Back to basics

First it was the US sub-prime mortgage collapse, then it was a credit crunch before being elevated to a financial crisis and it was briefly even called a global recession. Now it is simply a downturn.

Regardless of the vocabulary pushed in the mainstream media, the reality is that the ‘downturn' will present itself in different ways to different businesses. Networking website LinkedIn has reported increased traffic as professionals look for new opportunities. No downturn there.

Supermarkets will continue to sell the essentials in more or less the same volumes as previously being as they are, essential. The challenges facing luxury goods retailers, by contrast, are obviously more serious. So how can this analogy be usefully applied to the broadcast industry?

Well the good news is that demand for television content is not going to decline at any point during this troubling economic period. In fact, if anything, television viewing is more likely to increase as people opt to stay at home to save a little money. For example, a report release by Deloitte showed that TV viewing increased in Q3 and Q4 of 2008 in the UK and is expected to rise another 30 minutes per viewer per day in 2009.

For broadcasters, increased ratings may even help tease a little more advertising revenue from the agencies and key clients as TV becomes a more compelling proposition when compared to rival consumer marketing platforms.

For technology vendors, there is more than likely to be enough trade among 500 channels (many of whom will be untouched by the current situation given that they were operating on a non-commercial basis to begin with) to maintain a decent level of business.

The everyday needs of the industry will continue. Security infrastructure will have to be replenished when needed, the media clusters around the Middle East will still need to be kitted out, increasing regional content production will boost the traffic for enterprise network and teleport operators and let's be honest, there will more than likely that FTA channel launches will continue unabated requiring all of the associated infrastructure.

These are the essentials of the Middle East industry. The products and services that form the backbone of broadcasting day in day out will continue to be in demand for as long as viewers in the region are tuning in.

Sales of the luxury items will decrease in the global broadcast market and to a lesser extent regionally. The Middle East consumer's drive for early adoption - matched by many of the well funded state broadcasters - will take the edge off this decline in the local market.

John Parnell is the deputy editor of Digital Broadcast.

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