IBC 2017 WRAP

IBC 2017: Signs Of A Quickening IP Transition

The media and entertainment industry, which now ranks as the most disrupted in the world according to the Global Center for Business Transition, more fully embraced IP and virtualized technology at the annual international tech exhibition in Amsterdam this week. Imagine's Charlie Vogt (above) says his company is investing "hundreds of millions" to keep pace.

The television industry took long steps on the march toward IP and virtualization of media technology this week as tech vendors and senior TV executives from across the world gathered for the International Broadcasting Convention in Amsterdam. 

High winds, cancelled flights, rain and colder temperatures than are typical for this annual confab set the stage for a meeting marked by tension over media industry consolidation, widespread audience and revenue disruption and how advancements in technology might ease the strain.

Charlie Vogt, CEO of Imagine Communications, set the tone with a press conference in which he sought to reassure customers – as well as his own employees – that Imagine, now four years into private equity ownership, is not only not for sale but is plowing profits into R&D and doubling down on investment with a goal of scaling up through acquisitions.

“Consolidation among customers is putting pressure on manufacturers,” he said. “Clients don’t want to spend money on the old technology. This show is about assuring them that what we have is real.”

“Imagine enjoyed double digit EBITDA margins in 2016 and is estimated to do the same this year,” Vogt said, and the company is “spending $80 million to $90 million annually on R&D.”

“We convinced our investors that we needed to do that,” he said.

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Vogt also predicted Imagine would bulk up by acquiring other manufacturers and service providers, saying after the press conference that investors had agreed to investing “hundreds of millions” in this effort.

He also anticipates that in the next two years, revenue from the sale of IP solutions will outstrip that from hardware sales. The company today has 18 IP installations in the works, adding up to a in a $1.1 billion revenue pipeline. 

Vogt wasn’t the only CEO characterizing IBC 2017 as a turning point for his company. Louis Hernandez, chairman and CEO of Avid, said his company has completed the transformation it embarked on four years ago when it announced its Avid Everywhere strategy.

Avid announced in April that it had virtualized all of its solutions and now offered them in the cloud. “We spent half a billion transforming our products and reimagined the way to operate a media organization,” Hernandez said.

Along the way, the company received commitments to its MediaCentral platform from NBCU, Sinclair, Al Jazeera and Meredith, Hernandez said.

At Grass Valley, CEO Marco Lopez extolled the importance of an industry standard, predicting what the Society of Motion Picture and Broadcast Engineers would ratify only a few days later when it gave final approval to its 2110 IP standard. “A standard is what the industry needs to move to the next level,” Lopez said, adding that all Grass Valley solutions are being updated with IP connectivity. 

The broadcast manufacturing industry’s quickening march to software also became apparent at Ross Video, where

CEO David Ross told reporters that, although he hasn’t talked much about IP solutions in the past, his company is in the process of virtualizing its products.

Ross unveiled Inception Cloud, a virtualized version of its newsroom computer platform. It resides in the AWS Elemental cloud, Ross said, “so you can sign up now and have a newsroom appear virtualized with no hardware at all required.”  

Ross, whose IP rollouts result in part from the company’s acquisition of software provider Coveloz Technologies last year, also teamed with Cisco to present a Newsroom in a Box demo at IBC. It featured IP versions of several Ross solutions including its Overdrive automation, Xpression Graphics and Inception NRCS.

As has Avid, ChyronHego has virtualized all of its solutions, which can now run on common-off-the-shelf-hardware (COTS) and the Cisco server stack, or on Chyron’s own VPX virtual server. “We are no longer hardware dependent,” said Jesper Gawell, chief marketing officer.

Even smaller manufacturers are getting into the virtualization game. Bob McAlpine, CEO of Cobalt Digital, said he has brought on a PhD in electrical engineering to lead transition of the company’s solutions to virtualized versions. “By NAB 2018, we’ll be showing off our own integrated IP solutions in several product lines.”

Ditto at Multidyne, where Frank Jachetta, president, predicted the company’s signal transport gear would be converted to IP in time for NAB 2018.

Broadcast manufacturing’s move to software – and the efficiencies it can bring to content production and distribution — appears to have come none too soon. Citing research from the Global Center for Business Transformation, Hernandez said that the media and entertainment sector “now ranks as the most disrupted industry on the planet.”

Even as manufacturers ramp up and what appears to be a clearly faster pace, questions remain about how to finalize the bandwidth intensive television industry’s transition to IP.

“We’re almost there,” explained Geoff Stedman, SVP products and solutions at storage provider Quantum, discussing the industry’s slow but steady embrace of internet protocol.

The IT industry is based on a standard known as “good enough,” Stedman explained. Data centers process and transport information that can arrive largely intact but which won’t be harmed if a packet or two get dropped along the way, because the dropped packets can be quickly resent with no harm done.

Video, on the other hand, must achieve a far higher standard of excellence if it is to avoid dead air, artifacts or worse, missed commercials. Stedman said.

Exactly right, said Del Parks, CTO of Sinclair Broadcast Group, who has begun testing virtualized playout at a few of the company’s stations.

“The IT world needs to be accurate 99.9999% of the time, Parks said. “In TV, we need to be accurate 99.99999999% of the time and the difference between each of those point-9s can add up to millions in revenue.” 

The bottom line in all this for broadcasters, be they network groups or OTA stations, isn’t yet clear. Services may cost just as much or even more as media companies move from investing in hardware to paying monthly software license fees. The efficiencies to be achieved however, could be substantial in terms of the number of channels that can be distributed at lower cost and rapid deployment of new applications.

The implications for live TV productions will likely show up first in sports, where network operations centers are springing up to replace some of the tasks traditionally done on site in OB vans.

Joop Janssen, CEO of Aperi, a cloud native provider of software-defined low-latency media processing, sees cost savings that could be head-turning. “We are talking about a reduction of 50% [if measured against paying on a] software as a service basis,” he said, “and 70% [if measured against investing] in hardware solutions.”

The bottom line in all this for broadcasters, be they network groups or OTA stations, isn’t yet clear. Services may cost just as much or even more as media companies move from investing in hardware to paying monthly software license fees. The efficiencies to be achieved however, could be substantial in terms of the number of channels that can be distributed at lower cost and rapid deployment of new applications.

The implications for live TV productions will likely show up first in sports, where network operations centers are springing up to replace some of the tasks traditionally done on site in OB vans.

Joop Janssen, CEO of  Aperi, a cloud native provider of software defined low latency media processing, sees cost savings that could be head-turning. “We are talking about a reduction of 50% [if measured against paying on a] software as a service basis,” he said, “and 70% [if measured against investing] in hardware solutions.”

 

 

 

 

 

 

 

 

 

 

 

 


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