Shared services offers opportunity to trim $100 million in expenses annually for U.S. broadcasters, report finds
Television broadcasters in the United States are spending in excess of $100 million more annually than necessary in the areas of news production, graphics, weather and master control by failing to leverage shared services models, according to a recently released report from Positive Flux.
The report, “The HD Transition,” finds that shared services models would enable broadcasters to eliminate redundant processes, pool resources, streamline operational workflows and create foundations for future multiplatform operations.
Positive Flux, which surveyed senior engineering management at more than 350 U.S. TV stations of all sizes, including station groups, O&Os and independent stations for the report, found that only a small percentage of stations is taking advantage of shared services to manage production and distribution costs.
“Broadcasters, cable programmers, Internet video producers and others have been slow to embrace shared services, citing concerns about loss of control, lack of quality or the complexity of transitioning as factors,” said Larry Thaler, Positive Flux president. “The reality is that today’s hostile economic environment presents an opportunity to find game-changing solutions. We are seeing clear signs that companies that have embraced even limited shared services opportunities are in a better position to weather the changing environment.”
The study provides a comprehensive, up-to-date view of the state of systems architecture and operational methods employed at network affiliates.
Key findings include:
• A 10-percent expansion of centralized graphics as a shared service would reduce the cost to the U.S. station industry by $35 million annually, while at the same time improving on-air quality.
• A total of 30 percent of U.S. stations are not yet sharing news clips to improve their storytelling capacity by bringing in stories from outside their markets.
• Only 22 percent of U.S. stations are sharing images and animations, enabling personnel to focus on branding and revenue building opportunities instead of creating news graphics that are available elsewhere within their own group or through cloud-based services.
• Almost 90 percent of stations have adopted nonlinear editing, but few have established unified workflows among desks, departments or affiliates. As a result, each new delivery platform will multiply CAPEX and OPEX that otherwise could be managed by eliminating the duplication of efforts involved in delivering to multiple platforms.
"Broadcasters are facing some tough decisions,” Thaler said, “much brought about by their reliance on old models and processes.
Positive Flux specializes in transforming media companies to address new opportunities. The company has made a complete executive summary of the report available online.