Industry is working toward searching for efficient and, cost-effective solutions to do more with less. In coming years, technology advancement will enable content owners, aggregators, and distributors to reinvent their business models to support profitable growth in the digital era.
The broadcasting sector in the country is at the threshold of entering a new era of digital broadcasting, which would open lots of opportunities to latest technological innovations and enhance the very essence of quality of the reach. The revival of radio, the digitization of cable, and the free-to-air DTH audience growth point to the latent demand for broadcasting in the Indian market at a time when broadcasting in advanced markets in the west is losing out significant space to digital on-demand media platforms.
Both, the ministry of I&B and the Telecom Regulatory Authority of India (TRAI) have been constantly promoting plurality of broadcasting services and multiple distribution platforms for providing choices to consumers to access TV channels and FM radio services. A policy environment encouraging a level playing field for different delivery platforms The Indian broadcasting landscape presents a vibrant picture with presence of multiple distribution platforms in the broadcasting sector.
Broadcasting Business in India
The broadcast industry has evolved significantly over the last decade characterized by growing business models, increased competition, changing regulations, and above all a significant shift in consumer preferences. The industry in India is also undergoing a lot of changes as a result of digitization mandates.
Increasing acceptance of production automation, rising number of digital channels, and analog to digital transition broadcasting, including growing acceptance of HD, are driving the broadcast equipment market in India. Increasing use of HD programming, Internet protocol television (IPTV), and mobile TV are contributing to growth.
Growing attraction of people toward multiscreen services will also impact the market in the coming years. The market growth is propelled by high investment on digitization, broadcasting services, and upgrading of technology by the government. In addition, increasing use of smartphones and tablets provides ample growth opportunities in the video services segment. Advancements in technology result in rapid changes, thus fostering the growth of the broadcasting equipment market. Furthermore, increasing awareness and interest of the end users in the broadcast technology will considerably bring huge positive changes in the market. Multiplatform video delivery equipment is becoming popular in the market.
However, the huge capital investment required for broadcasting equipment, inconsistency, and standardized method of content distribution are restraining factors.
The Department of Industrial Policy and Promotion (DIPP) has issued a consolidated FDI policy effective from August 28, 2017. A l00 percent FDI is allowed in broadcasting carriage services; teleports, DTH, cable networks, mobile TV, and HITS follow an automatic route for both digital and non-digital carriage services. In broadcasting content services, 49 percent FDI is allowed for terrestrial broadcasting FM and up-linking of TV channels for news and current affairs. A 100 percent FDI is allowed for up-linking of non-news and current affairs TV channels/down-linking of TV channels. Infusion of fresh foreign investment, beyond 49 percent in a company not seeking license/permission from sectoral ministry, resulting in change in the ownership pattern or transfer of stake by an existing investor to a new foreign investor, will require government approval.
Adoption of New Technologies
The liberalized foreign investment policy, rapidly expanding huge market, and digitization of the broadcasting sector provide a vast potential for future growth and opportunities for foreign players and investors. The broadcasting sector has seen a rapid evolution of production and transmission technologies. Once the new technologies are standardized, these are to be adopted and deployed by the stakeholders. Broadcasting transmission networks operate under a regulatory framework where government permissions, wireless operating license, and frequency allocation, and likewise are pre-requisite before offering broadcasting services.
In the current scenario, carrying out technology trials with an objective to understand new technologies for assessing their potential and suitability for adoption in Indian context is not facilitated by the current policy and regulatory framework. Such trials can only be done as being a regular service provider will require fulfilling requisite eligibility criteria and obtaining the permission and licenses as applicable in case of launching regular services.
This discourages technology innovation and adoption of new technologies. It may therefore be helpful to devise policy guidelines to encourage development of an ecosystem that will foster development and adoption of new technologies in the sector.
TRAI aims to remove the entry barriers in the sector by laying down well-defined and transparent procedures, facilitate innovation and technology adoption in the sector, and introduce investor friendly policies.
The government has launched an ambitious program of reforms, aimed at making it easier to do business in India. The authority is of the view that the sector has immense potential to further move in a higher trajectory of growth, if a more conducive business environment is created by simplifying the existing provisions of policy and regulatory framework related to the broadcast sector.
4K services, OTT services, software-based broadcasting, IP, cloud computing, and virtual reality are some trends prevailing both globally and domestically. In coming years industry is likely to see more technology evolution at a faster pace. However, the challenge is to leverage these developments and trends to deliver better business outcomes and better audience experiences in a rapidly changing market.
4K services. Over the next four to five years 4K services are expected to be available on IP networks via satellite launching and cable platforms. Content creators across the region are shifting toward 4K cameras in order to capture high-definition video. This is being supported by sales of 4K UHD televisions that has gained momentum due to rising disposable income in the region. Streaming services are popular amongst the younger generation. The trend shows that young adults prefer watching content on digital platforms than on TV. The streaming data broadcasters will follow the 4K trend and will film and upload their new content in this format. This dynamic ecosystem will continue to generate lots of investments in 2017.
OTT. Broadcasters and OTT players alike are looking for new ways to vie for viewership, and some players, including Netflix and Amazon, have turned to investing heavily in fresh content. They are also making a strong global push, with Netflix launching its services in more than 130 countries covering most of Asia last year, and Amazon rolling out its video-streaming service into more than 200 countries, including Singapore and India. OTT providers are now releasing content in UHD. Ericsson Mobility estimates that by 2021, video will represent 70 percent of the mobile traffic and experts have predicted that by 2025, 50 percent adults under the age of 32 will not pay for TV. Growing market for OTT service will enable content availability on multiple devices anytime and anywhere. New SVOD, TVOD, and AVOD services will also emerge this year and they will concentrate on the mobile revolution.
Software-defined broadcasting. There is a worldwide inclination toward software-based solutions, which are high on speed and can be IP connected so that upgradation may be possible with little hardware replacement. The transition from hardware-provided products to software-provided products that began in 2016 will go on in upcoming years. This evolution enables those who are building and managing broadcast systems to have more flexibility and control. The shift will not be easy because the existing software designs will be redesigned. Software-defined broadcasting is currently used for VR implementations, but will be expanded to micro services-based architecture, and container-based models.
Next-generation IP. Media companies worldwide unified their operations under information technology (IT) infrastructure and this shift gave them greater efficiency in their daily operations. However, now the shift gets deeper converging the traditional SDI video into IP to have a greater scope of benefits to use this type of content with ones and zeros. In 2016, there was a shift from SDI to IP-based transport in broadcast and studio facilities. The first step was the development of protocol SMPTE 2022. Now, the industry is focusing on native IP implementation based on the work of SMPTE, AMWA, and VSF. One of the greatest motivators for IP-based routing is to lower costs of production. With the appearance of the 10 GbE cable it is now possible to take four HD-SDI cables to carry a single 4K signal with a light compression or even no compression. The Indian IP scenario is undergoing a transformation. The present government has realized the importance of a balanced IP system to address the country’s innovation and development-related objectives. They are committed toward making the Indian IP climate suitable for innovation and technological growth in India but there is still a long way to go in order to establish a favorable and encouraging IP ecosystem in India.
Better cloud. 2016 has seen a gamut of cloud applications and more applications will appear in 2017. Companies, small, medium, and large have already invested a great deal on cloud applications and these numbers are expected to grow exponentially in the following year. IT developers in most organizations are streamlined to focus on cloud-based services. As per Forrester Research, almost 79 percent of Indian companies have a cloud related initiative in place within the organization and are planning to implement cloud as a service in the coming year. Strategists recommend all organizations to adopt a hybrid-IT approach, and invest in private and public cloud to comfortably adapt with change. Unquestionably, India has the capability and the human intellect to become the global hub for cloud computing. The future of cloud computing seems bright in India. 2018 will welcome very sophisticated and scalable services on these platforms. The costs will be lower and the GPU more flexible.
Rental sports equipment. Increasing number of cricket leagues across the globe has been a game changer for the rental market of the broadcast equipment. It has been another major revenue generator for the broadcast equipment market. In addition, increasing need for the preciseness in the decision review system is another factor that is propelling the need for the inclusion of hi-tech cameras in majority of the sports. Increasing demand for various types of equipment in the broadcast of various sports leagues has been propelling the rental companies to augment the number of kits. Until 2016, drones were used by major sports broadcasters to cover sports events. However, in coming years the drone scene will become more entertaining. Major sports broadcasters like ESPN, Eurosport, and Sky are gearing up for drone racing competitions to attract the young audience.
Global Market Scenario
Spurred by the rise of digital broadcasting, the global broadcast equipment market is expected to be valued at USD 5.82 billion by 2023, growing at a CAGR of 4.87 percent between 2017 and 2023, estimates MarketsandMarkets. The market growth can be attributed to the radical shift of products from hardware oriented to software and open architecture based; rising demand for ultra-high-definition (UHD) content production and transmission; and increasing direct 2 consumer (D2C) offerings through OTT services and multichannel networks in developed economies.
The market in the APAC region is expected to register a CAGR of 8.1 percent from 2016 to 2024. The growth is primarily driven by convergence of high-definition technologies like 4K with IP.
The increasing number of broadcasters offering D2C propositions through OTT services, along with traditional distribution routes, is fueling the growth of the market for video servers. In broadcasting, servers act as hosts and are used to deliver various contents or videos. Broadcast video servers often store hundreds of hours of compressed audio and video, play out multiple and synchronized simultaneous streams of videos, and also ensure quality interfaces like SDI for digital video and XLR for balanced analog audio, and AES/EBU digital audio.
North America held the largest share of the broadcast equipment market in 2016. The increasing number of cable and satellite television channels and the rising penetration of the Internet have provided broadcasters with many choices for their own creative and political expression. The growing cultural diversity throughout North America has also led to the increase in the number of broadcast channels, which, in turn, has boosted the demand for broadcast equipment in this region. Europe is also one of the potential markets for broadcast equipment.
Some of the major players dominating the global broadcasting equipment market are Grass Valley, Blackmagic, Imagine Communications, Cisco Systems, Ross Video, SAM, ARRIS Enterprise Inc., Ericsson A.B., ChyronHego Corporation, Harmonic Inc., Sony Corporation, and Belden Inc. Other key vendors influencing the global market include AtemeVerimatrix Inc., Envivio Inc., Minerva Networks, Thomson Video Networks, Azuki Systems Inc., Alticast Solutions, Anevia, Edgeware AB, and Elemental Technologies, XOR Media Inc., FOR-A Company, ORACLE Corporation (US), Unlimi-Tech Software Inc., and General Dynamics Mediaware.
High-speed Internet connectivity and broadband infrastructure, smartphones and live streaming apps, social networking, and cutting-edge technology have transformed the broadcaster’s experience from linear to an era of whatever, wherever, and whenever experience.
Industry is working toward searching for efficient and cost-effective solutions to do more with less. In coming years, technology advancement will enable content owners, aggregators, and distributors to reinvent their business models to support profitable growth in the digital era.
While organizations are looking to build out digital strategies, the economic and business models required to succeed in the digital landscape are challenging and would require a significant shift in mindset and approach. Further significant changes in the regulatory environment are also impacting business models. In this changing paradigm, organizations would need to be nimble and flexible and operate with a long-term integrated strategy to build sustainable business.