Over the last few years broadcast technology has undergone major technological changes and seen unprecedented innovation.  Digital technology has completely revolutionized broadcast industry.  We are at a point where there are a variety of platforms for delivering content including DTH, DTT, cable, and IPTV.  The emergence of technologies surrounding these delivery models have had an impact along all the broadcast value chain which encompasses consumer electronics, TV production, broadcasting, pay TV, cable and satellite.  The broadcast technology and services industry has historically been comprised of a few very large vendors and a vast number of small specialized providers of niche products and solutions.  However, technological changes have created an opportunity for the rapid growth of strong mid-sized companies that provide suites of superior solutions and services that meet the exacting demands of broadcasters.   This combination of high growth potential and fragmented market provides outstanding investment environment and abundant M&A opportunities.  Pharus Advisors is unique in its focus on these emerging trends in broadcasting technology and has worked with several companies in the industry to maximize value for their shareholders.

• Fragmented Market:  The broadcaster technology and services provider market continues to be fragmented with significant consolidation trends continuing as strategic buyers seek to broaden product offerings and build scale.

• Reduced Broadcast Budgets:  Budgets for broadcasters continue to be low but broadcasters continue to show positive expenditure trends for technology that creates clear cost savings.  Broadcasters are seeking solutions/services that reduce production costs, shorten production and play-out cycles or enhance production quality and/or viewer experience.

• HDTV and Digital Technology:  Many broadcasters have already started providing HD broadcasts and others are getting ready make the transition to all HDTV broadcasting.  The use of digital technology continues to rise as storage costs have plummeted.  It is estimated by the end of 2010 the number of HDTV ready households will reach 174 million or 22% of TV households on a global basis.  All the growth figures regarding HDTV adoption attest that broadcasters will seek to expand the breadth of HD programming and as a result will have huge implications for the broadcast technology and services sector.

• Growing Importance of Sports:  Sports broadcasting continues to be increasing because of attractive viewer demographics and because major sporting events are some of the last true "mass market" opportunities for advertisers.

• Differentiated Content: Broadcasters are using technology to provide unique camera shots, specialized graphics and post-production effects to increase viewer satisfaction.

• Emergence of IPTV:  The continued penetration of broadband service and advances in content delivery technology has created a massive opportunity in IPTV.  IPTV provides a mean to substitute existing payTV networks and also enables consumers to access unlimited choice of content.

• Growth of Interactivity:  One of the ways broadcasters are using technology to boost revenues is by introducing interactive content.  The rapid growth of interactive programming is creating dramatic shifts impacting content creators, broadcasters, equipment providers and consumers.  One of the major factors predicted to drive the growth in TV interactivity is the near ubiquity of cell phones and other mobile devices.  Broadcasters are realizing the strengths of SMS-TV as an effective ways to boast ratings and revenues.  In 2004, 13.5 million viewers cast votes by text message on American Idol and in 2005 this statistics grew to 41.5 million.