NEW YORK—On any given day, I encounter some version of truly remarkable statistics about the rise of video on-demand as a percentage of the total amount of viewing. At the recent NextTV Summit ,Jay Samit of Seachange proclaimed that 50 percent of all U.S. viewing is now on-demand.
Perhaps more sobering and relevant to broadcasters is this from Needham: revenue paid to U.S. TV content companies per person per hour is $0.30 by the linear TV ecosystem, $0.11 by Netflix globally, $0.03 by YouTube.
These numbers are important when we consider the increasing price content producers are paying to support other platforms. The companies producing content for these multiple viewing streams face a growing challenge in the form of operational costs.
What I found most compelling was subsequent discussion at NextTV that swirled around the fact that the effort of meeting the vast number of permutations needed to support on-demand was absorbing a rapidly increasing amount of the finite resources of production departments. For someone who worries about budgets and workflows, this is something worth digging into, especially when on-demand revenue remains starkly lower than linear. It suggests imbalance between resource expenditure and return.
ADAPTING TO ON-DEMAND OFFERINGS
This is a tricky thing. There is a lot of pressure to expand on-demand offerings. I believe the solution to maintaining balance is not so much a technology challenge, but rather a need to be more prepared to operate the content business with a nonlinear mindset. Take one example; I recently watched as an experience team at a well established TV broadcast company struggled with closed captioning. Closed captioning! This is something that had been essentially solved for decades.
Why did they struggle? It was not for lack of technology, lack of intelligence, or lack of skill. The simple truth is that their recent-vintage workflows were founded in the not at all distant past on linear principles of live production. The workflow for closed captions in linear does not readily translate to a nonlinear production model. Edit a linear file and your CC no longer matches.
The challenge is that the team is being asked to deliver the same show, intact and with all its features, from within a linear workflow but packaged for on-demand viewing. The solutions for serving the nonlinear demand had been grafted on to that linear base. Their people have not generally dealt with both. Live has been linear and post-produced shows have been nonlinear.
Not everyone will encounter this particular issue. Some vendors have built a feature into recent versions of their edit products that solve this issue, although it is by no means commonplace. Many, if not most, broadcasters will at some point encounter a problem of this type at some point in the near future.
The issue is not one of technology. What is missing is operational leadership. Producers, control room crews, editors, talent, and engineers are really good at doing the same routine everyday, but less effective at managing change. Nor is it reasonable to expect them to. What’s needed is someone with the vision to aggregate all the requirements—both today’s and tomorrow’s—and then put operational processes in-place to support them. Content producers need to be more productive with the resources they have in order for the balance sheet to make sense.
Businesses thrive on predictability. Therefore they fail to designate or hire operational management. This deficiency significantly impacts the ability for the company to respond to change and anticipate new requirements in a shifting landscape.
When you build a business expecting things to pretty much be the same each day, you don’t feel compelled to pay for a “change management” specialist.
But that’s the catch. In this new environment, businesses should be looking to make change all the time. The drain on production resources caused by the need to support a shifting landscape of delivery formats reflects a need for greater operational efficiency and productivity. All those formats are an expensive proposition, but with some organization and pre-planning, processes can be consolidated so that supporting new flavors doesn’t have to mean more work.The opportunity to change is ever-present if a business is willing to look for it. New markets, smoother operations, enhanced productivity are the keys to maintaining and growing today’s media business. You simply cannot get there without change-agents pushing for those benefits.
Managing this change and maximizing productivity requires someone with a foot in both the steady linear and shifting nonlinear domains. Whether you call it an operational manager or a change manager, hire the person to your staff or retain an outside expert, having someone keeping an eye on your production balance will be essential to maintaining your bottom line balance.