ROI Part III – IBC 2016: Who plays and who pays?

Wow what an IBC! How was it for you, chaos and confusion? Or did you find the perfect ingredients for continued industry transformation?

In parts I and II – following NAB earlier this year – we looked at how to model and improve ROI for customers investing in new media technology and services. Based on recent real projects I shared some of the techniques used with broadcast and media businesses who are rationalizing operations and adopting new media services to reduce costs and increase revenue. To illustrate an acceptable level of risk and reward I used the ‘speedometer’ to challenge investment in 6 key areas.

Can we identify significant themes from this year’s IBC and link them to ROI?

This year 1,800 innovators including 249 first timers took their chances and exhibited at IBC 2016. Some 430 speakers (including yours truly) contributed to the 100+ sessions at the IBC Conference. There were over 50,000 visitors. So many smart-people looking for smart answers and a better ROI. The noise and the competition was intense.

Analytics and Insights

Insights and analytics were hot this year. Using these techniques the evolving digital and social media communities have now overhauled traditional broadcast. The sustained attack on linear pounds to gain new digital pennies is the new battle ground

“Multi-outlet broadcasting” is a useful expression I heard at IBC. I like how it concisely describes linear and non-linear services, however they are delivered. Broadcasters of all shapes and sizes have to balance the presentation of live and thematic programming through their available channels, platforms and apps whilst calculating the potential effect on revenue. Scarcity creates value whilst ubiquity may reduce it. The systems driving strategic media planning and ad sales, that we used to call traffic, sales and scheduling, are adapting rapidly to drive multi-outlet alongside CDN’s and new subscriber management systems.

In the optimal position are media players with new business models, driven by a clear content strategy, who understanding how to engage new viewers and identify the potential revenue. Others, held in a more cautious and defensive position, perhaps trapped by legacy are in a worse position. Practical analytics and insight will be pivotal to improving ROI.

I spoke with broadcasters who, after a few years of “doing OTT”, are finding that as take-up increases their transactional distribution costs are getting out of control with the public CDN service providers they are using.  So now they’re starting to look at intermediate caching and edge caching, already practiced by some net-attached cable and telco operators for years.

Live multiscreen delivery is the next hurdle for OTT.

Was there an exhibitor at IBC not offering OTT solutions? Currently implementing live synchronous video streams (like broadcast) is easier said than done. But with so many “digital pennies” on offer and the power of big iron IT and telco operators (directly partnering broadcasters), it won’t remain a barrier for very long. Terrestrial and satellite delivery will be matched by the internet experience, possibly sooner at higher Ultra resolutions and frame rates. This complicates ROI analysis when trying evaluate long-term commitment vs ad-hoc and transactional services.

About the I Word

IBC’s IP Interoperability Zone seemed to re-assure many seeking proof of the concept. Supported by AIMS and the IABM and working with AES, AMWA, the EBU, SMPTE and VSF, IBC created a dedicated exhibit to demonstrate verified technical progress so far in IP interoperability. This featured the “award-winning” VRT-EBU LiveIP studio which was used for IBCTV’s production this year. (Incidentally – are there now too many industry awards at IBC each year? I’m confused about each rewards relative value and its accreditation.)

IBC was a salutatory reminder that IP itself, which is sorely testing the industry’s best minds right now, is only an enabling technology. Achieving a positive ROI from using IP and SDVN’s to transport video files and streams depends on use cases underpinning the transformation to multi-outlet broadcasting. And, in adapting those use cases to exploit the different capabilities IP transport and SDVN’s offer. A deterministic cross-point routing switcher and a multi-cast IP network offer very different facilities.

Some use cases offer a clearer improvement in ROI from IP.

For example, using IP in production and contribution is now allowing multiple venues and facilities to be connected more flexibly. This enables wider sharing of both resources and talent. And access to the cloud for intermediate storage, remote post production and OTT. Whether satellite or internet enable IP also enables easier transport for the higher bit rates required for UHD and beyond.

Another area I’m often asked to baseline is the cost of media logistics. Simple, if desirable, cost reduction doesn’t usually give significant ROI. There were many vendors at IBC (automation, mam, many SaaS) proposing supply chain optimization.

I decided to challenge this and talked with Simon Eldridge from SDVI on the AWS booth. “IP enables better media workflow and flexible infrastructure management. And that combination finally provides real increased output with similar resource, or better efficiency and optimized resource utilization. Ideally 100% utilized on-demand infrastructure rather than over provisioned and underutilized. By using supply chain methods” he continued “SDVI’s solutions can allocate costs to each process in chain, and make intelligent decisions about allocating the appropriate quality of resource relative to the content’s priority or value. Transparent cost modeling and reporting provides baseline cost audit trails for every action”

I agreed, joining up media partners by adapting their existing in-house media logistics processes using elastic cloud infrastructure seems very appealing. If the pricing is competitive and transactional ROI seems favorable.

Is IBC a good investment?

For me, attending IBC remains a great investment. Key customers, trusted associates and leading suppliers generously share their expertise and industry perspective. But, I still don’t understand why some exhibitors invest many thousands of euro’s in their presence at IBC, and then don’t perform. It’s a show after all. Many behave off-hand at reception ignoring new customers whilst doing emails. Others give poor and inappropriate demos, with scant knowledge of how their solutions would be used. Others don’t follow up effectively. IBC’s best exhibitors are doing much better than the worst. Is poor performance at IBC a likely indicator of the poor ROI some suppliers would contribute down the line?

New drivers for ROI for 2017

From the technology and services sales angle, which is what IBC is all about, there is now clearly a pitched battle underway. Content, contribution, channels, platforms and apps all compete and complexify the value chain.  Who is playing end-to-end? [everyone!?] and who knows their sweet spot? [fewer]. Speculative and aggressive licensing of content has entered the fray upstream, whilst maturing media services and SaaS surge forwards downstream. All overlapping trying to gain your attention and do the business.

Increasingly, though, I think that whoever or however we choose to play our media, by perfecting analytics and insight, new revenue will get easier to identify and exploit.