- Traditional broadcast operations make up 80% of revenue
- Company priorities: Efficiency, agility & interoperability
- Multi-platform delivery important for tech users
New media competitiveness has urged companies to pursue efficiencies and multi-platform delivery has shifted business priority to Opex over Capex, according to the IABM.
Efficiency was found to be the most important driver of products purchased, followed by interoperability and agility, with media companies citing the shift in technology infrastructure as the main catalyst.
According to the IABM’s latest Buying Trends report, technology users are focusing on solutions that make them more efficient, agile and interoperable and as a result are spending more money on generic IT solutions.
It also found media companies are increasingly investing in in-house developments to suit their specific needs with 78% of respondents positive about the business environment despite the changes affecting the industry.
25% reported their companies still derive more than 80% of their revenues from traditional broadcast operations but expect this to reduce over the coming years.
Overall, revenue has grown 5.3% to 9.3% while profit growth remains down at -2.4%, a slight rise from -2.6% during the same period of 2018.
The report highlighted profits are declining across all organisation types with the advertising model under more pressure than that of Pay-TV business model.
Traditional advertising and subscriptions-based business models continue to be under competitive pressure from new media and its wide range of direct-to-consumer (DTC) offerings.
Multi-platform content delivery remains the most important priority for technology users.
This was followed by 4K and ultra-high definition (UHD), which is consistent with the industry uptake and adoption of 4K and UHD spending through the increased investment in premium content by new media operators.
According to the IABM, the shift in technology spending is prompting end-users to adopt a variety of emerging technologies to streamline their supply-chains for the multi-platform world.
While IP and cloud adoption are already strong, promising technologies such as artificial intelligence (AI) remain emerging trends.
However, blockchain adoption remains at a very early stage with an adoption rate of just 3% and virtual reality (VR) spending remains subdued and is unlikely to significantly increase in the next six months.
IABM head of insight and analysis Lorenzo Zanni said: “These results show that the demand side of the industry continues to go through a radical shift, with changing revenue models influencing the trends in media technology investment.
“Although technology investment has shifted to new priorities, technology has never been so key to driving business success in the multi-platform world.
“Buyers’ continued adoption of new technologies requires suppliers to move to new business models centred on the flexible provision of software. With change, the future is bright as greater investment is poured into content.”