Published in Broadcast Magazine with Commentary from Tom Ohanian
As media consumption fragments, broadcasters are faced with the hard task of predicting which platforms will be most successful. David Wood looks at the future of content delivery
June 20, 2008 - 
Crystal-ball gazing on the future of content delivery invariably leads to one subject cropping up more than any other: multiplatform distribution. It's top of the list of priorities for people who are grappling with the new technical challenges that face the world of TV production and is giving established broadcast channels their most pressing problem. The headache for broadcasters is how to deal with the dwindling audiences in a multiplatform world where they are increasingly having to battle it out with emerging platforms such as PC-based media players, the iPod and games consoles such as Nintendo Wii and Xbox.
The best strategy for arresting this declining share of eyeballs is to get a foot-hold on the new platforms. It's a familiar subject for Jon Folland, commercial director of outsourcing specialist Nativ, who is currently working with a range of broadcasters, including MTV, Channel 4 and the BBC's iPlayer, ensuring they can deliver video content to any consumer device. "Broadcasters are in a vulnerable situation and it is they who have the most to lose," insists Folland. "The problem is that, as a distribution mechanism, broadcasting is becoming less relevant."
How much less relevant depends on who you talk to. "Linear channels have got at least another 10 years to run," says Ascent Media managing director of content distribution Roger Henderson. "It's still the basis for most broadcasters' business models and it's important not to forget that."
Others, including Gideon Summerfield, who runs indie Pioneer's online content business, argue that, "in a decade's time, 60% of viewing is likely to be on linear channels with 40% on other platforms".
Whatever proportion of our viewing will be made up by linear channels in 10 years' time, few disagree with Folland's assertion that, while there will still be a place for linear media, it will be smaller.
Outsourcing
Another trend which will continue is the outsourcing of playout - this is good news for the big playout companies, such as Ascent Media, Arqiva and Red Bee.
Says John Bozza, director of sales at Arqiva's Satellite Media Solutions division: "What will change in the future is the frequency with which new platforms appear. There will be a decrease in the time between major technology refreshes. If you are a broadcaster, you don't want to run an R&D team keeping up with all this change when you can outsource it."
Folland confirms: "When you have no idea from year to year what the big distribution platform will be, broadcasters won't want to invest up front in distribution." He points out that the playout business is changing as fast as the move towards multiplatform, with established players and newcomers launching services targeted at answering the needs of multiplatform distribution.
In April, Ascent launched Global Media Exchange (GMX), billed as a one-stop digital rights management platform designed to monetize content assets locked away in archives, while Nativ has Mio, billed as the industry's first fully managed service to enable broadcasters, brand owners and advertisers to distribute content across any platform; from IPTV to traditional broadcast, wireless and mobile.
Folland insists that IP-based delivery is the future. "It'll only take a year or two before playout becomes commoditized and less profitable. Nativ sees itself as the next step from the playout companies."
The IT-centric world
Another huge industry trend is that while media consumption is fragmenting in terms of platforms, the industry as a whole is converging - as seen in the move towards IT-based production systems. "We can predict a world of IT-centricity in the broadcast space - it'll be a world of IT networking, storage and server mechanisms tied together with media applications," says Tom O'Hanian, vice-president of product management at digital media management company Signiant.
With the growth of tapeless production and digital-file workflows, broadcasting is becoming an extension of the IT industry, with a new set of IT issues. Regardless of whether you are a traditional broadcaster, or a new player in the market, distributing content across new platforms will be about digital-file management, rights management, storage, transcoding, repurposing and bandwidth issues.
David Maynard, Virgin Media TV and UKTV chief engineer and head of broadcast technology, points out the advantages of digital workflows and IT-based media: "Accessing media and searching for specific clips becomes quicker and easier, freeing up time to reinvest in creativity. Content can be repurposed more easily, while activities can be coordinated to manipulate content for multiple purposes - broadcast, VoD, DVD or mobile - in one session. And improved metadata improves cataloguing."
But this means a huge increase in the complexity of IT-based broadcasting systems, warn O'Hanian: "Suddenly the content has to be available in a lot of places in different formats, fast. Already, a dizzying array of business models is a reality."
According to O'Hanian, last year, NBC Universal, one of Signiant's biggest media customers, moved more than 25 million files - 200TB of data - and automated 400 workflows. "Another had 20 distribution partners in 2007, but by the end of 2008, expects to have 200, all of which need multiple-format encoding and transcoding, specific delivery requirements, digital rights management (DRM) and asset tracking." As he stresses, the key is less about predicting what will happen next in content delivery, but being able to quickly adapt to what happens next: "We don't know what workflows there will be tomorrow, but the most successful players will be the most reactive."
Snell & Wilcox's vice-president of marketing, Joe Zaller, explains that the new multiplatform world of broadcasting has a new commercial logic. "As the number of formats for content goes up, the potential revenue goes down, but the time and cost to create it don't change." As a consequence, there will be a demand for IT-based workflows that can repurpose content quickly and cheaply. "That's what everybody is trying to achieve in production," says Zaller.
In an IT-centric world, one issue which crops up with more frequency is interoperability - or rather the lack of it. Adds Zaller: "In a tapeless world, one of the key things that a lot of people are struggling with is interoperability of different systems." As the industry becomes more IT-dependent and complex, consultancies with an expertise in tying together all the software components in the new content value chain will be in demand, which is why Snell & Wilcox has set up a company to provide multiplatform solutions.
Arqiva also has an R&D team looking at the long-term goals of its current clients, which is already designing solutions ready for future needs. Says Arqiva's John Bozza: "If you wander around IBC, you could be forgiven for thinking that you can buy software and hardware off the shelf from IT manufacturers, plug it together and you don't need support. But my advice is, don't believe what the software and hardware manufacturers say, because our experience is the opposite."
HD and 3D
Another clear trend across the industry is the drive for increased quality in linear channels. The best example is the growth in HD. With Sky offering 18 HD channels, and Freesat and, in time, Freeview offering free-to-air scheduled HD content channels, there's no doubt that HD broadcasting is set for growth. It's a trend that will continue, with the next generation of HD already in the pipeline. "The next big increase in HD quality will be the 3GB/second uncompressed data-rate, which will give us 1080p - the next generation of HD", explains Zaller, who reveals that Snell & Wilcox and a number of other manufacturers are designing infrastructure to make products 3GB-compatible.
3D is another innovation - currently big news in cinemas thanks to the success of the Walt Disney 3D movie Hannah Montana and Miley Cyrus: Best of Both Worlds Concert, which made $31m at the US box office in its opening weekend in less than 1,000 cinemas. "There are something like 18 moves in production in 3D right now," says Zaller. "When you have 1080p-capable TV sets, you can have 3D in the home. Samsung says all its TVs will be capable," he adds, but warns that the success of 3D will depend on the quality of the content.
Looking ahead, Dermot Nolan, consultant and former general director of the Digital Television Group, the UK's industry association for digital TV, tips IPTV to be a key distribution technology in the long term. "It's been a success in France, where 4 million people get their channels by IPTV. Once you have a proper high-capacity broadband fiber system, it becomes very, very attractive," he says. But with ADSL2 capable of delivering 12MB to the home, that's just not enough for multiple HD channels, he adds, pointing to US cable networks such as Verizon providing 100MB fiber to the home as the entertainment distribution platform of the future.
The big untapped distribution opportunity of the future remains a mass-appeal way of distributing TV via the internet to the big screen in the living room. That really frees things up, according to Zaller: "It means you are no longer limited to the services of your service provider."
Hand in hand with the distribution of content via the internet goes the issue of digital rights management. The common assumption is that digital file-based distribution is inherently more prone to piracy, although this is not necessarily the case. As O'Hanian points out, one notorious recent instance involved the movie American Gangster being pirated from a physical copy two weeks before its release date. "Digital copies are much safer," he insists. Maynard adds: "Tape-based systems have always been vulnerable to unauthorized duplication. With file-based systems you can more reliably track and audit material transfers and better prevent unauthorized access."
But that hasn't stopped clients insisting on an array of sophisticated rights management software, which in some ways only serves to hold back cross-platform development. Folland explains: "With DRM there is still a slight misunderstanding. Even now, rights holders expect guarantees from distributors that content won't be exploited, but DRM will never deliver that. There's never been an encrypted set-top box that hasn't been cracked, and the same goes for DRM. It's not about stopping people nicking content. Most people won't be inclined to steal content if the price is right and they get a good viewer experience. Ultimately, DRM can just be a way of lowering the chance that people will see your content."