Coming to Terms with Consolidation
Reprinted from: Broadcast Equipment Guide
July 2008
In the past, broadcast management systems operated largely in isolation. Broadcasters dealt with each individual income stream separately in their back-offices.Typically, they would have to enter different strands of a given order onto separate systems and track and manage them as disparate and independent streams. As a result, they would also have to generate and deliver multiple invoices for each individual contract.
This approach has never been cost-effective. It is even less so today. The new digital age has ushered in some major changes, which mean that a consolidated approach to broadcast management is more important than ever.
Reductions in the cost of establishing a broadcast service means many new services have become viable. Broadcasters are increasingly moving from a single to a multi-channel model. In addition, many organisations are developing broadcasting services to complement core business operations.
As a result, broadcasters and content creators alike are increasingly using additional methods of generating revenue. One by-product has been the creation of a myriad new revenue streams; encompassing everything from secondary event sponsorship to pay-per-view, video-on-demand (VOD) and Internet Protocol Television (IPTV).
A Complex Picture
This complexity is likely to intensify over time. Consolidation of technology is increasingly rife in every industry sector, from Pixel Power’s ‘newsroom in a box’ concept to Grass Valley’s Turbo iDDR, which combines an intelligent digital disk recorder with a broadcast server.
Beyond the broadcast arena, other industries once considered far removed are becoming integral to its ongoing development. The rise of multi-service operators (MSOs) such as Comcast in the US and Virgin Media in the UK indicates increasing uptake of the on-demand offering.
Earlier this year, Jordan Telecom Group (JTG), the Jordanian integrated operator, entered into a major partnership with Lightspeed Communications, a provider of advanced telecommunications services based in Bahrain, to launch innovative services in Bahrain such as bundled broadband services for the residential, small and medium enterprises, and the corporate sector.
In forging ahead with these new services, broadcasters, telcos and operators inevitably have to deal with the additional complexity of back-end solutions. They urgently need to find a way of incorporating all these different service elements and offerings into a business system that allows the administration process to be conducted seamlessly and methodically. This represents a major technical challenge.
The recent propagation of channels and services has brought broadcasters major commercial opportunities. However, unless they can manage these in a consolidated manner, which supports economies of scale, it will become prohibitively expensive to provide consumers with the truly immersive, televisual experience, which is technically achievable today.
A Raft of Challenges
Even the delivery of a single video-on-demand (VOD) package is, in itself, a hugely complex operation. The current standards typically require a broadcaster to define the content of each package and every element within a package will be compiled within the broadcast management system.
In practical terms, delivering VOD means providing multiple information files, such as the many elements of content and related metadata, such as a text synopsis, EPG information, cast details, audio and artwork. Then on top of all this, different prices may need to be assigned to the individual packages selected by consumers. All of this must be done as efficiently as possible and then accounted for in the back office. Even then, any late change to one item within a consolidated package will result in a new unique ID being generated, which generates a complex and unmanageable reconciliation process after transmission.
The emergence of VOD and personal video recorder (PVR) solutions has created another key challenge for broadcasters to overcome: the migration from traditional unicast services to multicast ones. Every time, viewers pause live TV, they are switching from a unicast to a multicast service. Not only does the broadcaster need access to the right transmission technology to enable the real-time switch in service provision, they also need a business management system that can incorporate the relevant data from the ratings agencies.
Achieving Revenue Assurance
A major concern around consolidation for both broadcasters and content providers is revenue loss, especially as viewers increasingly use PVRs as a means to skip commercial breaks. As a result, companies will be driven to try out more sophisticated advertising systems which in turn require new and separate means of accounting for spots placed, audience ratings and the amount owed by advertisers.
Service providers’ next challenge will be to insert and refresh ads on content stored on a server or directly on the PVR to allow a separate layer of advertising over content recorded on a server for VOD services. This ‘dynamic ad-placement’ will enable advertisers to target their messages more accurately. It also promises increased revenues for broadcasters – if they can track and account for it as cost-effectively as they have done in the traditional broadcast arena.
Another major issue is the proliferation of revenue streams. Where advertisers used to be the only upstream revenue source, they are now joined by programme and event sponsors, website and banner advertisers, and sponsors of secondary events, such as logos. Added to this, there are also downstream revenues from viewers themselves with opportunities in NVOD, SVOD, PPV, iPPV, pay TV service subscriptions, iTV and SMS services.
As a result, sales and marketing teams face the mammoth task of altering their targeting techniques and keeping on top of a rapidly increasing number of accounts. So, with new content becoming available all the time, it is not surprising that the preparation and management of broadcast systems is becoming ever more time consuming, costly and difficult to achieve.
In the US, the time required for system consolidation adds further layers of challenge. For example, interactive TV never reached its full stateside potential because of the need to re-encode content, which was too lengthy and costly a process. Ultimately, its use is negated by the arrival of IPTV, which can reach audiences using standardised networking technology.
Issues with IPTV
Despite its ability to support a more streamlined encoding process, the emergence of IPTV also brings its own consolidation challenges. The straightforward distribution path of IPTV services can however introduce new challenges to the broadcaster.
Broadcasters can run into particular difficulties when not using a bespoke decoding device. The ease of distribution of broadcast streams to IP addresses means the broadcaster must take care to ensure it is aware of the country in which a specific IP-address is located - whether it is in the UK, France, or Indonesia, for example. Otherwise, the broadcaster may have breached its contract by distributing material outside the region for which they have a licence.
This may also raise some serious censorship issues. If a broadcaster accidentally allowed delivery of a UK edit of a film to an international IP address, it would run the risk of conflict not only with the rights owners but also with censorship regulations of countries concerned. Broadcasters may also encounter difficulties by allowing consumers to download broadcast material to devices that allows content to be saved to a hard drive, or burning them to DVD and watching them multiple times. Within the DVB code of practice, there is a standard called Content Protection and Copy Management (CPCM), which allows broadcasters to combat such infringements, but the situation is currently less clear within the IPTV environment. All of these problems can be mitigated by using decoding devices from IPTV software solutions providers like Iceland-based Industria, with its Zignal suite that includes proprietary set-top boxes. In this way, broadcasters can be certain of knowing which household or business is receiving their IPTV service and can exercise much greater control over the whole distribution process.
Asset Management is Key
It is clear then that in consolidating anything, be it services, technology, platforms or corporations, there needs to be a means of keeping track of back-end functions, such as rights across proliferating platforms, scheduling, advertising, reconciliation and billing.
In most broadcast facilities today this remains a challenge. Despite technological expansion at the front end to accommodate new models, it is rare that back-office functions, like the accounts office, to receive any extra resources. This means, that such departments receive an increased workload without the additional staff to deal with it. A more cost-effective approach to help them keep up with the increase in traffic is to implement more efficient asset-management practices. Processes such as spot scheduling and playout, sales traffic and billing along with account management are all no less essential to business than transmission of programmes.
Consequently, demand is growing for automation of these workflows in ad-sales, transmission, data-gathering and marketing departments. Automating processes such as billing and accounts produces real-time reports which help ensure that broadcasters and content providers receive the revenues they anticipate as and when they are due; and that advertisers, sponsors and viewers pay the appropriate fees.
A trend in this proliferating market sees growing number of media groups seize the opportunity to exploit their back catalogues and provide an extra service to viewers. Aside from driving take-up, a challenge lies in finding a way of monetising on-demand platforms. To help diverse broadcast markets reach their full potential, broadcasters must eliminate the phenomenon of ‘clunky consolidation’. Streamlining the back-end functions takes the complexity from operations including scheduling and billing to maximise revenue streams from multiple sources.
Looking to the Future
Solutions like ForeTV from MSA Focus are now able to track and consolidate these back-end streams. As the market continues to rapidly evolve, the challenge will be to develop functionality that is able to manage the requirements for emerging models like true addressable advertising based on geo-demographics, where different versions of the same copy are tailored for placement into different streams. Key to this will be effective management of the vast range of micro-payments that such a model will involve.
In the future, especially for larger broadcasters, with multiple server files in different locations around the world, it will become increasingly important just to have consolidated broadcast traffic and billing system.
This solution will inevitably also impact on most departments across the organisation. The purchasing department will use it to define their budgets for buying content. The planning department, for example, will use it to shape the ‘look and feel’ of their on-air channel. The finance department will use it to work out their payment schedule and the media location team will use it to track the location and monitor the quality of the media content. Every time, a new business process, TV channel or service offering is provided by a broadcaster it will impact on the traffic and billing system and that change will, in turn, affect, most if not all departments across that broadcast operation.
It is clear that the age of clunky consolidation has passed and we are now entering a new era based on the concept of streamlined and fully integrated broadcast management.
Mark Evans: Managing Director of MSA Focus.
