We live in extraordinary times. Apart from a very small group of macro economists, nobody will have foreseen COVID-19. At Telestream, we have a robust series of strategies in place for most eventualities, but also, we are having to approach the current situation with flexibility and coordinated actions. Questions arise of what the broadcast industry will look like when we return to normality.
Most business managers have been through economic crises before—each time the agony is different. In previous economic downturns, everyone was still working on premise and the business flow, though challenging, was the same. With COVID-19, so many people now work from home and that is very foreign for all of us. Basic things like getting purchase orders approved remotely can be tough, so everything gets slowed down and there is a “discovery” process for all concerned regarding how to conduct business. Also, in past downturns, things like basic human health was not part of the equation.
With countries accounting for over 50% of the world GDP in lockdown, this is a truly global crisis. We see the global impact everywhere, which is natural as COVID-19 doesn’t seem to discriminate. I also believe the best path to getting back to normal is one of full cooperation throughout the world versus region by region. Travel will never return to normal if pockets of the world still struggle against the pandemic. Telestream has been fortunate in that what we do is critical during a crisis like this, so our business has remained strong, yet challenging, as nothing is easy.
Telestream is like a lot of companies in that it does not have limitless resources—in this situation it is critical that our team of employees buy into how the company is reacting to the crisis. Our employees have been amazing. As the leadership team, we have communicated quickly and very transparently with them and we are all in this together. They fully understand this is new territory for all of us, so there is no magic “pandemic playbook” any of us are using. They truly trust us to make the best decisions possible given the circumstances and that is all I can ask for as a CEO.
And they continue to do business. We use Microsoft Teams a ton and after weeks of working from home, I can honestly say we have done a great job coping with the situation. We have not missed a beat from a business perspective. I am not sure how long we can keep it up, but it appears for a few months, we can maintain our stride.
COVID-19: THE BUSINESS PERSPECTIVE
COVID-19 is impacting different economic sectors in different ways. For Telestream, it has been interesting. For all the wrong reasons, COVID-19 has helped sales of some of our products, most notably our video streaming products like Wirecast. Schools, churches and any organization where communication is critical have zeroed in on Wirecast as being the best tool out there.
Regarding how we provide technical and operational support to these customers, we are set up to offer technical support remotely already, so that aspect has been more seamless for us.
But will all vendors in our core markets survive covid-19? No, not all companies will survive. In general, those without funding sources who can inject additional capital will fail due simply to a lack of cash. Also, those companies whose customers are in segments most impacted will struggle and it’s natural that many will not make it. We are aware of many, many companies experiencing 50% declines in revenue and they just can’t handle that impact for very long if they don’t have financial resources available to them.
We are just starting to see less restrictions on social distancing—both in the US and in parts of Europe. I am a huge fan of social distancing and have seen its impact on “flattening the curve”. I believe it is premature at this point to reduce the restrictions and we need another 30 days of renewed commitment around the world to continue these measures or else we will be back in the fall timeframe discussing how COVID-19 has made a comeback.
But just how quickly can economies and businesses bounce back? I believe Q2 is going to be just plain tough. Q3 will be improved and maybe to the point where you would call it “mediocre” from normal times. Q4 will be stronger yet, but still not normal. I believe “normal” is only possible once a vaccine is available. I believe over the next 12 months, we all will be dealing with COVID-19, hopefully to less and less of an extent, but it will be with us for some time and it will have some sort of a resurgence once current practices are relaxed. I’m not being negative here; only realistic.
COVID-19’S LONG TERM IMPACT
I believe that two impacts will be felt long term. This pandemic has shown media folks they need to have disaster recovery and remote operations capabilities. They have all learned by now, they did NOT have this in place. So, I see a continued emphasis on getting these operations more secure in case this ever happens again.
Also, I see industry trade shows being impacted for most, if not all, of 2020: trade shows will not be taking place and all vendors are forced to figure out “virtual” approaches to launching products and staying in touch with customers. As a result, vendors will not automatically revert to pre-pandemic forms of communication.
Worldwide, massive numbers of staff are learning how to work from home. There must be a question of whether we will revert to traditional office-based working practices post-shutdown or will remote working become a more common thing? Based on Telestream’s experience, I completely believe remote working will be a more common practice. I think this will be one of the lasting impacts of COVID-19 frankly. The lack of traffic congestion, reduced pollution, people saving money from reduced fuel costs and the overall level of productivity possible with some form of remote working will create the motivation for continuing this practice on some level.
In this respect, every cloud has a silver lining—anything we can collectively do as a world to reduce pollution is a great thing.
And another silver lining for companies like Telestream is the help the crisis will offer in the establishment of OTT services. I believe this absolutely, without a doubt. Necessity is often said to be the mother of invention and people have had to try things they had never considered before, and OTT is one of those things.
LIFE WITHOUT NAB
Throughout Telestream’s 22-year existence, NAB has been a constant. Every April has seen our annual migration to Las Vegas to meet and greet our fantastic customers and industry colleagues. But this year, we are learning to survive without our Vegas trip. We are doing everything virtually, but it’s way too soon to know how effective we have been. We held our press conference virtually this past week and have numerous reseller meetings this coming week followed by a host of customer meetings. We have the collateral ready, but the jury is still out, as they say, on how effective it will be to truly generate solid customer leads on the scale NAB did.
So, can we see a world without NAB and IBC or is that just not conceivable? Without sounding alarming, I will say “yes,” I can see a world without them or a world where they are much smaller than what they have been in the past.
In general, I think we will be stronger than ever as an industry even knowing some will face big struggles. The need for the visual content and live content has not gone away so it will return once it is safe for all involved to do so. Nothing from COVID-19 has changed the underpinnings of our industry and frankly, I think it has managed to remind everyone how important this industry is; especially during a crisis like this.
For now, keep safe and well: we look forward to meeting you again, as soon as is safe and practical.
Dan Castles is the CEO of Telestream
