Digital Transformation & the M&E Industry
The Media & Entertainment (M&E) industry is undergoing a sea change currently. New entrants are challenging traditional players, new markets are becoming easily accessible for distribution, and new technology is enabling consumption and revenue opportunities like never before. Velocity and scale are being redefined. Shrinking revenues from traditional sources, and increased spends in newer OTT / digital avenues are creating unprecedented pressure on broadcasters to lower their Broadcast Operations and Engineering (BO&E) budgets. M&E enterprises therefore need to reinvent the way they work, embracing digital transformation, not only to survive but also succeed in the Digital Next era.
The move to virtualization will enhance the role of traditional IT service providers, driving them to gain a deeper understanding of the M&E industry.
Integrated workflows can and should be followed at every stage – right from content creation… Click To Tweet
There is a lot of speculation about what the next-generation media technology stack will look like. We believe it will cry out for more virtualization across the supply chain, across departments and geographies. This is the only way enterprises can achieve more agility and faster time-to-market along with lower TCO. Whether it is in the context of linear broadcast, digital or syndication, the approach of the future will increasingly be to keep content at the center of the business.
The future will also see the level of customization that is offered by M&E service providers go up. Media enterprises have always needed unique workflows and consequently sought customized technology solutions. When it comes to customized ad sales and scheduling systems, today’s industry CFOs, are increasingly realizing the pain that accompanies product upgrades. In this context, a greater adoption of SaaS is being witnessed, which offers upgrades as well as a higher degree of standardization at an economical cost.
While Cloud technology is re-writing M&E workflows through the content lifecycle, M&E service providers are remaining confused if they should view the Cloud as a friend or foe. Cloud computing services like AWS make a compelling claim – “if you don’t like your infrastructure, just delete it and orchestrate a new one that afternoon, without having to own a building full of equipment for a seven-year depreciation cycle”. We believe that as long as we can continue to shift towards software and higher degrees of automation, the Cloud is not an adversary. In fact, it provides an excellent opportunity to get a better wallet share. This is why PFT has announced an interesting proposition called Optimizer for AWS. This feature, newly added to PFT’s Media ERP Suite, CLEAR™, particularly benefits clients who already have AWS accounts.
Offering original technology solutions is the key to a sustainable future from a service provider’s perspective, as today, customers can also choose to directly access the Cloud or CDNs. As a service provider, PFT offers more than just classical efficiency. As PFT continues to innovate, clients will embrace these innovations to solve for speed, cost, quality and most pertinently, new revenues.
Earlier, service providers offering specialized technology services for M&E would follow a box-moving sales approach, wherein the customer had to align their workflows and business processes to fit the vendor’s solution. This is now shifting towards a far more customized approach, wherein a vendor tailors a specialized solution to address a customer’s needs. At PFT, we encourage customers to measure the success of a solution on the basis of overall outcomes, rather than worrying about the methods / inputs used to trigger these outcomes.
Today, large amounts are being invested in online video platforms, and related technologies. But while OTT players are increasingly relying on technology for all aspects of their operation, generating sustained levels of profitability remains a challenge, as this is still an evolving space. We believe that for a share of standardization, there will be an equal share of disruption from service providers in new technology coming about in driving better experience and engagement; driving unique visitors who will be coming back for the experience/content and watching for longer.
The linear television vs. OTT debate also leaves many M&E players concerned if they also will face a conflict when it comes to service providers. Several broadcasters have already started using separate play-out architectures for linear and digital. For instance, HBO has its own play-out for linear, but uses MLBAM for OTT. In our view there is far greater scope for convergence rather than conflict, as business goals of both segments remain the same – be it achieving faster time-to-market, reducing costs or boosting monetization. If traditional service providers were able to provide what MLBAM could, there would be no need for HBO to orchestrate a play-out split in the first place.
Cost-effectiveness actually makes the integration of workflows for linear and digital segments inevitable. Integrated workflows can and should be followed at every stage – right from content creation to global distribution. For instance, content should undergo QC once, and metadata should be created considering both linear and non-linear business requirements. Leveraging shared services makes economic sense while delivering to linear and OTT platforms, and many broadcasters are already doing this in the context of the Cloud and CDNs. Their concern is whether the size of revenue will match the corresponding technology spend, as the percentage of revenue spent on technology for digital delivery tends to be higher than that spent on traditional TV play-out and delivery.
Given the current trend of moving content towards general purpose platforms, many enterprises are also anxious if they will be able to match the expectations of a viewer who is accustomed to linear TV. But they needn’t fret too much, as premium CDN providers like Akamai are already able to match the unicast/multicast delivery experience that linear television delivers.
People often ask us how PFT has helped content enterprises cut their operational costs by as much as 30%, and gain 40% more efficiencies. Such results have primarily been achieved by deploying CLEAR™, our Media ERP solution which virtualizes the supply chain, automates workflows and eliminates the use of multiple, disparate systems across departments and geographies. Virtualization brings content to the center of the business, driving creative enablement, enhancing efficiencies, reducing costs and boosting monetization.
According to the recent Big Broadcast Survey by Devoncroft, more than 40% of M&E vendors claim to have products that operate in a fully virtualized environment. However, it is important to understand whether this ‘virtualization’ refers to virtualized IT infrastructure or virtualization of the content supply chain – wherein stakeholders, content providers and downstream partners all operate using ONE software in a truly virtualized world. This is the transformation PFT is trying to help bring about for M&E enterprises. PFT also allows clients to leverage its global delivery model and enjoy service provider aggregation benefits. All these factors go a long way in reducing the Total Cost of Ownership (TCO) for an organization.
We remain committed to making this journey of transformation seamless for organizations, while advancing the technological capabilities of the M&E industry to meet the demands of consumers globally.
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