The big 5 trends from IBC 2018

Written by Paul Whybrow

Part 2 of a three-part series based on the International Broadcast Conference (IBC) 2018

Part 1 – My 5 C’s of change for broadcast

Part 3- Entering the broadcast future zone

Every year the broadcast media technology industry gets together in Amsterdam to share the latest and greatest in technology for the audio and visual creative industries. Over multiple massive halls at the RAI exhibition in southern Amsterdam, it is all there. From the latest lighting, microphones and cameras right through the whole creative and production chain of studio equipment, production workflows content management systems, playout for audiences and all the tech to deliver to radios, TVs, mobiles and any other screens.

This year I spent five very happy days wandering the many exhibition halls, catching up with fellow broadcast veterans and having my eyes open for understanding the pulse of the industry across the globe and in particular in Europe and the UK. I supplemented this with a great kick off conference run by the market research and strategic consultancy Devoncroft.

After the conference, conversations and observations, I came away with the overall sense that many in the industry are fully embracing the change they are going through. Certainly, it is hard to find almost anyone who can confidently say who will be the winners and losers in the broadcast space or which industry suppliers are adapting rapidly enough to really succeed in the coming years. Compared to last year, I do see an optimism and a confidence that the new OTT competitors are realising just how media is complex is. The decades of experience, creativity and process that delivers consistent entertainment to huge audiences does count for a lot, in the audience-focussed experience all players need to create.

It seems that collectively, the industry is accepting things will never be the same again and embracing how to use their skills to win on the OTT and mobile turf. It is blending the diversity of content and access with the continuity that producers and broadcasters can be trusted to do this well, if they shift their thinking, culture and capabilities so they become the consumer hero again, like they have been for many decades.

With this context, here are my five insights I gained from the event.

Why low interest is powering Netflix

• It is really clear how much Netflix is investing in original programming to drive new subscribers and entertain loyal watchers.
• One conference speaker took a really interesting angle on why Netflix was able to do this, and it was simply based on the access to cheap money they have. It is on public record that other organisations may borrow at rates like 8.5%. Netflix was able to obtain $1.3 billion at a very low rate of 3.65% over 10 years.
• This access to cheap finance he argued is being used to drive a cycle of success. Heavy content investment is more affordable. If a good number of the shows reach critical and viewer success which in turn drives growing market value, which finally drives the ability to borrow more at lower rates.
• In theory, this cycle of advantage can continue even if there are not the short-term profits.

 How Internet TV is not yet fully sustainable

• The insight here is that, despite the ever-increasing viewer love of mobile and internet TV services, the economic reality is that the revenues earned are still not yet at the volume to replace current TV ones.
• There is no doubt that audiences are growing rapidly, however given the marginal costs required to service each new viewer, strong profitability is still hard to achieve. As a result, the contribution profits of OTT services are actually still relatively small given the audience sizes.
• Manchester United TV was given as an example, where MUTV is operating in 42 countries, there are 659 million followers with 153 million social connections. This huge scale currently is only driving a relatively small revenue given the sort of income from traditional avenues such as shirt sponsorship.
• Until these OTT revenues can be fully realised then if traditional TV revenues continue to fall, there will be a continuing big squeeze on profits for broadcasters.

Why IP, cloud and blockchain are this year’s buzz words

• Every event has words and themes that appear in many places in the exhibition halls and in conference sessions.
• Being a bit technical here, the shift of broadcasters to IP connectivity rather than the traditional SDI, seems to be in full swing and there were plenty of providers wanting to help businesses take the shift.
• The shift to virtual and cloud services seemed to be on almost every second stand., As in other industries, media can really take advantage of the shift away from on premises storage to the access anywhere options. The sheer volume of data created by video certainly is a challenge, along with the media need to access programs for broadcast or on demand, multiple times in a content life cycle.
• Blockchain is now emerging as a good solution concept for many areas of advertising and content control where there is complexity and transparency is key.

Why owner building is heading out of fashion

• In the past many media companies have developed their own bespoke versions of many operational and development solutions.
• The culture of build and then run has often dominated simply because each network sees themselves as having many unique needs that require plenty of customisations. This certainly is shifting and so was a big discussion point at
• The tougher development economics combined with the shift to more IT led solutions, is enabling both service models (with no capex) and off the shelf flexible products to gain acceptance with broadcasters. 

How unlocking skills and culture blending is the key

• Until recently the accepted norm was that broadcast engineers were the dominant technology leaders in the industry. IT skills were important however always secondary.
• The shift to digital, online apps and OTT delivery created a new need for IT skills to deliver these technology operations.
• Now we are at a crossroads. To succeed there needs to be a blend of skills and culture, both IT and broadcast engineering. Both individually can’t lead the broadcaster of the future, however as a mix they have the media technology skills to flourish in the new media world.

How this is achieved isn’t easy both in people and process, however it is clear when you talk to media tech

John Voris as the CTO of Disney Studios has the dream technology job that a lot of people could love, powering the tech for such brands as Marvel and Pixar. His team has built a StudioLAB right in the centre of the studio lot, so that producers, creators and staff have a very visible and physical presence for technology innovation so that they can see, as he put it, where the ‘magic comes to life’. This includes a 35ft square living room set up to showcase and spark collaboration on the future living room experience. I visited Sky in London which has done a similar thing with a core innovation and product showcase by the entrance of their new HQ Sky centre in London.

John’s perspective is that in the broadcast and media space ‘technology only exists if it supports storytelling’. For me this means the full broadcast and media story telling chain of story creation(production and creative process),  story sharing(content management, distribution across all platforms, media management, commercial and funding models) and story connecting(the audience experience and emotional benefit ).

Seeing the passion and presence at IBC I would suggest storytelling technology is certainly healthy and thriving.

 Paul Whybrowis the Managing Director and Creative Collaborator for Bodyboard Immersive Experiences. A boutique business with access to award winning creative, broadcast and immersive experience skills and consulting. Our purpose is to be the creative connector for imagining the possibilities and crafting the practical, so you can share passionate storytelling. 

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