Digital Studio catches up with some of the best known faces in the industry to discover more about the key challenges affecting the market and where potential for growth lies.
The past couple of years have been tough for companies involved in the Middle East broadcast and production industry. Mainstream broadcasters have continued to grapple with an ongoing shift away from linear viewing combined with declining advertising revenues, while content producers have struggled amid ferocious competition and dwindling budgets from clients, who seemingly want more for less. Amid this climate Digital Studio spoke to numerous industry insiders to get a comprehensive view of where the industry is at.
One company with its finger on the pulse is Dubai-based distributor Advanced Media. Dealing with hundreds of broadcast and production brands, as well as system integration projects, Advanced Media has a solid overview of the business climate. Pooyan Farnam, sales and technical support, Advanced Media, says that business has been notably tougher for the distributor over the past year. “Talking about professional video, photo and retail, I can say due to higher product and price competition and somehow market saturation, we’ve faced more challenges than before to stay on top. Also, new technologies are coming out almost every day and we need to keep pace with it.”
One of the main challenges in the region has been declining prices in high-end digital cinema cameras as well as the introduction of cheaper HD and 4K recorders. “All this means that the video manufacturers and their distributors have been facing new challenges to keep up the brand performance. On the other hand, this change has given us a lot opportunities to capture a wider markets and attract more individuals to this industry,” Farnam says.
A further benefit is that this means that more people are now using 4K and HD, from high-end users to consumers. Furthermore the quality and creativity of production has improved significantly, and with new platforms and upgrades more content delivery options are available, according to Farnam.
Not surprisingly, Advanced Media sees opportunities opening up to supply more 4K products to high end broadcasters, rental and production houses, individual filmmakers and even prosumers.
While 4K is picking up, Farnam points out that there is still demand in some countries for HD channels, and he expects to see a reasonable level of business for HD playout, studio chains, production and editing work to continue.
He also expects to see some degree of uptick in the systems integration market. “After a slowdown we expect the business to pick up again, with more TV projects from our region and Africa, new demand for high-end digital cinema cameras and lenses and more sales and distribution of video/photo accessories,” Farnam says.
But how is the situation from the perspective of an individual brand? Avid supplies a broad range of content production tools and services, and is well established in the Middle East. Hicham Ismail, solution architect, Avid, describes investments made by clients in the Middle East as “more conservative”. However he adds that being well established in the region has insulated Avid against the worst effects of the slowdown. “For Avid, because we are well established in the region, the general slowdown in the industry hasn’t affected us as much though. We had quite a few big deals that we closed in the last 12 months mostly with the bigger broadcasters,” he said. “We have seen a hesitation in upgrades and investments from the smaller broadcasters and the post houses who have less of a financial backing but a big chunk of our customers are government related with strong financial power.”
In terms of the bigger challenges facing broadcasters in the region, Ismail points to the big technological changes that many players face, especially with 4K and IP-based systems becoming a reality. “Where the technology is heading, it will require broadcasters to make major changes to their infrastructure, which will require a significant financial investment. Furthermore, there is more than a degree of hesitancy. “From one end, this makes customers more hesitant to upgrade parts of their infrastructure now replacing their current solution with newer equipment, seeing how tomorrow is moving to virtualisation and the cloud.
“Although they all know that they will eventually need to jump on that wagon, most are waiting to see how the few leading this change will get affected first before they follow suit,” Ismail says.
“Also the huge investment that this technology brings affects opex vs. capex. The entire structure and infrastructure of businesses need to change. Everyone is waiting to see this vision develop into more concrete solutions,” he adds.