EMBRACING THE CLOUD REVOLUTIONISES MANAGED BROADCAST SERVICES
As media technology end users virtualise their infrastructures, the technology suppliers are required to move to new business models based on the flexible provision of resources.
In the Editor’s introduction, we discussed how the search for agility is translating into increased spending on OPEX models rather CAPEX. According to IABM data, CAPEX spending in the industry slightly declined between 2015 and 2017 although general media technology investment has grown at most media companies. (Figure 1)
Industry investment in technology spending is moving towards OPEX as end-users try to make their businesses more flexible and responsive to market changes, through the increased virtualisation of their infrastructures.
The launch of direct-to-consumer offerings and the increased use of IT technology in operations is also creating an enormous amount of data end-users need to make sense of in order to keep up with the native digital players like Amazon and Netflix. Therefore, media companies are increasingly looking at how a technology vendor’s solution fits into their content supply-chains.
Some media technology suppliers have successfully transitioned to new offerings and found new ways to work with media companies. As media companies become technology builders rather than buyers, they look for suppliers who can help them by providing the tools to develop flexible and customized solutions. This though requires suppliers to transition from a transactional to a service-based approach to sales and new models of collaboration and engagement.
These models rely on a commercial model that prioritizes OPEX over CAPEX with the user spending in smaller, monthly cash flows rather than larger upfront payments. This transition quite often has an initial financial impact that may be difficult to absorb for some media technology organisations thus driving consolidation among technology suppliers. Skills also need to adapt to this change as new methods of services delivery increasingly demand a blend of broadcast and IT skills.
Managed services providers also act as innovation facilitators when they invest in R&D and shares the fruits of innovation with many customers in a more efficient and scalable investment and operational model. IABM research shows that media technology suppliers are focusing their R&D investment on virtualisation and IP (Figure 2), as well as moving to new business models that facilitate the flexible provisioning of resources through managed services.
MOVE TO THE CLOUD
By implementing an end-to-end managed services platform in the public/ private cloud that encompasses content preparation, channel playout, content delivery, and monetisation for both linear TV and OTT, broadcasters can scale up rapidly and deliver content innovatively. Even though the move to the cloud is a priority for most media companies, the use of on-premise infrastructure will not disappear any time soon. However, the changing nature of the media business means technology buyers now require more flexible payment models.
Many traditional broadcast service providers might not be able to deliver both TV and OTT playout services under one roof, leaving broadcasters facing further cost pressures just as multiscreen delivery becomes the norm.
Preparing playout-ready content from thousands of hours of content is a laborintensive process. Traditional broadcast infrastructure services involving higher CAPEX exposure and higher OPEX, are becoming unfeasible because of their physical, manual, and people-intensive operating models. Moving the content to the cloud makes it possible to integrate new-age automated processes using machine-learning techniques to reduce human intervention wherever possible and drive scalability.
Besides the benefit of automating manual processes, a cloud-managed broadcast service provider gives media networks a wide choice of specialist third-party service providers and pay-asyou-use infrastructure.
In the traditional playout setup, broadcasters are locked into physical broadcast-specific infrastructure that was assumed necessary to deliver “broadcast-grade” video. Today, everything needed to prepare the content for playout from postproduction, subtitle creation, and channel branding, to storage and archiving — can be done via software deployed on the cloud.
When the platform and workflow
become software defined, then rather than adding dedicated broadcast tech, one can define and spin up new channel services based on software configuration only. A virtualised playout platform can not only offer new-age readiness, but also help with tactical flexibility.
Operating on a unified software defined functionality also helps managed service providers move into globally viable operational models. Deploying a new customer to your platform becomes much more agile and teams sitting remotely can service customers globally. Media companies can access their workflows from any remote location through a web interface and monitor the service 24/7.
For example, virtualised playout today allows TV networks to merge primary and regional feeds, allowing them to selectively replace content without having to create a completely new feed. As a result, a virtualised playout offers unparalleled control over operations without sacrificing transparency.
Further, when every broadcaster has their dedicated infrastructure, average utilization is quite low. When you move into shared IP models and outsource it to service providers, utilization of the technology and workforce will improve.
MANAGING COMPLEXITY: WORLDWIDE CONTENT DELIVERY
A software defined cloud-based managed broadcast solution gives media companies unprecedented flexibility to deliver content to any geographical region via satellite, fiber, cloud, IPTV, and OTT models. By leveraging a delivery network built on partnerships with bestin-class teleports, fiber POPs, and CDNs, such platforms cover the entire globe and can deliver content to any region, by any combination of delivery models.
The general lack of standardisation for interoperability between vendor solutions is a challenge for the industry where managed service providers can offer a more efficient solution. As they optimise the end-to-end workflow, a managed service provider can address these challenges by creating interoperability between process steps in the workflows.
Increasing complexity in the media business is another reason why consolidation is happening on the supply side, because managing the technology complexity requires a certain level of investment, skill and scale. As devices get better and as networks become more capable, we will continue to see more ultra hi-definition formats, further driving complexity in the work streams, as media companies need to prepare content and deliver in all of these formats.
Red Bee Media CEO Steve Nylund recently told Digital Studio ME: “For a managed services provider, complexity is a good thing. When operations and technology become increasingly complex, it is another good reason why customers should outsource services to providers.”
THE RIGHT COMMERCIAL MODEL
The move to the cloud and softwaredefined virtual playout is introducing new business models in the media technology industry. As end-users increasingly use generic IT equipment instead of bespoke broadcast technology the market is seeing a deflation in pricing margins for technology suppliers.
The fragmented supply-side is struggling to make returns on investments made, driving consolidation among technology providers. As end users virtualise their infrastructures, the technology suppliers are required to move to new business models based on the flexible provision of resources.
The industry is moving to on-demand pricing where you can have a standard rate card for certain services. Devising the right commercial model for its technology vendor is often as crucial as getting the actual technology to work. Managed services providers will have to work out a rate card of predictable pricing for clients. The ability to rent capacity at a known price will help end-users make business decisions much quicker.
In the MENA region, 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 both invest in and refresh technology, or outsource operations. As they look to transform their services, many of them are now evaluating the managed broadcast services options so they can become more efficient and create new revenue opportunities.