Measuring the market
This special report looks at the top 10 manufacturers of broadcast TV gear-production and transmission-ranked by U.S. revenue. Creating such a list was a daunting task, as many broadcast-equipment companies are divisions of much larger electronics manufacturers that don't specifically disclose the financial performance of their broadcast businesses. Others are privately held companies that don't like to report specific numbers. Nonetheless, this special represents Broadcasting & Cable's best-effort calculation as to each company's chunk of the market, based on a combination of financial reports and interviews with company executives and industry experts.
The list represents a mix of companies that specialize in diverse parts of the broadcast plant, from tape deck and camera suppliers to transmitter manufacturers to infrastructure gear providers. The top 10 also has an international flavor, as two of the companies are divisions of Japanese electronic giants, one is a subsidiary of a Dutch conglomerate, one is based in the UK, and another calls Canada home. But all have a great stake in the U.S. market's digital-television conversion.
1. Sony Electronics Broadcast and Professional Co.
1 Sony Drive
Park Ridge, N J. 07656
ANNUAL U.S. REVENUE: $600 million
TOP EXECUTIVE: Edward Grebow, deputy president, Sony Electronics, president, Sony Broadcast and Professional Company (Sony BPC)
BUSINESS: This division of the $12 billion Sony Electronics company provides advanced audio/video equipment and systems integration to the broadcast, production, business, industrial, government, medical and education markets. Products are focused on broadcast acquisition, production, storage and data management, and include studio cameras, camcorders, tape decks, editing systems, video and audio switchers, video servers and robotic data-tape archives. In addition, Sony BPC provides signal processing and routing gear, MPEG-2 digital-compression gear, monitors/displays and professional audio equipment.
STRATEGY: Sony is focused on developing products to ease the transition into digital television and broadband networking. It has created a new MPEG-2 tape format, IMX, which will begin shipping in January, and recently introduced DTF-2, a data-tape format designed for digital asset-management systems. Its HDCAM format is the leading gear for HDTV production, and Sony has partnered with Panavision to tackle the electronic-cinematography market with 24-frame progressive HDTV products. At NAB, Sony delivered "Cinetour," the first 24p HD broadcast-production truck, to All Mobile Video of New York. The 50-foot truck can be switched between HD and SD for on-site post-production at live events. Sony has already outfitted several production trucks for National Mobile Television with 1080i HDCAM equipment that provides simultaneous HD and SDTV feeds. The trucks have been used by Madison Square Garden and CBS for HD production. Systems integration is a growing business for Sony BPC, which will derive $120 million in revenues from its San Jose, Calif.-based systems division this year. Its biggest current project is supporting NBC's Olympic production in Sydney, Australia. Sony BPC is also working on a contract, worth an estimated $1 billion, to provide three million digital cable set-tops to Cablevision. The deal includes headend integration and software development, which is being handled at Sony's software lab in San Jose. Software in general is becoming increasingly important for Sony, which is deriving significant revenues by developing custom solutions for digital asset management, digital newsroom operations and other applications. "In the digital era, it's no longer a matter of selling a box here and there-you are redefining workflow," says Sony's Alec Shapiro. "We want to consult with stations on their workflow and figure out how we can improve and enhance those processes."
2. Panasonic Broadcast & Television Systems Co.
3330 Cahuanga Blvd. West
Los Angeles, Calif. 90068
ANNUAL U.S. REVENUE: $300 million
TOP EXECUTIVE: Warren Allgyer, president
BUSINESS: Panasonic Broadcast & Television Systems is one of more than 50 North American operations under the umbrella of Matsushita Electric Corporation, the principal North American subsidiary of Matsushita Electric Industrial Co. Ltd. of Osaka, Japan. The company provides broadcast and professional video and audio products and systems. Products include camcorders (DVCPRO, D-3, DV, S-VHS, VHS formats); studio, ENG and EFP cameras; VCRs (DVCPRO, D-5, D-3, MII, S-VHS, VHS formats); high-definition VTR processors; duplication recorders; DVCPRO laptop editor; automated record/playback library systems; video-production switchers; videotape (DVCPRO, D-5, D-3, MII, S-VHS, DAT); desktop video-production systems; postbox nonlinear editing systems; editing controllers; broadcast monitors; power amplifiers; audio mixers and processors.
STRATEGY: Panasonic claims that DVCPRO has been the most rapidly adopted broadcast-video format in history. The digital-acquisition format is moving toward high-definition, as evidenced by recent product introductions such as the AJ-HDC27A 30 fps/ 60 fps dual-frame rate-progressive scan (720p) DVCPRO HD camcorder.
3. Harris Corp., Broadcast Communications Division
4393 Digital Way
Mason, Ohio 45040
ANNUAL U.S. REVENUE: $265 million*
TOP EXECUTIVE: Bruce M. Allan, president and general manager
BUSINESS: Harris is the largest U.S. manufacturer of analog and digital television transmitters, systems and services. Products include analog and digital television transmitters and DTV exciters, DTV encoders, radio transmitters, studio systems, mobile broadcast systems, radio-studio products, automation systems and systems integration for studio and mobile systems.
STRATEGY: In February, Harris decided to get out of the antenna business, selling its antenna division to SPX Corp.'s Dielectric Communications, the largest U.S. manufacturer of TV and FM broadcast antennas. A month earlier, the company acquired Louth Automation, a media-management and automation company, and renamed it Harris Automation Solutions. Harris sees data broadcasting as one of the primary new revenue-generating opportunities for terrestrial broadcasters in the next few years. Because of that, the company signed a distribution agreement in April 1999 with SkyStream Corp., which supplies data and conditional-access broadcast-networking equipment. Recent R & D has yielded improved efficiency and coverage range of its Diamond UHF solid-state digital transmitter.
*Estimate includes revenue of recently acquired Louth Automation. Harris Corp. is publicly traded (HBC).
4. Avid Technology Inc.
One Park West
Tewksbury, Mass. 01876
ANNUAL U.S. REVENUE: $220 million
TOP EXECUTIVE: David Krall, president and CEO
BUSINESS: Avid provides digital audio and video tools for film, television, interactive content, TV news and corporate communications. Products include the Symphony nonlinear finishing system, Media Composer nonlinear editing system, Xpress editing system, NewsCutter news-editing systems and the PDR 400, an enhanced Profile video server with DVCPRO compression that can be integrated with NewsCutter. Avid also markets newsroom automation products through Avstar, a 50/50 joint venture with the Grass Valley Group.
STRATEGY: Avid's pitch is "create once, publish everywhere," says Chas Smith, vice president of worldwide sales and marketing. Avid is ready to roll out the latest release of the Symphony, Media Composer and Xpress, which will have the capacity to publish to the Web in multiple formats. The push-button theme is evident in Avid's Unity for News, a networked news-production tool in its recently launched line of Avid Unity shared-storage products. Unity for News, designed to tie together the whole news production process, includes the NewsCutter 2.0 system and Unity elements such as MediaNet, MediaManager and Transfer Manager. Meanwhile, Avid is extending its reach into digital media networks via its new Internet infrastructure division, Edgestreme Systems.
5. Grass Valley Group
400 Providence Mine Road
PO Box 599000
Nevada City, Calif. 95959-7900
ANNUAL U.S. REVENUE: $204 million
TOP EXECUTIVE: Tim Thorsteinson, president and COO
BUSINESS: Grass Valley Group is a vendor of digital hardware, software and new-media products focused on content delivery through interactive television, digital cinema, data-enhanced broadcasting and the Internet. Product lines encompass video-storage and production tools, including routers, switchers, modular products, digital asset-management and monitoring software, and Profile digital video servers. More recent introductions include the Kalypso Video Production Center product line.
STRATEGY: New products are GVG's lifeblood. It spent $70 million on R & D in the past two years; Thorsteinson expects that, for the current quarter, 70% of sales will come from products introduced in the last year, driven by sales of the Profile XP media platform and Kalypso production switcher.
Microsoft has taken an interest in Profile XP, for example, working with GVG on interactive-TV initiatives. New-product introductions are done to enable broadcasters' transition to distribution of digital content over the air, Internet, interactive television and data-enhanced broadcasting at price points the company hopes will convince broadcasters to invest in digital. "We want to drive the conversion as opposed to waiting for it to occur," says Thorsteinson.
6. Philips Broadcast
2255 N. Ontario St., Suite 150
Burbank, Calif. 91504
ANNUAL U.S. REVENUE: $125 million
TOP EXECUTIVE: Jeff Rosica, vice president, general manager, North American sales
BUSINESS: Philips Broadcast encompasses all the Philips-branded tools to acquire, produce, store, retrieve and deliver digital content, such as television cameras, video servers (MediaPool), production switchers, routing equipment and signal processing. The business unit is part of Philips Consumer Electronics, a division of Royal Philips Electronics of the Netherlands.
STRATEGY: As the marketplace for digital appliances opens up, it's expected that mobile phones, wireless devices and PDAs that can receive streaming video will open up the amount of content available and how that content is produced, says Mike D'Amore, vice president of business and technology development. Toward that end, Philips is active in standards groups looking to define common sets of metadata-or data about the data that's being broadcast-that can be applied from the moment the data is gathered.
The Philips Broadcast group that builds the MediaPool server is working on asset management and content editing, with the ultimate goal of creating specialized software applications that can be run on universal or off-the-shelf hardware. Philips won accolades at NAB 2000 for its SD/HD switchable, 9.2-million-pixel LDK-6000 high-def camera.
7. Pinnacle Systems Inc.
280 North Bernardo Ave.
Mountain View, Calif. 94043
ANNUAL U.S. REVENUE: $100 million
TOP EXECUTIVE: Mark Sanders, president and CEO
BUSINESS: Pinnacle designs, manufactures, markets, and supports computer-based video post-production products to serve the broadcast, desktop and consumer markets. Character generators (Deko desktop character generator, FXDeko on-air character generator, HD Deko500, PostDeko, Rocket for FXDeko, StillDeko graphic database search engine); digital video effects (Alladin Pro single- or dual-channel digital video-effects system, DVEXtremePlus); image and storage (Lightning image-management systems, MediaStream video servers, Thunder video servers); switchers (PDS 9000 2.5ME, 10-bit component digital live-production switcher); and test and measurement (Quality Advisor). Last August, the company completed its purchase of Hewlett-Packard's video communications division for $12.6 million in cash and $20.6 million in stock.
STRATEGY: While the bulk of Pinnacle Systems' revenues has been derived from sales of products such as DVExtreme and Media-Stream, the company is branching out. The newly acquired Digital Editing Services and Montage Group Ltd. are expected to form the basis of the firm's Totally Networked News broadcasting and Webcasting solutions. The focus on digital content is apparent in product introductions, such as Rocket for FXDeko.
Newbury, Berkshire, England,
44 (0) 1635 48222
44 (0) 1635 523335
ANNUAL U.S. REVENUE: $100 million
TOP EXECUTIVE: Richard Taylor, executive chairman
BUSINESS: Quantel is a designer and manufacturer of digital-image processing and manipulation products for video and film. Products include the Henry and Infinity effects editors, Editbox FX online editor, Hal video design suite, Clipbox embedded editing server, Cachebox server, Inspiration news production system, Paintbox, Domino film compositor, Picturebox still store, Moving Picturebox integrated clips-and-stills-transmission suite, and Chaser an Editbox interface that allows nonlinear HD finishing.
STRATEGY: In July, Quantel's management team completed a buyout deal worth 51 million British pounds ($77 million U.S.), plus up to 57 million pounds ($85.6 million U.S.) as further consideration to former owner Carlton Communications Plc. Executive Chairman Taylor assures customers that support will not suffer in the transition.
While the U.S. marketplace for Quantel's products has been hit by price competition and deferral of expenditures due to all the uncertainty regarding DTV standards, the company's plan going forward is to invest in R & D for existing products and new tools for content creators to exploit digital media in traditional and new channels.
9. Dielectric Communications
22 Tower Road
P.O. Box 949
Raymond, Maine 04071
ANNUAL U.S. REVENUE: $60 million*
TOP EXECUTIVE: Lew Kling, president
BUSINESS: Dielectric, founded in 1942, designs, engineers and supplies broadcast antennas for DTV, NTSC (UHF and VHF) and FM. Other products include combiners, switches, diplexers, transmission lines, waveguides and dehydrators. The company claims the largest installed base of DTV and NTSC antennas worldwide. Its Maine facility houses engineering, CAD design, antenna-test facilities, manufacturing support and administration. In October 1998, Dielectric became a division of SPX Corp. following the merger of SPX and General Signal Corp.
STRATEGY: Dielectric jumped on the DTV bandwagon early and has grown accordingly. In 1998, the company constructed an 18,000-sq. ft. addition to its Raymond, Maine, facility to support growth in the DTV arena and provide more space for manufacturing and antenna testing. Another 6,000 sq. ft. were added in 1999 to house engineering offices and antenna-testing facilities. With its February 2000 acquisition of Harris Corp.'s TV antenna division, Dielectric gained a 12,000-sq. ft. facility in Palmyra, Mo.
*Parent SPX Corp. is publicly traded (NYSE:SPW).
10. Leitch Technology
25 Dyas Road
North York, ON M3B 1V7 Canada
ANNUAL U.S. REVENUE: $56 million*
TOP EXECUTIVE: John A. MacDonald, president/CEO
BUSINESS: Provides products to store, switch, distribute, convert and otherwise process audio and video, including digital conversion systems; video processing and distribution (Digital Glue, Genesis); control and monitoring; analog distribution amplifiers; routing; switchers; clock systems; test equipment; video servers (VR300, VR440).
STRATEGY: New President and CEO John MacDonald spent his first three months at Leitch developing a strategic plan for the digital age. Presented in February 2000, that plan suggests leveraging strength in broadcast-video processing, distribution and server products to reach into new markets-without alienating the company's core customers.
"The truth is, broadcasters today see themselves as a cable company, a telco, a Web-streaming company and a source of content," says Margaret Craig, president of the U.S.-based Leitch Inc. division.
Strategic acquisitions are also part of the plan; Leitch has acquired 30% of Path 1 Network Technologies Inc., including a technology-licensing agreement to include TrueCircuit video-over-IP technology in its broadcast equipment. But Leitch is not phasing out its best-selling cross-point routers. Craig says the Path 1 acquisition provides an "evolutionary path" toward integration of traditional routers plus IP networking.
*For fiscal year ending April 30, 2000. Company is publicly traded (Nasdaq: LVID).