time explaining to some broadcasters why they should compress multiple streams within their DTV signal or encode content to be delivered on such platforms as the Internet.

That is not a problem today, says Harmonic VP of Sales Glen Sakata, because a standard “station-in-a-box” configuration that Harmonic sells for DTV (at around $100,000) includes HD and SD encoders and a statistical multiplexer that squeezes maximum efficiency from the available bandwidth.

As broadcasters launch content on multiple platforms, they aren’t looking to hire additional staff to produce and manage the streams. So automation software that controls content playback and storage functions is selling well, as are automated graphics systems that insert local branding and commercials into the new digital streams. Also selling well are production systems that delegate labor-intensive tasks, such as logging, to lower-ranking employees.

“Whether it’s in post-production or broadcast, people are finding budgets are tight,” says Chas Smith, general manager of Avid Technology’s video division. “They want to produce more content and do HD, with the same number of people or less.”

Miranda Technologies, a Montreal-based vendor of master-control infrastructure, monitoring and branding gear, enjoyed a 30% growth rate in 2005, much of it driven by products that allow broadcasters to insert logos or sponsored graphics into compressed digital streams. It is acquiring graphics-software supplier VertigoXmedia for roughly $9.7 million to expand into the production-graphics realm.

But the real value of VertigoXmedia is in the back-office software that automates the playback of a graphic from information in a database. “Broadcasters are doing so much of it on so many channels, they need the back-office tools to manage it,” says Miranda CEO Strath Goodship. “The graphics and branding part is the easy part.”

One of the delivery channels that broadcasters may look to brand is mobile video. Some have already partnered with wireless carriers to deliver local content over existing cellular networks. Over the next year, new national mobile- TV platforms plan to broadcast multiple channels of live, streaming video to next-generation handsets, and they will need content to fill that pipe.

Indeed, mobile TV got lots of buzz at NAB. Part of that was attributable to the announcement by spectrum aggregator Aloha Partners that it will launch Hiwire, a mobile TV, music and datacasting service that will use 12 MHz of spectrum—twice the bandwidth that Qualcomm’s MediaFLO service aims to use. Broadcast conglomerates such as Harris and Thomson, both highlighting mobile-TV solutions in Vegas, also see mobile video as a significant opportunity for their transmitter businesses, as well as for encoding and content-management software.

Like Crown Castle’s mobile video venture Modeo, Hiwire has selected the DVB-H mobile-transmission standard, which was being demonstrated by multiple transmitter vendors and handset companies such as Nokia. “We went with DVB-H because it was an open platform with a tremendous ecosystem of existing suppliers,” said Hiwire President/COO Scott Wills in a panel discussion. “It gives the carriers a choice of different technologies.”

Qualcomm was showing MediaFLO in the “Next Generation Content Delivery Showcase,” using two live transmitters to deliver 16 channels of programming to a FLO-capable handset. The demonstration included content from networks such as MTV and CNN, with each channel delivered at an average rate of 250 kilobits per second. The picture could be viewed in a widescreen format by holding the phone horizontally and pressing a button, and channel changes took 1½-2 seconds, less than a channel switch for digital cable.

Although broadcasters have raised interference concerns about MediaFLO, several were still impressed by its picture quality. “The screen on that phone was outstanding,” says Bob Ross, VP of East Coast operations for CBS. “I would watch that if I was stuck in an airport.”

“A Deal A Week”

Thomson is bullish on video-to-go, too, seeing 100% growth in mobile-TV revenues across every product category. Marc Valentin, president of Thomson’s Grass Valley business, says there is a big push in Europe to launch mobile-video services for this summer’s World Cup: “We’re doing a deal a week.”

Valentin believes mobile video represents an opportunity for broadcasters as well. “You’re not squeezing money out of the TV set,” he says. “This is a whole new space and time for the consumption of content.”

“[Harris sales are] strong geographically across the board. For the first time, the U.S., Europe and Asia are all strong.” Tim Thorsteinson, Harris Broadcast