Distribution & Delivery Global Viewpoint – August 2016

Leverage Shared Services To More Profits

Netflix announced plans to spend $5 billion on new programming in 2016. 21st Century Fox announced plans to reduce staff overhead by $250 million in the coming 2017 year. How will you create more content with fewer resources?

Broadcast and cable networks find themselves in an increasingly challenging market. Newer online video providers with massive budgets and increased production of original programming are transforming the media landscape and putting added pressure on traditional networks.

As the pressure to produce more content with ever-stretched assets mounts, broadcasters need new tools. Of course, many vendors point to IP as the solution. However, the technology is not necessarily today’s only solution.

Sure, there plenty of vendors who tout their “IP solutions,” mature, flexible and ready to go, but while that may be true, broadcast and production IP is still in its infancy. Only when there is an agreed-upon standard and multiple solutions to the same production task, will the forward path be steady.

So, what is a future-safe way to more forward into the yet-grey world of IP?

One path may be for broadcast and cable networks to devote more resources and time to differentiators, such as creating content and monetization that contribute directly to their bottom line. (I do not like the word monetization. Even MS Word has no definition or synonym for it. It really means making money.)

Click to enlarge.

Click to enlarge.

So for sake of discussion, let us just say monetization means, we have to be more efficient at whatever we do. We now have some new tools: file-based workflows, IP interconnectivity, cloud-based storage, SaaS, virtualization. Notice none of these is a specific product; it is not a server, production switcher, or camera. None of these tools alone will make your facility any more money. The goal could be, to change the infrastructure in ways that enable you to manage an increasingly complex technical operation at lower cost.

Outsourcing benefits

Europe is far ahead of North America in this area. Centralized playout channels service perhaps dozens of broadcasters and channels. It is no longer necessary for every TV network to purchase staff and maintain an expensive playout center. Instead, consider moving that part of the broadcast chain to an outside vendor. A playout center can offer the latest technology, performance features, lower-labor costs, and fast transition to new formats. Such vendors offer a many performance levels, all measured, and reported to the broadcaster.

Examples include several familiar networks. In mid-2014, Turner Broadcasting launched a significant round of cost cutting by laying-off hundreds of workers. 1 Last year, ESPN reported it planned to cut costs by streamlining its production process and re-investing that money into more live coverage of events.2 Most recently, 21st Century Fox announced plans to reduce staff overhead by $250 million in the coming 2017 fiscal year.3

As companies search for innovative ways to save money and reallocate budgets, switching to a shared technical services infrastructure should be a top priority. This solution delivers free cash flow and allows broadcasters to focus their resources in areas that drive competitive differentiation as well as audience and revenue growth.

This example illustrates some areas where broadcasters can leverage outsource support and some of the benefits that may be realized. Click to enlarge. Source: Encompass

This example illustrates some areas where broadcasters can leverage outsource support and some of the benefits that may be realized. Click to enlarge. Source: Encompass

Think outside the box

The cloud is often seen as an easy way to cut costs while increasing flexibility. A recent article in The Broadcast Bridge discussed how Brazilian broadcaster Globosat had built an infrastructure to stream 40 channels of the 2016 Rio Olympics. The solution relied on Elemental streaming encoders and the AWS cloud.

However, two weeks before the competition began, management ask for an additional four streaming broadcast channels. If the broadcaster’s streaming solution had consisted of Lego-like building blocks of technology, it might have been impossible to meet that goal. At minimum, there would be additional equipment costs.

Instead, the engineers leveraged their Elemental streaming system, which was configured for 40 channels, into a 44 channel streaming solution. Globosat’s Software Defined Network (SDV) came to the rescue. Cost-negligible, time to solution, days. This is the kind of new thinking engineering managers will need.

Example outsourcing

Broadcasters and cable networks need to place a high emphasis on improving operational efficiencies. The first option may be turning to media technology services providers to manage today’s increasingly complex technical operations. Service providers may be able to provide more service, additional options and at a reduced cost. By outsourcing the technical infrastructure and operations, broadcast and cable networks can focus more on their core competencies of creating and monetizing their content. Savings and time gained from outsourcing can be redirected to programming investments or immediately improve profitability.

Here some areas where shared services partners should be considered:

Broadcast TV and cable networks

  • Centralized Master Control

On-premise or cloud-based channel playout, network integration, branding, and live operations

  • Centralized Ingest and Preparation

Including syndicated recording, content aggregation, quality control, and archive

  • Full -Time Distribution

Satellite or terrestrial IP transport

  • Uplink, Satellite Capacity, and Fiber Services

A global teleport and fiber infrastructure that provides highly flexible connectivity options

  • Disaster Recovery

Solutions for content replication, backup media operations, fully synchronized playout protection, and distribution backup

  • Managed IP Transport

Implementation of networks that enable real-time or file-based content sharing and collaboration between stations, bureaus, and third parties

Digital streaming services

  • 24/7 and Event Streaming

Full-time streaming to downstream platforms

  • Video On Demand (CVOD/VOD)

Creation, packaging, and distribution

  • Content Delivery Networks (CDN)

Procurement at a high volume enabling competitive rates to stream content globally

  • Online Video Platforms (OVP)

Strategic relationships with industry leading providers for storage, paywalls, monetization, and analytics

  • Dynamic Ad Insertion

Ads-as-a-service model partnering clients with ad service vendors to fulfill sales requirements and maximize revenue

  • Dynamic Program Replacement and Reorder

Automated solutions to decorate channels with triggers that enable unlimited downstream outputs for monetization

A last word

In today’s rapidly changing landscape of new technology and increased competition, it is imperative for broadcast and cable networks to deploy asset light, cost effective, and flexible models for the delivery of their content across platforms while focusing their investments on driving differentiation.

Companies that recognize the importance of flexibility and the need to focus resources on content creation, audience development, and monetization will leverage shared technical service providers and reap the financial benefits.

Editor note: An in-depth discussion of leveraging shared services in the form of a white paper is available from Encompass here.


  1. Turner Broadcasting to cut costs; older workers offered buyouts
  2. How ESPN plans to save millions on broadcasts without you ever knowing
  3. 21st Century Fox Looks to Cut $250 Million in Film, TV Staff
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