HD World: Bullish Despite the Bears

By Ken Kerschbaumer
The economy’s on-going wild ride was a topic of discussion at HD World and Satcon in New York this week, but, with most manufacturers finishing up a very robust 2008, there is optimism that customers will continue to make investments in HD and new production and distribution technologies. For now, the attitude is more wait and see than touch and go.
“We haven’t seen an impact one way or the other,” says Pixel Power CEO Pete Challinger. “I think it is going to be a couple of months before we know what the long-term effect is.”
2009 was already going to be challenging for the market overall, with neither election nor Olympics to fuel HD-equipment sales. The current economic crisis and its negative impact on major media companies’ stock prices will most likely undercut capital budgets, and there are already some rumblings of HD studio conversions being delayed.
Barry Singer, Ross Video regional sales manager, believes that, if there is a downturn, it won’t be visible until customers finalize budgets for 2009 and 2010. “I think there will be a change in the marketplace as far as whether customers will be able to purchase products and what type of products they’ll buy.”
The sports market, however, could play a key role in adding buoyancy to the market. “There was so much money spent related to the Olympics that it is rippling through the industry, and there is a catch-up period,” says Challinger.
Sports could provide a lift because HD is increasingly the norm for coverage. “I don’t think you’re going to see any of the main broadcasters cutting back on HD sports broadcasts,” says Lisa Hobbs, Tandberg Television VP, business development, satellite and broadcast. “A lot of them are going to add more HD games every week, and it will be particularly interesting to see what happens when the college basketball season starts.”
New sports projects are fueling demand for gear. “There are still a lot of HD trucks cooking out there,” says Larry Thorpe, Canon Broadcast and Communications Division national marketing executive. “Major League Baseball is starting a new network in January, so sports is great.”
Manufacturers find themselves in a tricky spot, having to plan for a downturn in demand while ensuring that they have enough capacity to ramp up in case demand exceeds expectations. HD sales have been strong around the globe, and there is little doubt that global interest will remain high.
“The digital train is roaring,” says Thorpe. “It may encounter a stop, but it will be able to recover.”
The consistent theme among HD World exhibitors was that, in an economic downturn, consumers may curtail spending on vacations, movies, or even tickets to sporting events but all of that means more fannies on the couch, watching TV. “During a recession, people will watch more television,” says William Smith, Anystream Northeast regional sales manager. “And advertisers will advertise.”
Advertisers may advertise, but there is little doubt that there will be a ripple effect as TV productions scale back in an effort to cut costs and improve the bottom line.
“I still think sports will continue to be done in HD, but the shows probably won’t be as elaborate as they were this year or last,” explains Kurt Heitmann, Red House SVP, sales and marketing. “We expect next year to be flat compared with this year. But this year was up 25%, so we expect to be okay.”
Economic challenges also could drive sales of less-costly equipment. “We’re seeing a lot more excitement toward the entry-level pieces,” says Michael Cutler, senior technical representative, Canon Consumer Imaging Group. “Major news organizations all want to have cameras like the Canon Vixia HF11 for their employees, not just engineers and shooters.”
Thom Calabro, national sales manager, Fujinon Broadcast and Communications Division, says there is some nervousness in the market but money is still there and, of course, people still need tools to work. “The networks are demanding that freelance shooters have a certain level of camera and lens, so, if they want to keep working, they have to buy it.”
Adds Edgar Shane, JVC general manager, engineering, “While $35,000 HD cameras may not be an option, there is still a need to produce content to stay competitive. All of our cameras are at lower price points as organizations look to produce more content with less. We design our equipment to meet that need.”
Whether HD World 2009, or even NAB 2009, will continue to find exhibitors optimistic about near-term business remains to be seen. For now, the bulls continue to beat back the bears.
Additional reporting by Carolyn Braff and Andrew Lippe