This is the first of a series of articles that discuss select findings from Devoncroft’s 2021 Big Broadcast Survey (BBS), the largest annual global study of media technology industry trends, technology purchasing plans, and benchmarking of technology vendor brands.
Measuring the Most Important Trends in the Global Media Technology Sector
Devoncroft Partners’ annual global study of the media industry – the Big Broadcast Survey (BBS) – has been conducted uninterrupted for past 13-years, making it the longest-running and most comprehensive study of the media and broadcast industry. During the 2021 calendar year, we were fortunate to again benefit from the candid opinions of several thousand media technology professionals in 100+ countries.
Large, representative samples are only way to reliably track and predict technology adoption in the global media industry and we very much appreciate the time and effort that respondents devote to the BBS each year. We read all feedback from BBS respondents. Your comments are used to evolve the survey.
For those parties interested in a more detail review of the data gathered in the 2021, multiple Reports are available for immediate delivery.
How Trends are Selected for Inclusion in the BBS Media Technology Global Trend Index
For equal parts fun and to set up the import of measuring trends, we thought it might work best to lean on an M&A illustration of just how much the “media” industry – and by extension the media technology sector – has changed since the advent of the Big Broadcast Survey. The below chart visualizes a selection of M&A transaction since the BBS began. Deals featuring Disney as the buyer are interspersed in the middle to give the flanks of the chart added context.
When Activision Blizzard bought out Vivendi in mid-2013, it was in a transaction valuing the business at $9.8 billion. For those less familiar with Activision Blizzard, their ‘about us’ begins “We create the most epic interactive gaming and entertainment experiences on earth immersing players in new, unimagined worlds.” Their inclusion in the above is because of the organizations large annual purchases of media technology to drive business outcomes; Activision Blizzard just happens to employ its media technology infrastructure in the verticals of gaming and eSports. A year after Activision Blizzard purchased its independence, another large purchase of media technology AT&T would announce its intension to acquire DirecTV. The transaction created the largest pay TV provider in the world, in a deal valued at $67 billion.
All business involved in those deals were public and these values then had a measure of corroboration about the future business value of the respective operations and verticals.
Contrast the valuation levels observed more recently against those precedent deals.
In February 2021, AT&T announced its intention to divest DirecTV to private firm TPG in a deal valuing the DirecTV enterprise at $16 billion. In other words, a different consensus had been reached about the future of the pay TV industry. Last week, Microsoft announced an acquisition agreement with Activision Blizzard valuing the enterprise at $68.7 billion, a seven-fold escalation in value from its 2013 levels. Further, observe the comparative pricing of Disney’s acquisition of Fox versus Activision Blizzard.
The example is illustrative of a rapidly changing market environment where trends, and alignment with trends, goes a long, long way to dictating positive (and negative) outcomes for stakeholders. Moreover, the respondents themselves are changing with the emergence of a variety of (large) verticals outside of traditional media leveraging professional media technologies.
In tracking trends in the global media technology sector for over the past decade our objective has always been to ensure we are measuring the market developments most relevant to industry decision makers. Before publishing the survey, we spend a considerable amount of time seeking feedback from a wide variety of industry professionals about all aspects of the data we collect through our research activities.
As part of this process, the composition of the BBS Industry Global Trend Index is reviewed each year in conjunction with Devoncroft clients, media technology end-users, and a variety of domain experts. New trends are added to the Index when BBS stakeholders believe that the value of this additional trend information outweighs the resulting distortion of the year-over-year comparisons.
A deliberately conservative strategy is used when considering adjustments to the index. By keeping changes to a minimum, we allow for a more straightforward comparison of how trends were ranked versus previous iterations of the survey.
Based on discussions with clients, end-users, and experts during the planning stages of the 2021 BBS project, we decided to maintain the same list of trends as last year. The primary benefit of this approach is a one-to-one comparison of how trends were ranked in 2020 versus 2021.
The 2021 BBS Media Technology Global Trend Index
One of the key outputs of the BBS is the annual BBS Media Technology Global Trend Index, a ranking of the media industry trends that are considered by BBS respondents the most commercially important to their businesses in any given year.
To create the 2021 Big Survey Global Trend Index, we presented BBS respondents with a list of 20 industry trends and asked them to select the one trend that is “most important” to their business, one trend that is “second most important” to their business, and the other trends (plural) they consider “also very important.”
We then apply a statistical weighting to these results, based on how research participants ranked the commercial importance of each trend.
Please note the goal from this question is to help clients gain insight into the business drivers behind the respondent’s answer. Therefore, respondents were asked to rank these trends in the context of the commercial importance to their business, rather than “industry buzz,” or “cool technology,” or marketing hype.
The 2021 BBS Industry Global Trend Index is shown below.
When reviewing the data presented above, readers should note the following about the 2021 BBS Industry Global Trend Index:
- It is a measure of what research participants say is commercially important to their businesses in the future, not what they are doing now, or where they are spending money today
- The chart above is visualized as a weighted index, not as a measure of the number of people that said which trend was most important to them
- It measures the responses of all technology purchasers (i.e. non-vendors) who participated in the 2021 BBS, regardless of company type, company size, geographic location, job title, etc. Thus, the responses of any demographic group such as a company type or geographic location may vary widely from the results presented in this report.
Analyzing the 2021 BBS Industry Global Trend Index
‘Multi-platform content delivery’ was again the top ranking in 2021, having only been displaced during the 2019 calendar year since first registering as the top trend in 2010. In keeping with the theme of how trends shape outcomes, it is well established how businesses well-positioned with the transition to OTT have been richly rewarded. Below is a stock plot for Netflix beginning on the first trading day in January 2010 when the stock closed at $7.64 and concluding on the last trading day of October 2021. Netflix closed at $690 on that fall day, a nearly 9,000% increase in the almost eleven-year time span. Each dollar invested in Netflix in January 2010 would then have become more than $90 dollars in late 2021.
Those having tracked the recent volatility in the stock market will anticipate the setup. Since October 29th of last year, Netflix has declined almost 47% to today’s close of $366. Life comes at you fast.
Has there been a material change in the business of Netflix during the last 60 business days or is the revaluing representative of a new thought equilibrium about the environment and the business model of OTT? Or perhaps a return to pre-pandemic levels of pricing is suggestive of the 18-month period after March 2020 was something of an abbreviation in the media world?
Bookending the 2021 BBS Trend Index is ‘Outsourced operations (playout, transmission, etc.).’ The lack of interest in outsourcing in the media industry over the past decade has been equal and opposite of ‘Multi-platform content delivery (OTT, web, mobile etc.)’ with ‘Outsourced operations’ registering as last or approximately last in the annual trend index since the 2010 calendar year. Taken together with other findings in the BBS, there emerges a relationship between the importance of ‘Multi-content platform content delivery’ to the future of an organization, how technology is critical to shaping that future, and the utter lack of interest in outsourcing those capabilities in full to third-parties.
A much more thoroughly analysis of the trend index is included in the 2021 BBS Executive Summary provided to all respondents to the 2021survey. For other interested parties, the 2021 BBS Executive Summary is also available from our storefront.
The information in this article is based on select findings from the 2021 Big Broadcast Survey (BBS), a global study of media technology industry trends, technology purchasing plans, and benchmarking of technology vendor brands. Several thousand media professionals in 100+ countries took part in the 2021 BBS, making it the largest and most comprehensive market study ever conducted in the broadcast and media industry. The BBS is published annually by Devoncroft Partners.
Granular analysis of these results is available as part of various paid-for reports based on the 2021 BBS data set. For more information about this report, please contact Devoncroft Partners.
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