If not now, when?
S07E09: Game of Streams (If not now, when?)
Our Media Solution Specialist, Magnus Svensson, is sharing his reflections on the online streaming industry in this post. This is part of a monthly series so make sure to follow us here if you do not want to miss an episode.
In the business of television production and distribution, the need to adapt to modern workflows has never been more critical. The traditional methods that for long been successful are about to become obsolete because of the technological advancements driven by the internet and by the shifting consumer demands. To survive in this landscape, companies must embrace change and incorporate modern workflows into their operations.
But even so, this does not happen to the extent one might think. Most media companies struggle to adapt to new technology due to a combination of ingrained processes, resistance to change, and a lack of digital expertise. Failing to adapt to modern workflows will not only risk falling behind their traditional competitors but the complete business will also be lost to the tech giants. Amazon, Google, and Apple harness the power of modern IP technology to drive innovation, enhance user experiences, and expand their influence and dominance in the media business. Their ability to adapt and leverage these technologies plays a pivotal role in their continued growth and market leadership.
Traditional broadcasters and TV distributors hold tight to their legacy system and business mode, fail to adapt towards more efficient workflows and fight each other more than fighting the real threat.
The revival of aggregation
Netflix, Disney, and other global services have long been reluctant to aggregation. And consumers have enjoyed the freedom to explore services at a rapid pace. But when the industry shifts towards profitability over subscriber growth, prices are raised and the cost for the consumers increases. The increased prices and the fragmented market have led to a revival of aggregation.
One of the examples is the latest deal between Disney and Charter. Charter was threatening to abandon TV, but in the deal, Charter got the rights to offer some of Disney’s ad-supported streaming offerings, Disney+ and ESPN+ to its customers. This deal kicks the can a bit down the road for the traditional TV distribution and provides a transition to a different bundle.
The telcos and the current linear TV distributors would be very suited to claim the spot as the aggregator. But this would mean that the companies need to adapt to modern workflows and make their TV distribution cost-efficient. The tech giants such as Google and Apple already aggregate content and apps in a very efficient way.
Cost efficiency
Making technical workflows cost-efficient is not just a matter of saving money, it’s of paramount importance for media companies. Cost efficiency impacts competitiveness, profitability, and sustainability. It ensures that resources are used wisely, enabling businesses to thrive and remain relevant in the new business environment.
Depending on the size of the company and the number of subscribers, outsourcing the complete tech stack might be the best option. Unless you have the size to scale, building a video distribution pipeline is expensive. Very few companies have the scale to motivate a bespoke solution and in-house development.
In-house-built video pipelines should be assessed to see how each part of the workflow can be optimized for cost. Assess current licenses and contracts, look at open-source alternatives, and replace old technologies with more efficient ways of doing things. One clear example is linear channel creation and playout.
Another area to revisit would be the balance between on-prem and cloud, and how to reduce cloud cost and reduce dependencies towards cloud vendors that also are your biggest competitor. Very few have need a multi-cloud setup, but many would benefit from a cloud-independent approach that would allow for flexibility to select the environment that is better suited, both from cost and competitiveness.
As Socrates stated, “The secret of change is to focus all your energy not on fighting the old but on building the new”.
To watch out for the coming months…
Making the production and distribution of television as cost-efficient as possible from a technical point of view is just one part of the puzzle. The cost to acquire the rights to content will also need to adapt to a new economy. The cost-cutting exercises that are happening at most media companies will influence the possibility of bidding for the attractive sports content. So, most sports and leagues will need to adapt to a market with less income from TV rights. Or find new business models between the rights holder and the media companies.
Magnus Svensson is a Media Solution Specialist and partner at Eyevinn Technology. Eyevinn Technology is the leading independent consulting company specializing in video technology and media distribution.
Follow me on Twitter (@svensson00) and LinkedIn for regular updates and news.
