The content creation market is a dynamic market that has transformed over the past decade and is continuing to change. Technology innovation, social media and remote working have driven the “democratisation” of content creation and consumption, and a sustained demand for new and replacement products.
COVID-19 impacted the Group’s end markets significantly at the start of the pandemic. However, our markets are recovering well, our end market drivers remain intact and we have seen many areas of growth. More people have become accustomed to communicating via video and watching more video content on subscription platforms, and we believe that the demand for, and investment in, original content (e.g. films, scripted TV shows, live news, sport, videos and photos) will continue to grow. This benefits Vitec as our market-leading technology enables people to capture and share content.
In addition, we are investing to benefit over time from the substantial opportunities that exist as a result of the structural changes to our market. In the medium-term, we believe that our Total Addressable Market has expanded, mainly due to our ability to serve the streaming market.
Video communication has grown exponentially driving demand for our streaming solutions. More content has been consumed on subscription channels like Netflix and Amazon Prime and when production sets reopen we expect original content creation to grow dramatically driving demand for our video transmission and monitoring systems. Further automation of TV studios to ensure safe distancing will benefit our robotic camera systems and voice-activated prompting solutions, and vlogging, social media usage and homeworking have increased with more people using smartphones and compact system cameras to create content using our JOBY products.
Multiple new image capture devices plus
Imaging technology has continued to improve. Many different devices now enable customers to create content.
In the cine and broadcast markets, most cameras now film in at least 4K and have high quality recording capabilities. In the professional photography market, many cameras can shoot video as well as stills. The transition from traditional DSLR to compact system cameras (“CSC”) has become clearer, and most of the traditional manufacturers have launched new CSC flagship models which have become the technology of choice for professional content creators.
Continued technology enhancements mean that mirrorless cameras, drones, action cameras and smartphones have been adopted by customers to complement or replace traditional DSLRs. However, small viewfinders make it difficult to monitor the shot and poor audio deteriorates the video experience.
This has opened up further opportunities for Vitec to develop innovative products. Creative Solutions has led the market with daylight viewable monitors from SmallHD. Imaging Solutions has developed a comprehensive range of products designed for use with CSCs such as Manfrotto gimbals, a new generation of Syrp robotic heads, JOBY compact tripods, lights and microphones for smartphones and CSCs, alongside well established Manfrotto Befree and Gitzo Traveler tripods.
Proliferation of new media platformsplus
Growth in new media and third party streaming applications has resulted in a significant increase in video consumption, and thus video creation.
Creatives must deliver content to more platforms and devices than ever before to build brand awareness and retain their audience. Free streaming platforms allow content creators to stream live to mobile devices and computers.
In addition, online subscription platforms such as Netflix and Amazon Prime continue to increase spending on original content. To encourage subscriptions, these platforms have invested in high value productions akin to traditional films.
This has driven the growth of smaller independent producers who typically require more affordable products.
Our products are designed to meet the needs of these ICCs and companies, and include a wide range of mobile equipment such as Manfrotto and JOBY tripods and monopods, and Litepanels and JOBY portable lights. Teradek’s wireless video transmission systems are used to monitor video on set as well as remotely.
Estimated $bn spend on original content creation 2019-2024
Source: 2020 S&P Global market Intelligence
Growth in streaming and remote video transmissionplus
Growth in transmitting data, video and images through ethernet, WiFi, cellular networks or proprietary video networks.
COVID-19 saw an exponential growth in the streaming of video across all industries to maintain communications, using streaming products to facilitate remote working.
For example, professional content creators working from home for the first time required remote streaming with high image quality, low delay and robust security for post-production. And governments, enterprises, schools and businesses also needed to communicate with their communities, customers and employees.
Teradek saw a substantial increase in the sale of streaming software and solutions and has introduced new and improved products at both the high end professional and low end ICC price points. We believe that many forms of remote working will stay post-pandemic and are investing further in our streaming solutions to meet this need, especially targeting the professional remote workflows that can not use consumer grade applications like Zoom. We are also transferring the Amimon zero delay technology to other vertical markets – for example, medical, education, governments, houses of worship and e-sports, which increasingly rely on high quality, secure, zero or low delay video transmission.
Changes in distribution channelsplus
Continued growth in digital distribution channels and online retailers.
The pandemic accelerated the transition to the e-commerce channel and Vitec continued to grow direct sales through our own websites as well as through pure e-tailers such as Amazon and JD.com, and established outlets such as B&H Photo and Video who also have a strong online presence.
As a result, there has been further consolidation among photo speciality stores and consumer electronics outlets; in parallel, new routes to market have opened up, for example, telecoms resellers for JOBY, and B2B for education and training, corporate and medical applications.
Imaging Solutions and Creative Solutions have adapted to the change in distribution channels by transforming their digital and e-commerce capabilities. In 2020, approximately half of Imaging Solutions revenue came from online platforms, and Creative Solutions direct e-commerce and Amazon sales grew significantly in the year.
Further technology innovationplus
4K/HDR resolution adoption has increased rapidly, with Netflix, Amazon, Sky and Apple all offering
4K Ultra HD streaming services, and advances in 5G, Artificial Intelligence (“AI”) and Virtual Reality (“VR”) are revolutionising amateur photography.
As adoption grows around the globe, studios and video cameras are being upgraded with new technology resulting in increased demand for our high end products and software to accommodate the new formats.
The adoption of 4K/HDR video technology in DSLRs, CSCs and prosumer video cameras is attracting a growing number of creatives who can now produce high quality visual content in either still or motion picture formats with highly dependable, portable and affordable equipment. This positive trend is expected to further consolidate with the evolution of 4K into 8K technology.
In 2020, Vitec launched the world’s first 4K/HDR zero delay wireless video eco-system for the cine market including SmallHD monitors. We also launched Manfrotto fast deployment video tripods and multiple new smartphone and CSC accessories under the JOBY brand to enhance photo/video capabilities.
Exciting and unusual contentplus
Content creators are increasingly keen on novel viewing angles to capture innovative and differentiated content.
Traditional broadcasters and sports rights holders, such as the Olympic Broadcasting Services, welcome the opportunity to feature original shots. This can enable them to differentiate their content from other broadcasters and to increase viewing figures. Dynamic, untethered camera movement is required to achieve this. This has become even more important during the pandemic with reduced or no live audiences.
News crews need to be able to deploy their equipment quickly and efficiently and ICCs are keen to deploy new tools such as sliders, gimbals and drones to make their content more interesting by using, for example, time lapses and hyper lapses.
Vitec has pioneered the use of specialist cameras in sports events like the Olympic Games and we are capitalising on Rycote’s audio expertise to develop innovative audio products.
Vitec’s carbon fibre flowtech tripod is popular for electronic news gathering and with ICCs as it allows much faster and easier camera deployment. In 2020, we also launched the Sachtler aktiv fluid head which, together with flowtech, enables camera operators to capture the widest range of shots in the shortest time. In 2020 we were the first company to launch an integrated system of gimbal supports.