Broadcast equipment manufacturers are feeling the pinch.
The International Association of Broadcasting Manufacturers tracks sales and profitability for the broadcast manufacturing and media technology sector.
“Suppliers of broadcast and media technology products and services are now feeling the full impact of the global economic downturn, according to the latest Industry Index … Global sales increased by 7.9% year on year, a sharp decline from the 11.7% reported three months ago.
“This drop is largely due to poor first quarter performance this year,” it continued, “with sales turnover typically down by 25% on the same quarter in 2008. Seventy-one percent of the companies reporting remain in profit but overall profitability is declining, with the IABM profit growth index turning negative for the first time since tracking began three years ago.”
Director Roger Crumpton called the numbers “naturally disappointing” but said they were “not unexpected.” IABM said that in addition to the overall economic climate, the global broadcast industry expected a sharp drop in sales compared to last year when media events like the Olympics and the U.S. presidential elections drove broadcasters to re-equip.
“Those budgets have been spent, so 2009 will inevitably be a lean year.” But, he said, “The profit-to-sales ratio remains good at around 11.5% globally, with larger companies maintaining strong performance. Those companies with products in emerging technologies like video over IP and digital cinema are the best performers at present.”
The organization reaches its conclusions by studying reported financial data from 69 companies that make broadcast gear in various countries including the United States, Belgium, France, Germany, U.K., Netherlands, Switzerland, Italy, Norway, Denmark, Sweden, Finland, Israel, Greece, Canada and Japan.
An IABM report last month suggested a cautious near-term outlook but a degree of optimism about the longer term: “Operations have generally now been streamlined to minimize the impact of reduced revenues, leading, it is hoped to a strong future as business picks up in the coming quarters.”