Clunky consolidation

NAB2007 saw even tighter integration of telecoms, IT and broadcast, yet there is not always compatibility in consolidation.

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By  Mark Evans Published  June 5, 2007

Consolidation of broadcast technology is increasingly rife in every sector of the industry, 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 USA and Virgin Media in the UK indicates increasing uptake of the on-demand offering.

A major concern around consolidation for both broadcasters and content providers is revenue loss, particularly as viewers increasingly use PVRs as a means to skip ad breaks.

Closer to home, Jordan Telecom Group acquired a 51% stake in Bahrain-based telecommunications services provider, Lightspeed Communications in April 2007 to enter new markets including double-play and triple-play services (VoIP, video and data services over a converged connection) in Bahrain before the end of summer. The company has 12 million customers in Jordan and Egypt.

In a further example, at CABSAT 2007, IBM showcased its IPTV consulting and infrastructure services, including a triple-play solution that combines the capabilities of IBM, Cisco and Minerva Network.

However, in forging ahead with new services, there are often back-end technical considerations. For example, VOD represents different logistics from subscription in terms of broadcast technology and payment systems. This applies to both viewers ordering and receiving content and to advertisers or sponsors seeking deals.

In the USA, the time-spans required for consolidation add a further layer of challenges. For example, interactive TV never reached its full stateside potential because of the need to re-encode content, which was too lengthy a process. Ultimately, its use was negated by the arrival of IPTV, which can reach audiences using standard networking technology.

Meanwhile, other service providers are experimenting with payment models. In addition to its mainstream pay-TV package, Spanish cable company Ono, for example, offers ‘micro-payments' whereby viewers buy only the content they want in a ‘mini-basic' package. Using this model, phone and/or broadband customers receive free TV channels and VOD access for US $4 each month.

Spare a thought for the already stretched accounts departments of broadcasters. Where advertisers used to be the only upstream revenue source, they are now joined by programme and event sponsors, web site and banner advertisers, and sponsors of secondary events, such as logos. Now, there are also downstream revenues from viewers themselves with opportunities in PPV, iPPV, NVOD, TV service subscriptions, SVOD, iTV and SMS services.

Consequently, sales and marketing teams face the mammoth task of altering their targeting techniques and keeping on top of an increased number of accounts.

Another challenge is that TV content is refreshed more quickly than movies on a video server. Keeping everything up-to-date and tracking the location of more data requires sophisticated management systems.

It is clear 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 on these proliferating platforms, scheduling, advertising reconciliation and monies owed. There are significant challenges from VOD and PVR techniques, particularly as it means making a traditionally unicast service a multicast one. For example, when a viewer pauses live TV, they are switching from a unicast, perhaps live, transmission to a multicast service.

Not only must the broadcast have the transmission technology to enable this realtime switch in service provision, they must also have a business management system that can keep track of each viewer's use patterns.

A major concern around consolidation for both broadcasters and content providers is revenue loss, particularly as viewers increasingly use PVRs as a means to skip ad breaks. Corporations are, therefore, pushed to trial more sophisticated advertising systems, which in turn require a new and separate means of accounting for spots placed, audience ratings and the amount owed by advertisers.

The next challenge for service providers will be to insert and refresh ads on content that is stored on a server to allow a separate layer of advertising over content recorded on a server for VOD services. This ‘dynamic ad replacement' presents opportunities for advertisers to target their messages more precisely. It also promises increased revenues for broadcasters - if they can track it and account for it as cost effectively as they have done in traditional broadcast.

Yet the challenge of keeping track of multiple revenue streams with varying business models continues. Despite technological expansion at the front end to accommodate new models, it is rare that back-office functions, such as the accounts office, 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 also produces real-time reports of money received and owing. This also helps 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.

In response, growing number of media groups have seized the opportunity to exploit their back catalogues and provide an extra service to viewers. Apart from driving take-up, a challenge lies in finding a way of monetising on-demand platforms.

To help the VOD market reach its 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.

Mark Evans is managing director of MSA Focus.

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