As competitive pressures from new media escalate, broadcasters and content owners are experimenting with new business models, writes Lorenzo Zanni.
The reason for this experimentation is to find ways to better face some of the industry’s most important challenges. Three of these challenges can be summed up as becoming a media factory, the importance of cyber-proofing and a requirement to integrate the best technology.
With stretched budgets and shortened timescales, the workings of media companies are starting to resemble those of a factory, where efficiency and speed are paramount.
As broadcast infrastructures have come to increasingly rely on generic IT technology, cyber security has become a top priority in most media organisations’ technology purchasing strategy.
Media companies still want to cherry-pick the best technologies to suit their custom workflows. However, 98% of them also want interoperability, requiring suppliers to adopt an open approach to product interoperability.
Some of the new business models that are being deployed to address these challenges are:
Streamline the Content Supply-Chain to achieve more efficiency and speed, media companies are moving to a supply-chain approach for handling media content. This is associated with the rise of emerging technologies such as AI and the cloud.
AI brings more automation of routine workflows as well as predictive capabilities. With regards to automation, data from the US Bureau of Labor Statistics shows that in the next eight years, routine jobs are going to be those to suffer the most from this transition to AI. The cloud brings more speed and flexibility through on-demand provisioning of resources. In mature supply-chains, operations are tracked in real-time so that every investment (in content and technology) is constantly evaluated for its return
Build-it-Yourself to solve the interoperability conundrum, media companies are also developing more technology solutions internally.
According to IABM data, the average percentage of technology solutions built in house by end-users has increased to 37%. Most end-users also plan to increase their software development investment in the next twelve months.
The rise of microservices, a method of developing software as a suite of separate, independent services, is associated with this trend too. In fact, one possible use case of microservices is gluing together separate technology solutions to improve workflows. For example, ITV is doing this to achieve greater interoperability of operations. Microservices are also the right tools for transitioning to a media factory as they guarantee more resilience, scale and speed of operations
Buy to Build Media companies are also increasingly investing in technology suppliers to internalise technologies that are strategic to their businesses. Two important investment areas are the next-generation advertising and OTT segments.
In the OTT segment, media companies have acquired OTT technology providers to support the launch of their direct-to-consumer offerings. Examples of this trend include the acquisitions of BAMTech by Disney and of NeuLion by Endeavor.
In the advertising segment, programmatic ad technology suppliers such as SpotX and FreeWheel have been acquired by media companies (RTL and Comcast respectively) to build in-house capabilities for programmatic ad sales.
Collaborate Media companies are not only getting closer to their customers through direct-to-consumer offerings, but also to their suppliers - through partnerships. In fact, we are moving away from transactions to partnerships, with a stronger focus on the long-term value of the relationship between the supplier and the end-user.
This is also mirrored by the rise of services – to the detriment of products – in the industry as shown by data from the IABM DC GMVR.
New projects increasingly feature collaborations between end-users and suppliers (see, for example, Discovery/SDVI) where both develop technology solutions, leveraging their respective strengths. End-users are not only collaborating with suppliers, but also with other end-users and third parties.
Recent initiatives to pool advertising data together show that end-users may find it beneficial to collaborate on this. An example of this is the Comcast Insights Platform, which was announced by Comcast last year and joined by other broadcasters such as Disney, to leverage blockchain for ad sales.
On security, there’s always been a disincentive to share information given the sensitive nature of cyber-attacks. Initiatives to increase collaboration on this topic are key to better dealing with the cyber threat. Recent examples of this include governments’ initiatives such as the National Cyber Security Centre, which was launched by the UK government in 2016
The industry is changing radically, with technology being at the centre of media businesses’ strategies going forward. Helping them address these challenges through the right business models is key.