Channel-In-A-Box Market Is Hot, Crowded

Grass Valley’s announcement yesterday that it had acquired Netherlands-based PubliTronic instantly gives the broadcast tech vendor a well-developed, IT-based playout system to sell.

Welcome to the club.

IT-based playout, or channel-in-a-box, is the hottest technology around these days. Propelled by broadcasters’ insatiable need for more efficiency, several leading companies are offering the virtual master control technology and more appear to be on the way.

Grass Valley is entering a market with four major players — Miranda, Florical, Evertz and Snell. And powerhouse broadcast vendors Harris and Harmonics are hinting strongly that they may join the fray by the time the NAB Show rolls around next year.

“The revolution has started,” says Jonathan Goldstein, president of the Snell Group in the U.S. “Broadcasters of all sizes — from the station level to the network level — have begun to consider very seriously the channel-in-a-box concept because it is proving to be reliable and because the long-term benefits are so great. Some broadcasters may think that the technology is not mature enough, but that could be because they haven’t looked at it lately.”

Channel-in-a-box nicely describes the technology. Essentially, it’s the collapsing of the many pieces of traditional hardware that make up the master control and playout chain — including switchers, servers, graphics, channel branding, audio and routing — into a single integrated software application that runs on generic IT-based hardware.

The concept is attractive to some broadcasters mainly because it costs less — much less — than traditional hardware-based master control. It also reduces the number of staffers in television playout, reduces the capital expenditure on equipment and lowers the cost of maintenance.

The origins of the technology go back a few years to Europe and Asia. There, television operations are simpler and thus easier to automate, yet economic pressures are just as great as in the U.S. Many small equipment vendors created systems for the market. Now, the idea at least, has taken off in America.

Last winter, Miranda’s iTX and Florical’s Acuitas automated playout systems dominated the U.S. market. Since then, Snell has come on strong, thanks in large part to development work it has done with Encompass Digital Media in Atlanta and its contract to provide centralized master control services for the NBC O&Os.

A major benefit of Snell’s ICE solution, says Snell CEO Simon Derry, is that it is modular and scalable, able to generate a single channel or scores of them. A single channel can cost less than $100,000, but per-channel price goes down as the number of channels increases, he says. Though ICE runs on a standard Windows platform, Snell does add an I/O board with additional processing to better meet broadcast standards.

“When you get ICE, it comes with the operational interface from day one,” Derry says. “You can configure it to your use. We have designed the software architecture to pretty much mimic the way equipment now works. There’s a virtual router in ICE. Adding and changing different functionality over time is very simple.”

Miranda sees Snell as its most serious competitor. “Their advantage is they can drop their ICE system into traditional environments where they already have Morpheus [automation],” says Boromy Ung, market segment manager for playout at Miranda. “To be fair, I’d say Snell and we are about equal right now. We have pretty much the same functionality.”

But the Miranda iTX system has at least one significant advantage, he claims. “There are two parts: the real-time playout itself and the backend,” he says. “How do you check and review your content, trim the content or change the metadata? All that has to happen ahead of air time. We see the next opportunity of cost savings with these features in the backend. We streamline the backend workflow. We’re already better on the backend than Snell.”

According to Ung, Miranda has been most successful so far selling iTX to large multichannel operators like HBO, Discovery, Turner and Starz Entertainment. The system is most popular with “pre-baked” channels, in which much of the content is determined in advance, he says.

On the station front, Ung says that Fox has acquired some systems for deployment across its station group, but he doesn’t know Fox’s deployment plans.

Ung says that rival Florical was “a bit late to the party” with Acuitas and “it wasn’t really ready when it launched three years ago. They are now trying to make inroads with a few strategic accounts, but we think their installed base is limited right now.”

Shawn Maynard, VP and general manager at Florical, dismisses Ung’s characterization of his company’s market position. It now has three small station groups successfully using Acuitas, but is under a nondisclosure agreement not to reveal their names, he says. “One of our clients has five stations, one has 10 stations and another has 15 stations.”

Acuitas’ great advantage is that it is totally software-based and runs on generic IT hardware. “Generic hardware is the future,” he says. “Any time you add proprietary hardware, you’ve locked yourself in. To add new features, you’ll have to tell the broadcaster they’ll need to upgrade the hardware. You just don’t want to do that. It’s a horrible mistake when you go down that road.”

Maynard says he is not overly concerned about the entry into the market of big companies like Grass Valley, Harris and Harmonics. “These are hardware companies. They get these big dollars in their eyes. This is where they are going to fail. You have to think about the world differently. You have to realize that you won’t get the margins you used to. We need to be in the day and age where we sell software solutions.”

Evertz is another major player in the market, with its Mediator and Overture systems. “The process of properly handling asset preparation, quality control and media asset management in workflows is a very important element that I don’t think a lot of people do very well,” says Dan Turow, director of product development at Evertz.

A main differentiator of Evertz’s product is it runs on Linux hardware, not Windows, Turow says. “There is no Bill Gates involved. You don’t want a Windows infrastructure running your broadcast plant because it is susceptible to things that are nasty. You can get the ‘blue screen of death.’ The Linux-based platform is not susceptible to that kind of stuff.”

Evertz tweaked the Linux standard platform for better broadcast performance. “We found that in certain critical spots — mostly around I/O — that standard IT technology is not good enough. We add some stuff to the hardware to make it broadcast 7/24 capable. It helps us reduce total cost when you look at the complete system.”

Another established channel-in-a-box vendor is Playbox Technology, with commercial headquarters in England and an R&D center in Bulgaria. The company has opened an office in New York. However, CEO Vassil Lefterov did not respond to requests for comment for this article.

Grass Valley bought PubliTronic because it sees where the market is heading, says Ray Baldock, VP, strategic alliances and partnerships. Broadcasters and multichannel programmers “have a whole different business model and that often doesn’t sustain the traditional approach to automation and master control.

“They’re looking for a much more integrated approach, an approach generally from one vendor that is simpler to install, simpler to operate, simpler to monitor and maintain. We are positioned in the playout market and we want to establish and build that reputation as the industry transitions.”

Grass Valley opted to buy the technology rather than develop it in-house because of the importance of graphics, Baldock says. “PubliTronic had already developed a very, very rich solution to being able to provide 3D graphics, being able to connect them with data sources, being able to build complex models fed from video sources coming off the server or live data sources like scoring systems or TV guides or other metadata.”

PubliTronic’s channel-in-a-box solution is Nexus, but Grass Valley is rebranding it as K2 Edge and giving it a place in its K2 server family.

Harris and Harmonic may not enter the already crowded market, but it sounds as if they will.

Andy Warman, senior product marketing manager for servers, editing and graphics at Harris, listed several core competencies that are needed to offer IT-based playout — traffic and billing, asset management, traffic branding, automation, graphics, master control and video servers. Harris, he said, has deep expertise in all of those areas while most other vendors doing channel-in-a-box systems do not.

“The current products are focused more on vendor competencies and less so on the overall workflow,” he said. “We are focused today more on product integration. Harris doesn’t see the channel-in-a-box necessarily as the final solution. There’s a lot more to this than meets the eye.”

Although he wouldn’t say what Harris will announce, he says “by next NAB, you’ll see an interesting evolution.”

Harmonic, which makes Omneon servers, also looks at the phenomenon with some skepticism. “The term channel-in-a-box is a pretty loose and fast term,” says Tom Lattie, VP of product management. “I think this movement is about customers trying to rationalize both their capital and operational expenses and simplify their operational workflows.

“Today, many vendors have tackled that by putting as many things as possible into an IT box. That accomplishes a couple of things. It moves to more IT-centric technology that lowers their costs a bit and the software adds some flexibility.

“At the end of the day, they have fewer boxes in the chain. From the Harmonic perspective, however, what that does is paint you into multiple corners. We think the customer has to make more compromises than maybe they want to.”

In any event, Harmonic is focused on collapsing the baseband chain, he says. “When you look at that chain of equipment, how can you move more of those devices into the media server? With our new MediaDeck 7000, many things were collapsed into the server. We’ll show more of that entering next year. We think there’s a gain focusing on that, but not precluding a customer from picking a vendor for automation that they may want.

“We showed customers at IBC how they could do more function collapse than we do today. We’ll continue that trend.”

Even if Harris and Harmonics remain on the sideline, the channel-in-a-box market will be highly competitive, especially now that Grass Valley has jumped into it. And all believe there will be more developments between now and the NAB convention next April.

Snell’s Derry sees Grass Valley’s entry as an endorsement of the technology and as a benefit to broadcasters and other potential users. “It signals that this is a growing market,” he says. “And competition is healthy for the customer base.”