NAB 2013: The paradox of the larger but cheaper market

Each year at NAB I make sure that I walk the entire show floor to make sure that I see if there an hidden gem somewhere, especially in the new and small organizations. I have been doing that basically since 1987 when the NAB was held in Dallas. I certainly have the impression that there is less and less of those hidden gems. The less there is interesting things to see, the faster it is to walk around. The first years, I was barely able to do it in 4 full days. Now, with each year, I know more things and there is less things new that I haven’t seen. This is especially true since I also go to IBC. Still, this year, it took me less than two days to walk the entire trade show, the fastest ever.

One of the issue I think is that the small companies are not all very innovative. A lot are selling more of the same. Lots of storage and SAN based solution. Lots of IP streaming and codec solution providers, lots of manufacturers of small gears for camera etc. In fact, I did not really find true surprises this year.

What I saw among the bigger booths are lots of 4K. The same way that there was a lot of 3D 3-4 years ago (almost nothing now) everyone in the higher end seems to jump into the 4K bandwagon. This makes sense at they try to find niches that are driving bigger orders and hopefully larger margin. But you can see that the places where there more crowd and more excitements are those companies who make cheaper equipment, in the price range that an independent contractor could afford. This is the same notably with Blackmagic, GoPro, Adobe and Red to name a few.

An hence the paradox: There is more demand and more video production than ever before but organization have ever diminishing budget to produce it.

This drive profound changes at the manufacturers level. On one hand, the television organizations have less expertise in house and demand complete solutions from vendors but those customers that have money to pay for high end solution are becoming fewer. Manufacturers try to hang on the higher hand of the market to get the return on investment necessary for their operation but that high end market is shrinking.

On the other end of the market are all those independent who struggle to find cheap alternative to cater to organizations that have small budget. They are learning on the fly, they find ways to make do with what they can and help each others in forum on the Internet. The quality of what they is variable in function of their skills.

On the quality front, something made me smile at the Avid press conference on Sunday. They shared a market study that was saying that 65% of consumer believe that quality was important… I wondered how these people define quality.