IP technology to enable TV revenue growth

TV today is much more than a linear playlist of programs played out sequentially and interspersed with commercials, promos and PSAs.

The dawn of the Internet, DVRs and VOD, TV websites, over-the-top content delivery, social media and mobile phones has changed all of that forever.

Today, the demands on broadcasters are far more complicated — and opportunity-rich. Broadcasters must now connect with audiences on a much more personal basis, when and where an individual viewer wants, with the help of the Internet and mobile devices like smartphones and tablets.

But this is only the beginning. Massive industry changes are afoot that will make the relationship between broadcaster and viewer far more intimate and lucrative, generating multiple billions in additional annual revenue.

Exploiting these opportunities, however, will require new workflows and supporting technology because cashing in on the future means delivering a level of content customization that will be nearly impossible to support with baseband video workflows.

Already viewers regularly seek out bite-sized pieces of content from TV websites. This has demanded big changes in newsroom workflow and created strains on already lean staff. Today, it’s common for newscasts to be recorded and assigned to an editor, who cuts them into discrete stories to be distributed on digital and social media platforms.

These types of workflow accommodations will multiply dramatically in an ATSC 3.0 future in which viewers have still greater control over the content they consume — so much so that they can create their own customized shows filled with the types of stories and other content they specify.

Rather than simply cutting newscasts into 10 or 15 stories, broadcasters will face the prospect of satisfying the individual content appetites of thousands or even millions of viewers. That will seem as foreign to most one-to-many-oriented broadcasters today as those days when there was nothing other than linear television. Yet, that’s exactly what TV broadcasters will be called upon to do.

“It’s going to be a different world five years from now,” says Del Parks, SVP and CTO at Sinclair Broadcast Group.

Enabling that sort of viewer customization, however, will mean broadcasters need even tighter control over rights management — what viewers can play and where they can and can’t play it.  It will also mean broadcasters must increase their dependency on metadata and find a way to manage program content to satisfy individual desires and deliver highly targeted commercials based on the preferences and demographics of individual audience members.

 “IP is critical for that,” Parks says. “In distribution and conforming, I think the way we are looking at it is almost like a CDN [content delivery network]. It becomes very digital-like, and because it does and because it is all IP — ATSC 3.0 is an IP delivery system — it becomes very Internet-like.”

At the 2016 NAB Show in April, demos of a future ATSC 3.0 living room made it clear how CDN-like television distribution is likely to take shape in the not-too-distant future. For instance, a display by Samsung in the ATSC 3.0 Consumer Experience pavilion showed how the ATSC 3.0 television set itself can cache shows, news stories and commercials to be assembled to suit individual viewer tastes and in essence act as an edge server in a next-generation television CDN.

“You can’t do any of that without IP. That is the simple fact,” says Parks.

IP isn’t simply the technology that will enable ATSC 3.0, it is the enabler for any broadcaster looking to present viewers with customized content and retrieve information about their preferences and habits.

“I think being able to know who is using your content is a key thing for us — just being able to make sure the content we produce, especially on the news side, is being used,” says Matthew Holcombe, VP, Turner Production Broadcast Engineering.

“Metadata control all of that in an IP environment. It is a huge benefit,” he says.

Steve Fastook, SVP of Technical and Commercial Operations, at CNBC, agrees. “We have seen just an off-the-charts increase in the relevancy of metadata,” he says.

Metadata makes it possible for the financial news network to populate a story quickly with complementary info tidbits that give viewers a more complete understanding of what’s happening.

“I may have an asset and my team is putting in related stocks. That asset might be a story about a corporate merger and the new merged company may have 10 or 15 related stocks or stocks that compete,” he says. “All of that stuff gets baked into the metadata.”

The same flexibility in the production of a news story enabled by metadata in an IP environment will make it possible for viewers to customize their own channels.

“I like CNBC,” says Parks, “So I could say, ‘I want to follow this sector and this sector,’ and I could almost create my own version of CNBC. The only way you are going to be able to do that is IP. You could never do that in baseband.”

There are strong economic reasons to offer future TV viewers this level of customization and in the process make it easier to target them with customized ads. A study conducted by FTI Consulting and presented in November 2015 at the NAB New York show found that the targeted TV advertising aspect of ATSC 3.0 would generate between $2 billion and $4.58 billion per year in new revenue.

“Sticking with my CNBC model,” says Parks, “if I signed up for the CNBC version of ATSC 3.0, I might say, “Here are the sectors I am in — in my case it might be these five companies in media. I have just profiled myself for CNBC.”  

With that information, not only could the financial channel target Parks with advertising but also demand higher rates from advertisers, he says. “So the cost per thousand — and it’s not cost per point — for my set of eyeballs is that much higher for CNBC because they are targeting me and have pre-qualified me.”

These sorts of digital opportunities will help Turner to profit in the long term with its over-the-top strategy as well, says Holcombe.

“There are lots of opportunities on the digital side. News is a great example. We deliver a lot through the website. We’ve got the CNNGo app. You can authenticate, watch and customize,” he says.

With over-the-top delivery of content, whether it’s news or Turner Classic Movies or Boomerang, similar sorts of viewer customization and ad targeting become possible, says Holcombe.

“I echo what Del [Parks] said. [We will] be able to sell directly to our customers. We get a lot of data back and learn a lot about our customers through direct contact with them,” says Holcombe. “That’s a very valuable thing for us in the long term.” 

This story is part 2 in a series, Tech Leaders on the IP Transition, sponsored by Grass Valley, a Belden brand. Read part 1, a Q&A in which Sinclair’s Parks, Turner’s Holcombe and CNBC’s Fastook talk about their companies’ transition to IP,  here.