“We think there are great mar­ket op­por­tu­ni­ties in the Mid­dle East, and the in­dus­try will con­tinue to de­velop”

STEVE NYLUND, CEO RED BEE ME­DIA

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In a wide rang­ing dis­cus­sion, Red Bee Me­dia CEO Steve Nylund talks about the lat­est me­dia tech­nol­ogy trends he no­ticed at the last month’s IBC show, the need for man­aged ser­vices and shared in­fra­struc­ture, and his views on the state of the broad­cast and me­dia in­dus­try.

Steve Nylund be­gins our con­ver­sa­tion by say­ing that there are not many ser­vice com­pa­nies like Red Bee Me­dia in the me­dia tech­nol­ogy in­dus­try. “Un­like most com­pa­nies at IBC, we are a ser­vice provider, al­though we in­vest a lot in tech­nol­ogy and all our ser­vices are en­abled by tech­nol­ogy.”

“That’s im­por­tant be­cause there are not that many ser­vice com­pa­nies like us. We man­age mis­sion crit­i­cal ser­vices and op­er­a­tions on be­half of broad­cast­ers, con­tent providers, and me­dia com­pa­nies.”

“Our job is to op­ti­mize the glass to glass flow – from cam­era glass to de­vice screen. This he says, “In­flu­ences how we po­si­tion our­selves and what we in­vest in.”

DS: What are the rea­sons to go for a man­aged ser­vice ver­sus in­vest­ing in the tech­nol­ogy? Nylund:

There are sev­eral rea­sons why it makes sense to buy man­aged ser­vices. The first one is ac­tu­ally ac­count­abil­ity be­cause when you buy from us you get ser­vice level KPIs. We guar­an­tee a very high level of avail­abil­ity, per­for­mance and qual­ity of ser­vice which is a con­trac­tual obli­ga­tion. We com­mit to the qual­ity and avail­abil­ity of our ser­vices be­cause we are very good at what we do. Sec­ond, we don’t look at op­ti­miz­ing in­di­vid­ual siloed mod­ules or func­tions only. We look at all the tasks in the end-toend ser­vice de­liv­ery flow and we op­ti­mize the to­tal­ity of the flow. You can find many solutions out there from ven­dors and you will have to do that if you do it your­self. Even if you op­ti­mize one task it doesn’t mean you have op­ti­mized the whole flow. It de­pends on how it in­ter­acts with the rest of the tasks. As a man­aged ser­vices provider we can be very ag­nos­tic and use best of breed solutions and op­ti­mize the work­flow con­tin­u­ously.

Third, be­cause it’s our job to en­sure a great me­dia ex­pe­ri­ence, we use the lat­est tech­nol­ogy in­no­va­tions and we in­te­grate them into our work­flow. If we can’t find some­thing use­ful then we will de­velop it our­selves. We also de­velop the glue or in­ter­op­er­abil­ity be­tween tech­nolo­gies for the best pos­si­bly in­te­gra­tions. Ul­ti­mately, we are try­ing to cre­ate the best me­dia ex­pe­ri­ence pos­si­ble for our cus­tomer’s view­ers. Buy­ing a ser­vice means you will have ac­cess to the lat­est in­no­va­tion and tech­nol­ogy and you will ben­e­fit from greater agility, speed and a higher level of in­no­va­tion.

Fi­nally, there is of course the fi­nan­cial ar­gu­ment – as a stand­alone broad­caster you have to re­fresh tech­nol­ogy ev­ery 5-10 years, which means a huge up­front capex in­vest­ment, and then you have to drive and fund on­go­ing in­no­va­tion and change in­vest­ments. You will also need your own ded­i­cated op­er­a­tional and engi­neer­ing teams. Now scale that up to an in­dus­try level and clearly, it’s not very ef­fi­cient as com­pared to shar­ing tech­nol­ogy and op­er­a­tional ca­pa­bil­i­ties be­tween broad­cast­ers and con­tent providers. As a man­aged ser­vices provider we can act as a fa­cil­i­ta­tor where we in­vest and share the fruit of the in­no­va­tions with our many cus­tomers which is a more ef­fi­cient in­vest­ment and op­er­a­tional model.

DS: What trends did you no­tice at IBC? Did you no­tice any shifts in what cus­tomers are look­ing for? Nylund:

There are a few clear shifts. The main thing I no­ticed is cus­tomers are

look­ing for in­creased agility. In the old days, you ei­ther signed a con­tract with us for 10 years for a cer­tain ser­vice – play­out or me­dia man­age­ment for ex­am­ple, or you built it your­self, which means a long cy­cle to re­coup the in­vest­ment. What cus­tomers are look­ing for now is the abil­ity to add new fea­tures and func­tion­al­ity, spin up or spin down new chan­nels and con­tent of­fer­ings quickly, or to change the scope of their ser­vices.

The in­dus­try is mov­ing to­wards a more on-de­mand model, where you can quickly buy the ser­vices that you de­mand with­out hav­ing to com­mit to big in­vest­ments. So, agility in terms of the com­mer­cial model and in terms of the tech­nol­ogy ser­vice model. That’s why there cur­rently is a lot of fo­cus on vir­tu­al­ized and soft­ware de­fined work­flows that can pro­vide the flex­i­bil­ity that the in­dus­try is look­ing for.

DS: With IP work­flows not yet ubiq­ui­tous, how long will broad­cast con­tinue to be in a hy­brid phase? Nylund:

We will be in a hy­brid world a lit­tle bit longer be­cause the broad­cast world has not come as far in terms of vir­tu­al­is­ing all func­tion­al­ity. We still use a lot of very broad­cast cen­tric and unique tech­nol­ogy which has not been vir­tu­alised yet. But the in­dus­try will move to­wards IP based or rather soft­ware de­fined op­er­a­tional mod­els.

As an ex­am­ple, dur­ing IBC 2018 Red Bee Me­dia demon­strated a soft­ware de­fined play­out de­ploy­ment for un­com­pressed feeds, with­out the use of any sin­gle task hard­ware, which is some­thing very dif­fi­cult to do and no one has been able to do un­til now as far as I know. We feel we will be one of the par­ties that leads the in­dus­try to­wards IP based vir­tu­al­i­sa­tion. It will prob­a­bly take a few more years be­fore the tech­nol­ogy is read­ily avail­able for live and dy­namic feeds. It’s eas­ier to do that with com­pressed lower den­sity feeds, such as on a VOD ser­vice. We want to be able to man­age a fully soft­ware­de­fined play­out flow ca­pa­ble of pro­cess­ing un­com­pressed hi-den­sity live feeds for live sports or events such as the Olympics or World Cup. We have demon­strated how it can be done and soon enough, we

ON THE TECH­NOL­OGY SIDE, WHEN IT COMES TO QUAL­ITY – THE DEN­SITY WITH WHICH YOU CAN SERVE VIDEO CON­TENT, I THINK WILL JUST CON­TINUE TO EVOLVE AND THAT IS DRIVEN BY CON­SUMER DE­MAND. AS DE­VICES GET BET­TER AND NET­WORKS BE­COME MORE CA­PA­BLE, WE CAN CON­TINUE TO IM­PROVE DEF­I­NI­TION STAN­DARDS AND WE SHOULD EX­PECT THAT THAT HAP­PENS.

will take it to mar­ket. Then you have the prac­ti­cal mat­ter of tran­si­tion­ing from old to new tech­nol­ogy, while main­tain­ing ser­vices on air dur­ing tran­si­tion. This must be a care­fully planned and con­trolled process for which we have a great level of ex­pe­ri­ence and ex­per­tise.

DS: There is a lot of talk about mov­ing from capex to opex

oper­at­ing mod­els. Is the move to IP work­flows all about sav­ing money? Nylund:

I ac­tu­ally don’t think sav­ing money is the main driver – yes, ul­ti­mately cus­tomers ex­pect to save money, but it is not and should not be the pri­mary driver for tran­si­tion­ing to agile and IP based work­flows. It’s not nec­es­sar­ily that much cheaper if you look at the in­vest­ment you need to do and the cost of run­ning it with com­put­ing and stor­age ca­pac­ity, at least not just yet.

The main driver to go to­wards a soft­ware de­fined IP tech stack: With tra­di­tional broad­cast cen­tric and ded­i­cated tech­nol­ogy, if you want to add a chan­nel it can take any­thing from 3-12 months to make it hap­pen. You have to de­sign the so­lu­tion, pro­cure and add the tech­nol­ogy, in­stall, in­te­grate and test the tech­nol­ogy and so forth.

When the plat­form and work­flow be­come soft­ware de­fined, then rather than adding ded­i­cated broad­cast tech, you will de­fine and spin up the new chan­nel based on soft­ware con­fig­u­ra­tion only. What we are do­ing is con­vert­ing the work­flow func­tion­al­ity into soft­ware de­fined vir­tu­alised func­tion­al­ity and then we run that on a hy­brid cloud in­fra­struc­ture. We are cloud­i­fy­ing the in­fra­struc­ture which means you can scale the ca­pac­ity as the cus­tomer de­mands and that’s re­ally the main rea­son why there is a move to­wards end-to-end IP in­fra­struc­ture – it’s re­ally about the agility it pro­vides.

When you are oper­at­ing on a uni­fied soft­ware de­fined func­tion­al­ity then you can also move into glob­ally vi­able op­er­a­tional mod­els. You can have teams sit­ting re­motely and ser­vic­ing cus­tomers glob­ally. To de­ploy a new cus­tomer to your plat­form be­comes much more agile. You can also have a more flex­i­ble com­mer­cial model be­cause now you can charge a cus­tomer only for the in­cre­men­tal ca­pac­ity they use. We are mov­ing to on-de­mand pric­ing where you can have a stan­dard rate card for cer­tain ser­vices, for ex. if you want to add a chan­nel or man­age con­tent.

When ev­ery broad­caster has their ded­i­cated in­fra­struc­ture, usu­ally the av­er­age uti­liza­tion is quite low, if it is only used by one broad­caster. When you move into IP based mod­els and out­source it to ser­vice providers like us, then we can im­prove uti­liza­tion of the tech­nol­ogy and the work­force.

DS: Speak­ing of in­ter­op­er­abil­ity among ven­dors – is the in­dus­try where it needs to be?

Nylund:

The in­dus­try is not very in­ter­op­er­a­ble to­day ac­tu­ally, so there are still re­main­ing chal­lenges. To­day we ad­dress these chal­lenges by cre­at­ing in­ter­op­er­abil­ity be­tween process steps in our work­flows. We found as we are in­te­grat­ing dif­fer­ent mod­ules into our plat­form there are nu­mer­ous in­ter­op­er­abil­ity is­sues which we then work around, in­te­grat­ing mod­ules so they speak to each other and han­dle the con­tent flow. There is a lack of stan­dard­iza­tion gen­er­ally for in­ter­op­er­abil­ity needs so that’s some­thing we as an in­dus­try can work on to set stan­dards like other in­dus­tries have done. In the mean­time, we will con­tinue to mit­i­gate by mak­ing sure we use the best of mod­ules in our work­flow.

We work with in­dus­try bod­ies such as EBU or IBR and through those bod­ies, we try to drive stan­dard­iza­tion to­gether with the in­dus­try, so we can agree on stan­dards for in­for­ma­tion ar­chi­tec­ture and for in­ter­op­er­abil­ity def­i­ni­tions. An­other thing that needs to be driven in terms of in­ter­op­er­abil­ity is se­cu­rity be­cause when you have a lack of in­ter­op­er­abil­ity there are also more se­cu­rity risk ex­po­sures. Dif­fer­ent sys­tems have dif­fer­ent se­cu­rity ma­tu­rity lev­els, so that’s an­other good rea­son to drive in­ter­op­er­abil­ity, so we can man­age se­cu­rity is­sues.

IF EV­ERY BROAD­CASTER IN­VESTS IN THE SAME NEW TECH­NOL­OGY EV­ERY 10 YEARS, IT’S NOT VERY EF­FI­CIENT AS COM­PARED TO SHAR­ING TECH­NOL­OGY BE­TWEEN BROAD­CAST­ERS AND CON­TENT PROVIDERS. AS A MAN­AGED SER­VICES PROVIDER WE CAN ACT AS A FA­CIL­I­TA­TOR WHERE WE IN­VEST AND SHARE THE FRUITS OF IN­NO­VA­TION WITH OUR CUS­TOMERS.

DS: The in­dus­try seems to be get­ting more frag­mented in terms of stan­dards and plat­forms?

Nylund:

If you look at the ser­vice provider or tech­nol­ogy provider seg­ments we con­tinue to see con­sol­i­da­tion. There has been some con­sol­i­da­tion in re­cent years and it will con­tinue. If you look at our cus­tomers, the me­dia com­pa­nies, then there is clearly con­sol­i­da­tion there as well. Me­dia com­pa­nies are buy­ing smaller play­ers be­cause they want con­tent and their sub­scriber bases. Then you also see dis­trib­u­tor con­sol­i­da­tion with telco op­er­a­tors in­vest­ing and mi­grat­ing into the me­dia ver­ti­cal be­cause they want to of­fer con­tent and not be con­fined to be­ing just a bit-pipe for data, they want to of­fer and con­trol their own con­tent. So that will con­tinue to drive con­sol­i­da­tion.

If you look at what Eric­s­son has done in the last few years in build­ing Red Bee Me­dia, it made a few ac­qui­si­tions, it ac­quired Tech­ni­color’s busi­ness, then bought Red Bee Me­dia from the Mac­quarie group and then bought a busi­ness in the US with FYI tele­vi­sion. So, we have also been driv­ing con­sol­i­da­tion. The main rea­son for why we will see more con­sol­i­da­tion is that it makes fi­nan­cial sense. When you ad­vance tech­nol­ogy in­no­va­tion, scale mat­ters. When you in­vest in in­no­va­tion and spread that in­vest­ment across mul­ti­ple cus­tomers, the more ef­fi­cient it be­comes.

On the tech­nol­ogy side, the qual­ity and the den­sity with which you can de­liver video con­tent is in­creas­ing and is driven by con­sumer de­mand. As de­vices get bet­ter and as the net­works be­come more ca­pa­ble we can and will con­tinue to im­prove def­i­ni­tion stan­dards.

There will be more and more types of

ul­tra hi-def­i­ni­tion for­mats which drives com­plex­ity in the work streams, and we have to pre­pare con­tent and de­liver in all of these for­mats. It’s also a rea­son why you will see con­sol­i­da­tion, be­cause to man­age the tech­nol­ogy com­plex­ity re­quires a cer­tain level of in­vest­ment, skill and scale and if you’re too small you won’t have enough mus­cle to keep up. For us com­plex­ity is a good thing. We are good at man­ag­ing com­plex­ity and we thrive on stream­lin­ing, in­te­grat­ing and sim­pli­fy­ing it as much as pos­si­ble. When op­er­a­tions and tech­nol­ogy be­come in­creas­ingly com­plex, it is an­other good rea­son why cus­tomers should out­source ser­vices to providers like us. We love to man­age tech­nol­ogy com­plex­ity!

DS: With the in­tro­duc­tion of the OTT play­ers, is there a shift in opin­ion of how con­tent own­ers can go di­rect to con­sumers?

Nylund: FAANGS or the OTT ag­gre­ga­tors have clearly dis­rupted the mar­ket for tra­di­tional broad­cast­ers and con­tent providers, as com­pe­ti­tion for con­tent, view­ers, sub­scribers and share of wal­let has in­creased sig­nif­i­cantly.

The tra­di­tional value chain was that you first had com­pa­nies who pro­duced and owned con­tent, like the studios and pro­duc­tion houses or con­tent own­ers like sports leagues etc. They sell the rights to pack­agers in the form of broad­cast­ing net­works and then you had the dis­tri­bu­tion layer of satel­lite, ter­res­trial and ca­ble TV op­er­a­tors. This value chain was dis­rupted by OTT ag­gre­ga­tors who ac­quired con­tent rights and then they by­passed the TV net­works, pack­agers and dis­tri­bu­tion guys, straight to con­sumers. What’s hap­pen­ing now is that the con­tent rights own­ers are dis­rupt­ing the mar­ket again by go­ing di­rect to con­sumers, by­pass­ing not just TV pack­agers and dis­trib­u­tors but also third-party OTT ag­gre­ga­tors – they are go­ing di­rect to their end users.

I ex­pect that trend to con­tinue, at least among larger play­ers, as ex­em­pli­fied with com­pa­nies like Dis­ney who own great con­tent and are buy­ing more me­dia com­pa­nies who own con­tent. They are ex­pected to pull their con­tent from OTT ag­gre­ga­tors like Netflix. Which tells you the im­por­tance of con­tent own­er­ship – and this is also why OTT ag­gre­ga­tors have started to in­vest heav­ily in orig­i­nal con­tent be­cause they know they can­not rely solely on other con­tent own­ers as that would put them at risk of be­ing by­passed in the value chain.

The DTC (Di­rect to Con­sumer) trend will con­tinue, as will the OTT ag­gre­ga­tion trend and as Red Bee Me­dia we there­fore need to make sure our ser­vice ca­pa­bil­i­ties are as rel­e­vant as ever, not only to the more tra­di­tional TV broad­cast­ers but also to the con­tent own­ers and OTT play­ers. One of our strengths is that for many decades, we’ve man­aged the most com­plex and de­mand­ing live dy­namic feeds there are. We have pro­vided man­aged ser­vices for cus­tomers broad­cast­ing and stream­ing high pro­file live events in sport and mu­sic, in­clud­ing the FIFA World Cup and some of the big­gest dance and mu­sic fes­ti­vals in the world. We have done that for lead­ing broad­cast­ers like the BBC and ITV Chan­nel 4 in the UK, TV 4 in Swe­den, MTV in Fin­land and NPO/NOS in Hol­land.

As our cus­tomers, both tra­di­tional broad­cast­ers and emerg­ing con­tent providers, in­vest in their new of­fer­ings, what you will find is that they will need to fo­cus on unique and live con­tent. That’s where our ser­vice ca­pa­bil­i­ties come into play and so we fo­cus on con­tin­u­ing to

be the leader when it comes to live and dy­namic con­tent.

One of the main chal­lenges for the OTT play­ers is pro­vid­ing qual­ity feeds and streams. There have been sev­eral re­cent ex­am­ples of OTT con­tent providers buy­ing rights to live con­tent that was then pro­vided to the au­di­ence in less than de­sir­able qual­ity. As these pure OTT providers start in­vest­ing in live con­tent, they also will need to se­cure broad­cast grade ca­pa­bil­i­ties for live dy­namic con­tent which is some­thing they don’t have to­day.

It’s much more dif­fi­cult to pro­vide a qual­ity me­dia ex­pe­ri­ence for high qual­ity live con­tent than it is for prepack­aged, sim­ple and com­pressed non-live feeds. We as view­ers now ex­pect to get the con­tent in the high­est qual­ity pos­si­ble. In broad­cast­ing and stream­ing live you also have to add re­li­a­bil­ity as a key fac­tor – the feeds need to be up and stay up. These are the main chal­lenges and Red Bee Me­dia has the re­quired ex­pe­ri­ence and skills to both sup­ply im­age qual­ity and re­li­a­bil­ity in a live con­text.

All our plat­forms have been built with the view they have to man­age high def­i­ni­tion dy­namic live feeds and as well the sim­ple non-live feed, so flex­i­bil­ity is key. We are prod­uct ag­nos­tic in the sense that we use the best tech­nolo­gies we can find, and we run on scal­able in­fra­struc­ture. We can on­board new chan­nels very quickly and we can do that with broad­cast grade ca­pa­bil­ity, so that you get the qual­ity of out­put you ex­pect as an end-user.

It’s more and more im­por­tant for all con­tent providers to have a pro­fes­sional high-qual­ity OTT of­fer­ing. OTT is also im­por­tant be­cause it runs on a trans­ac­tion plat­form where you can get much more data and valu­able an­a­lyt­ics which al­lows you to be­come smarter in terms of viewer pref­er­ences, and you can be­come more per­son­al­ized and rel­e­vant to the viewer.

DS: How was Red Bee Me­dia’s ex­pe­ri­ence at IBC, and what is your out­look for the Mid­dle East? Nylund:

We had a very suc­cess­ful IBC where we for the first time in many years came as Red Bee Me­dia fol­low­ing our re­brand­ing in late 2017. We at­tracted a lot of in­ter­est with four times more vis­i­tors than in past years. Our stand was very crowded, and we were all ex­hausted but very happy af­ter be­ing on our feet 24/7 dur­ing IBC! We man­aged to at­tract a lot of at­ten­tion around the things that we de­moed, in­clud­ing the first un­com­pressed HD feed through a soft­ware only de­fined play­out de­ploy­ment. We de­moed a live vis­ual ra­dio stu­dio to show­case how our live re­mote pro­duc­tion works, with real-time feeds in HD qual­ity. Feeds of all the In­ter­views on­site at IBC were sent back to our MCR in Hil­ver­sum (Hol­land) where they were dis­trib­uted over our man­aged OTT plat­form. We de­moed our me­dia man­age­ment plat­form called Nu­cleus which also gen­er­ated a lot of in­ter­est. An­other demo that gained a lot of in­ter­est was our live au­to­matic subti­tling plat­form which will en­able un­reg­u­lated con­tent to be cap­tioned with near broad­cast qual­ity, a so­lu­tion we have de­vel­oped to­gether with Speech­matic. So, it seems there is a lot of in­ter­est for our in­no­va­tions and we are very pleased with that. In the Mid­dle East we are hon­oured and proud to ser­vice Fox Mid­dle East which is our pri­mary cus­tomer there and we con­tinue to ser­vice that re­la­tion­ship. We think there are great mar­ket op­por­tu­ni­ties In the Mid­dle East and the in­dus­try will con­tinue to de­velop. Broad­cast­ers, tele­com op­er­a­tors and con­tent providers will con­tinue to seek new ca­pa­bil­i­ties. We think we have a lot of value to add in terms of ex­pe­ri­ence, in­no­va­tion and also more ef­fi­cient op­er­a­tional mod­els and ser­vices.

The larger broad­cast­ers have been work­ing in the tra­di­tional model for some time with be­spoke broad­cast tech­nol­ogy and they are quite nat­u­rally now in the phase where they have to ei­ther in­vest in and re­fresh tech­nol­ogy, or out­source op­er­a­tions, as they face chal­lenges around mod­ern­iz­ing and the need to in­crease ca­pa­bil­i­ties. As they look to trans­form their ser­vices, many of them are now eval­u­at­ing dif­fer­ent op­tions – how they can be­come more ef­fi­cient and evolve to cre­ate new rev­enue op­por­tu­ni­ties.

We look for­ward to tak­ing part of and sup­port­ing the evo­lu­tion of the in­dus­try in the Mid­dle East. The re­gion shows a lot of in­ter­est in de­vel­op­ing the me­dia in­dus­try and in Abu Dhabi and Dubai for ex­am­ple com­pa­nies are in­vest­ing in me­dia zones. We can see a com­mon in­ter­est from both an in­dus­try and gov­ern­ment point of view, in evolv­ing the mar­ket for the ben­e­fit of the con­sumer.

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