Equipment makers seeing stations stepping up orders

Apr 15, 2002  •  Post A Comment

Television stations are starting to spend money again, according to equipment makers such as Thomson Multimedia, Leitch and Editware, which offered encouraging but cautious news last week at the National Association of Broadcasters Convention in Las Vegas.
New broadcasters will also help pace the growth over the next five years, said Philip Langsdale, CEO of BBC Technology in the United Kingdom.
He cited a study commissioned by BBC Technology and conducted by research firm Analysys that predicted spending in North America and Europe by new and traditional broadcasters will nearly triple by 2007 to almost $27 billion from $10 billion in 2001.
Such growth will be driven by the transition to digital television, by broadcasters’ implementation of new technology that lowers production costs and by an expansion in the types of companies that need media technology services, he said. “We’re seeing more and more businesses turn to media and broadcast transmission as a way to communicate,” he said.
In addition, cable and broadcast networks will continue to add new services such as personalization and interactive TV in an effort to grow and retain their customer base, he said.
Equipment makers aren’t offering such heady predictions but are cautiously optimistic. “Business hasn’t recovered fully,” said Tim Thorsteinson, the former CEO and president of Grass Valley Group in Nevada City, Calif., who is now a vice president with Thomson Broadcast Solutions. “It’s not as robust as it was.
But it’s come back from where it was six quarters ago. It’s a steady improvement. There should be some pent-up demand in the market for capital spending. We hope it will be in the second half of this year.”
Customers are more comfortable discussing specific timeframes for product purchases than they were last year, said Margaret Craig, CEO of Leitch in Toronto. “It feels better. The activity level and conversions are more near term,” she said.
Business is slowly turning around, said Jay Coley, CEO of Editware in Grass Valley, Calif. A good gauge is the willingness of public broadcast stations to spend, he said. For example, in October, a public TV station canceled a “huge” Editware order. But just two weeks ago, another one placed a major order.
That to Mr. Coley is a sign that people are starting to donate again to public broadcast stations. “Or at least the fear of public TV stations losing all their money has not borne out,” he said.
Capital spending will pick up, but TV stations are more circumspect than before and are demanding a specific return on investment before opening their wallets, said Richard Sisisky, president of ParkerVision in Jacksonville, Fla. “We do see a generalized better feeling, but also a generalized concern over duopolies and stations ownership rulings. If you can increase cash flow and earnings with equipment, [then they are interested],” he said.
Increasing efficiency
Not all broadcasters have cut back over the last year. Leon Long, VP of operations for Liberty Corp., which owns 15 TV stations around the country, said his stations have maintained a constant budget of $500,000 on average for investments in new equipment and replacements, a budget that is separate from the one slated for the digital transition.
“Our investments have continued throughout the downturn,” he said. His 15 chief engineers were on hand at the show to check out any new technology that will allow the stations to extract operating and cost efficiencies, he said.
Even when stations have state-of-the art facilities, as does KABC-TV in Los Angeles, they continue to look for ways to become more efficient and improve through new technology investments, said Operations Manager Mike Norman.