This article first appeared in the
Winter 2017 issue of The Record.
The media industry is in the midst of a revolution and a fundamental shift of power is affecting virtually every media organisation. “Rather than a broadcaster ‘pushing’ content it selects out to viewers for them to watch at scheduled times on a TV set, the viewers are now increasingly in charge – ‘pulling’ whatever content they want to consume from whichever media organisation has it, at whatever time suits them and on whatever device they want to watch it,” explains Lorenzo Zanni, lead analyst at IABM, the international trade association for suppliers of broadcast and media technology. “I’m not saying what we would traditionally call ‘broadcasting’ is dying, but it is having to compete with new kids on the block – and develop a new business model which mines new ‘digital pennies’ alongside slowly decreasing ‘broadcasting dollars’ from advertising or subscriptions.”
Tony Emerson, Microsoft’s managing director for Worldwide Media and Cable, echoes Zanni’s thoughts. “The industry is having to move from mass media to personalised media,” he says. “Prime time is a thing of the past. Now consumers can watch whatever they want, when they want. Instead of releasing an episode of a series per week, many broadcasters are making a whole boxset available. It’s an interesting change and presents a number of challenges.”
According to Emerson, one of the biggest challenges is that digital distribution is simply not as profitable as traditional broadcasting. “This means that media companies need to get better at understanding their audiences,” he says. “By having access to the critical information about who is watching what show and when, they can better target shows and charge more money for every impression made.”
However, the disintermediation of the media industry means that this valuable information often lies in the wrong hands. “All too often it’s the streaming companies that hold the data,” Emerson explains. “That’s why many media companies are creating direct to consumer offerings. Disney Life is a recent example.”
With so many companies making media their business, another challenge lies in the ability to deal with files in any number of differing formats. “Companies need to be able to move around or alternatively have access to files and not be restricted by employee locations,” says Nigel Booth, executive vice president of Business Development and Marketing at Microsoft partner IPV. “This is why having the right asset management system in place becomes incredibly important.”
A further challenge lies in the ability for broadcasters and media companies to have the flexibility and agility they need to attract and retain fickle viewers who have ever-increasing media options at their fingertips. “They need to be able to scale up – and scale down – instantly, or launch a new service quickly – and take it down just as rapidly too,” says Zanni. “That’s not easy with fixed, on-premise infrastructure, so media companies are increasingly looking to IP signal flows and the cloud to deliver this, and moving to a pay as they use (Opex) business model rather than making one-off investments (Capex) in fixed infrastructure. They are also beginning to exploit the power of artificial intelligence across their entire operations – increasing workflow efficiency in content management, monetisation, distribution and delivery.”
Despite this upheaval, the recently published IABM End-User survey found the great majority of broadcasters and media organisations are optimistic about the future, with multi-platform delivery and IP infrastructure at the top of their purchasing priorities. “The cloud came in at number six, behind social media broadcasting and media asset management,” explains Zanni. “This may be surprisingly low to some readers, but while the new media players such as Amazon and Netflix have been able to build their new-wave infrastructure from scratch, many traditional media companies simply can’t afford to ditch expensive, existing infrastructure wholesale, so are transitioning step-by-step. According to the survey, 37% of end-users have already deployed cloud-based solutions, with a further 55% intending to do so in the next 2-3 years. From an historical perspective, this is a record-high for cloud adoption, indicating that media technology users are becoming more aware of its benefits.”
Microsoft and its partners are helping to facilitate this shift, supporting the entire broadcasting supply chain, covering both pre- and ¬post-production. “We’re delivering content storage, media encoding, rendering, advanced analytics and more,” says Emerson. “Our partners are strengthening our proposition. Avid, for example, is using the Microsoft Azure cloud to power customers’ content, globally, and we will co-develop cloud-based solutions and services for the media and entertainment industry, powered by the Avid MediaCentral Platform, an open, tightly integrated and efficient platform designed for media.
Microsoft Azure can integrate with IPV’s Curator system to allow Microsoft users to work remotely through advanced proxy workflows. “The combined technology lets users collaborate on a global scale through Curator, removing traditional location based restraints,” says Booth. “Remote working is becoming increasingly important as it allows companies to manage the greater volume of content they are producing.”
“Then there’s Ooyala, a Microsoft partner and provider of premium video platforms, media logistics and advertising, which is integrating its Ooyala Flex media logistics platform with Microsoft Cognitive Services,” Emerson continues. “As a result, the company is able to simplify metadata capture by extracting transcripts, detecting faces within videos, and analysing text to detect key topics. Ooyala then uses that rich metadata to recommend relevant videos to viewers and to deliver targeted advertising.”
MPP Global, meanwhile, is leveraging the processing power of Microsoft Azure to enhance eSuite – a solution which, using machine learning, provides targeted subscription video on-demand and transactional video ¬on-demand models which optimise conversions, and increase engagement opportunities throughout the customer lifecycle.
“Such an approach opens the gates to a goldmine of untapped customer data,” explains Paul Johnson, MPP Global’s CEO and co-founder. “With digital content, media companies can build much closer and more engaged relationships with consumers.”
What’s more, as an individual progresses through the journey to become a paying customer, eSuite handles the entire billing lifecycle of the subscription, determining the content entitlements of users to authorise or deny access of content or apply surcharges for new releases or premium content. “The ability to handle all international payment types, methods and currency in a secure environment is a necessity for the majority of media companies today,” Johnson adds.
This is just the start of a monumental shift across the industry. While no one knows exactly what the future holds, Zanni is confident that the customer experience will be at the crux of new changes. “We are very much at the beginning of the next media revolution today,” he says. “Live programming using IP signal flows and the cloud is the next step forward. Quality of experience will be a key factor in its success – as with all internet-delivered media; buffering is no longer acceptable, for example; consumer expectations continue to rise.
“There will be more and more media options for viewers – and more media organisations looking to protect their brands (such as the Disney example provided earlier). This throws up a new challenge in providing simple and quick routes for viewers to find the media they want; some form of platform consolidation is therefore likely. What will not change, though, is the need for great content to engage audiences, and both traditional broadcasters and the new media companies will continue to invest more and more heavily in creating such content.”
Zanni believes that there will be greater emphasis too on fully exploiting existing content, and AI will be able to help here with automated indexing so relevant material can be quickly found and aired. “AI will become a dominant force in helping media organisations to exploit and monetise all their assets ever more effectively – underpinning an ever-closer knowledge and understanding of every individual viewer’s preferences as big data continues to get bigger – and go deeper. The cloud will continue to grow in importance and be key to storing, processing and delivering media to any place, at any time on any device.”
Both Zanni and Emerson agree that the end-game for media organisations is dematerialisation – their new premises will ultimately be the cloud, and while this will ultimately give them access to a practically unlimited resource, they will only be paying for what they actually use, so delivering profitability even in a very fragmented viewership.
“The cloud will undoubtedly open new doors across the industry,” Emerson says. “It will enable broadcasters and media companies to trial new ideas without huge investment. For example, they can test virtual reality downloads – which may prove to be a gamechanger in the industry, or may sink fast – in a pay as you go manner. The cloud will enable the flexibility to evolve and better meet customer expectations in new and exciting ways.”
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