Systems integration secrets from China
Our interview with the head of one of one of China's major SI's & broadcast tech distributors, ATD
ATD Technology is a systems integrator and equipment distributor located in Beijing. Company head Li Ning Chao shares his 25 years of experience in China's broadcast technology sector.
Can you tell us a bit about your background?
I have been dedicated to the broadcasting industry for 25 years - since 1992, when I graduated from university. As a veteran, I have experienced the entire industry journey, from analogue through to digital and HD.
When was ATD founded and what services does it provide?
ATD was founded in 1998. The company has a history of nearly 20 years and employs more than 30 people. ATD focuses on the distribution of broadcasting products. We’re an agency and SI (systems integrator) for our customers. We are also now engaged in the sales of and services for software products. Our business has grown year on year since our humble beginnings.
We began a special partnership with Vitec Videocom in 2003 when Vitec opened its first office in China, selling Sachtler products from Vitec Group, as well as its Litepanels and Teradek products.
Chinese-manufactured devices feature a lot of variety and low prices, but uneven performance
ATD is good at marketing and we have extensive distribution channels. And we are willing to work with vendor partners on marketing and after-sales services. We value these partners very much, and so doing, we can build their brand names, as well as gain a good reputation for ATD in the Chinese market, which is essential for our long-term growth.
In addition to Sachtler/Vitec, we sell products from Ikegami, For-A, Tekronix, Ross-Abekas, Grass Valley, Canare and more, either as an exclusive agency or as a major distributor. ATD is highly recognised by these brands as a long-term, trusted partner.
How would you assess the current Chinese broadcast sector?
China provides a large broadcasting market. In recent years, this market grew fast and drew a lot of attention from the major vendors. Over the past two years, however, fewer investments have been seen in the Chinese broadcasting market due to several factors, such as decreased advertising revenues, completed HD transformation, unavailable market hotspots, immature 4K technology, and wait-and-see users.
As the entire market is now down, the expectations of device vendors need to be modestly lowered.
I believe that the Chinese market for program production and services will gradually improve. This gives us new opportunities. The state-owned TV stations are investing less and buying less, but the leasing and production market is rising.
What is ATD’s biggest challenge right now?
As I’ve mentioned, we can see that the broadcasting market is declining, and the profit from traditional device sales and system integration is really low. But this doesn’t necessarily mean that there is not hope.
I believe that the Chinese market for programme production and services will improve, and this is noticeable already. Our challenge at ATD is how we shift our business towards programme production and services.
What is the proportion of Chinese products vs. imported technology products you offer at ATD?
The broadcasting and TV products made in China offer ever-improving quality, and are expected to sell in the international markets.
Currently at ATD, imported products still account for the major proportion, but more and more Chinese products are seen. But these are mainly the auxiliary, supporting ones.
The state-owned TV stations invest less and buy less, but the leasing and production market is rising
They are mostly monitors, swing arms, peripheral products for audio and video, as well as products that fall into the categories of software production and service. And these Chinese-manufactured will increasingly affect the foreign vendors.
Are Chinese productions using imported gear or Chinese-manufactured gear? And what are the advantages of each?
It is a little bit complex in the production sector. Imported devices are mostly used in the high-end productions, though a large proportion of peripheral products, tripods, monitors, batteries and lights are made in China.
In the low-end productions, however, the majority of supporting devices are made in China, putting aside such core devices as cameras and lenses. The Chinese-manufactured devices feature a lot of variety and low prices, but uneven performance, while the imported devices feature proven performance, but less variety, as well as high prices. Specific analysis has to be conducted on a case-by-case basis.
If they offer the same specs, the users and companies will choose a Chinese-made product, because they can have the same quality at a lower price, and they can have more convenient access to after-sales services as well. Brand loyalty is only seen in the high-end productions, such as high-end photography, movie and TV sectors. But the pre-requisite is having the budget for it.
What are the fastest growing markets in China? Is there the same small production company video explosion seen in other parts of the world?
The privately invested productions and services are growing very fast in the market. There are currently a number of professional streaming video platforms in China, including Youku, Douyu TV, Panda, Huya, Longzhu, Zhanqi and the YY social network, which were all extremely hot in 2016.
Designed for smartphone and tablet clients, they provide such video services as “do it yourself”, video games and esports, and sport rebroadcasting. These video platforms use a few professional devices, but a lot of cheap solutions, and even smartphones, for live broadcasting.
How connected is the Chinese film and TV technology sector to the rest of Asia and other worldwide markets?
Chinese equipment and devices are being sold in the international markets including the Asian countries. Chinese software, monitors, tripods, swing arms, batteries, and UAVs are already found worldwide, but there is still some way to go to gain a solid position.
The quality of these products needs to continue to be improved. And the Chinese vendors need to get a deeper understanding of the international markets, recruit international employees, and improve their way of thinking. It takes some time.
Many Chinese brands actively take part in the international exhibitions and conferences, seeking partners. Some have even directly opened their own overseas branch offices. It is a long process, but some have achieved remarkable results.
(Thanks to Audrey Chang for Mandarin-English translation)