Broadcast Business Management in a Multiplatform Era. A Pilat Media White Paper

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1 Broadcast Business Management in a Multiplatform Era A Pilat Media White Paper

2 Contents I. Introduction 3 II. The Challenges of Scaling to Multiplatform Operations 4 Broadcasting the Oscars : A Use Case 4 III. Meeting the New Demands of Multiplatform Programming 6 Centralizing rights management 5 Redefining scheduling 6 IV. Extending Sales and Traffic for Multiplatform Services 8 The sales product: complete flexibility for inventory combinations 8 Virtual inventory replication: audience addressability in campaigns 10 V. Business Analytics: Understanding Asset P&L 11 VI. Centralizing Business Workflows 12 VII. Conclusion 13 2

3 I. Introduction Perhaps no market trend is having more impact on media companies than the drive to deliver video content on a broad array of non-linear platforms. Today s consumers are demanding their programs on more devices, and with a greater degree of scheduling flexibility, than ever before. Resulting offerings such as video on demand (VOD), time-shift TV, catch-up TV, TV everywhere, and Internet TV are re-writing the rules for broadcast business management. Today broadcasters must find new ways to engage their audiences and attract advertisers across multiple media outlets that span multiple viewing screens in and out of the home. They must also demonstrate their ability to reach not only mass audiences but highly targeted and relevant ones. The IT systems that make such media operations possible are increasingly complex as service adoption expands and content libraries grow. Broadcasters are therefore challenged to achieve a level of integration that will yield maximum revenue potential across all outlets, provide the needed business agility to compete and adapt to a changing landscape, and keep operational costs under control. Broadcasters are challenged to achieve a level of integration that will yield maximum revenue potential across all outlets... In this paper, we will describe an innovative model for a broadcast business management system that addresses the challenges of multiplatform operations. 3

4 II. The Challenges of Scaling to Multiplatform Operations Introducing multiplatform services into a broadcast operation that has been traditionally focused on linear broadcasting is a complex proposition. Many media companies approach this opportunity by creating new divisions to address the delivery of emerging services, each with its own infrastructure, internal business processes, and success metrics. With such a siloed operation, the company has no easy means of measuring across-the-board business performance and efficiently ensuring regulatory compliance, while redundant processes and resources drive up operational costs and create more operational delays. All of this is taking place at a time when competitive and economic pressures have never been greater, forcing companies to operate as efficiently as possible with minimal staff. Broadcasting the Oscars : A Use Case To bring home the challenges of multiplatform operations, consider the hypothetical scenario of a major network that has secured the rights to broadcast all programming for the Academy Awards (Oscars ). The network s programming lineup includes pre-ceremony features, the Red Carpet program and awards ceremony, and after-show features such as red carpet/ fashion summaries and coverage of parties. Figure 1 shows the entire programming grid, with a breakdown of programs that will be delivered over multiple linear channels as well as the network s website, VOD service, and mobile service. With such a siloed operation, the company has no easy means of measuring across-the-board business performance and efficiently ensuring regulatory compliance, while redundant processes and resources drive up operational costs and create more operational delays. Weeks Prior Day of Broadcast Following Days Multi-Channel Expert Winners Predictions Oscar Fashion Review Countdown to the Academy Awards Red Carpet Oscars Ceremony Repeat: Oscars Ceremony The Best After Show Parties Red Carpet Fashion Summary Website Expert Winners Predictions Clips: Last Year s Best Moments Photo Gallery: Last Year s Ceremony Clips: Nominated Movie Trailers Clips: Best-of Speeches Photo Gallery Clips: Best-of Red Carpet VOD Package: Best Movies of the Millenium Package: Best Movies of the Millenium Package : Best Movies of the Millenium Catch-up: Oscars Ceremony Catch up: Red Carpet Catch up: The Best After Show Parties Catch up: Red Carpet Fashion Summary Mobile Voting Competition Clips: Last Year s Best Moments Photo Gallery: Last Year s Ceremony Clips: Best-of Speeches Photo Gallery Figure 1 A Sample Multiplatform Programming Grid for the Oscars 4

5 In such a complex live programming scenario, any number of unforeseen events might wreak havoc on a siloed broadcasting organization, creating ripple effects that can disrupt the entire broadcast and affect revenues. Suppose, for instance, that the Oscars ceremony broadcast runs late (not a far-fetched notion!) so late that it overruns its programming slot and causes the network s pre-planned highlights show to be pushed to a later hour. If the show is delayed by too much, the network might be in danger of reneging on advertising contracts that specified its airing at a certain time, in order to reach a particular demographic. Likewise, a segment for the website on the Best of the Red Carpet cannot be posted until later and so forth; thus delivery of content to all platforms is affected by the single programming delay. Suppose the network discovers that it has failed to obtain the clip rights for a particular movie actor who was interviewed for the Red Carpet show or a public figure who appeared in the feature on after-show parties as an attendee. Maybe the rights only apply to the initial airing of the show and not repeat airings or maybe they only apply to the linear broadcast and not the other platforms. Or, perhaps an actress describes her dress made by a certain designer in the Red Carpet show that is sponsored by another designer a direct violation of the sponsorship agreement. Time is of the essence in order for the network to adapt to these scheduling, rights, and sponsorship changes in ways that won t significantly affect revenues. Yet, in a standalone, siloed operation, each of the changes and their metadata must be input multiple times into different scheduling systems and then synchronized, resulting in costly delays, inefficiencies, and potential for error. In a worst case scenario, the network might be forced to pull some programming altogether resulting in broken commitments to advertisers, loss of revenues, and money wasted on program acquisition or production costs. And in the end, once all of the programs have aired, the network has no effective means of comparing total costs to revenue in order to gauge overall return on investment (ROI) and guide business decisions for next year s broadcast....any number of unforeseen events might wreak havoc on a siloed broadcasting organization, creating ripple effects that can disrupt the entire broadcast and affect revenues. 5

6 III. Meeting the New Demands of Multiplatform Programming Centralizing rights management Rights management becomes significantly more complex in a multiplatform environment requiring a fine balance between revenue maximization and compliance with contractual and regulatory obligations. As shown in Figure 2, to be effective a centralized rights management platform should provide services for managing the complete asset lifecycle from production and acquisition through distribution of content, with tools for contract and deal management, program finance, and distribution licensing. With these tools, media companies can record consumption, usage, and distribution rights for any type of content -- from movies and television series to footage and clips plus associated assets. Likewise, the system provides a central point for querying rights availability against any type of acquired, or produced content, allowing a broadcaster to fully exploit all licensed or owned rights on any platform, either by broadcasting that content or by licensing it to third parties. As content distributors become more aware of the revenue potential for their programming to be played out on multiple services, they are negotiating contracts that are many degrees more complicated compounding the difficulty of rights management across multiple platforms. Returning to our Oscars example, the network might have negotiated one price for the main ceremony to be broadcast over the linear service, and another price for the catch-up broadcast on the VOD service. Centralized rights management places the broadcaster in control of contract negotiations, with the ability to quickly evaluate which package of rights for a program will be the most cost-effective and yield maximum profits. Flexible condition processing becomes an essential component of a business system in supporting this complex environment. Rules, exclusions and workflows can easily be created in the business system to process and enforce these conditions. The system can adapt to the ever changing nature of these contracts without the need for additional development or system redesign. Centralized rights management places the broadcaster in control of contract negotiations, with the ability to quickly evaluate which package of rights for a program will be the most costeffective and yield maximum profits. Using the previous example, the broadcaster can weigh the cost of airing the Oscars on a linear channel against its advertising revenue potential, and then balance the higher costs of the rights to play the show to the Web site against its potential to attract an even wider audience. The system enables broadcasters to select and manage cost amortization rules for each platform in order to accurately reflect the cost distribution of acquired assets against the full breadth of supported services. Contractual Finally, centralized and regulatory rights management is enabling compelling new opportunities Rights compliant for content rights multiplatform services Acquisitions Commissions Productions Licenses Programs Trailers Footage Stills Graphics Music System APIs Centralized Rights Management System Media Asset Management Scheduling Enterprise Resource Planning Broadcast On-Demand Web Mobile Retail Rights aware programming systems Figure 2 Centralized Rights Management Services 6

7 multiplatform broadcasters to monetize content and services in ways that were not possible in the traditional broadcast environment. With centralized rights management, the broadcaster can fine-tune sub-licensing agreements to extend beyond program distribution and cover individual components such as audio translations; e.g. a program that has been translated into Chinese can be licensed to every Chinese broadcaster that chooses to purchase it. As always, the system tracks content rights and warns of violations, such as whether the program has been licensed exclusively to a broadcaster in Hong Kong and therefore can t be sold to another Hong Kong customer. Redefining scheduling By definition, the deployment of content across a broad range of linear and non-linear platform services requires new thinking about scheduling. Whereas broadcasters were previously only concerned with programs, times, and channels when dealing with multiple linear schedules, they must now also consider placement of content on VOD services -- which adds considerations such as platforms, availability windows, asset packaging and delivery, content discovery, and offer management to the scheduling mix. With a robust and integrated broadcast management system that provides a central metadata repository and a set of scheduling tools for each service, a broadcaster can dramatically enhance the consistency and efficiency of its multiplatform programming. The expertise of its existing scheduling team can be leveraged to extend operations to non-linear services. Users can explore various scheduling scenarios, track schedule costs, and manage content inventory utilization across the entire multi-channel and on-demand operation, from a single centralized scheduling function. Referring back to the programming grid in Figure 2, the broadcast management system provides a comprehensive view into the entire programming strategy prior to, during, and after the Oscars ceremony broadcast, enabling the broadcaster to maintain program consistencies and synergies between all platform services. The system s schedule awareness tracks when and where a program was originally scheduled and alerts the scheduler when the content has been moved to a different slot, giving the scheduler ample opportunity to make sure the promotions for the original airing have been removed and replaced with new content. Users can explore various scheduling scenarios, track schedule costs, and manage content inventory utilization across the entire multichannel and on-demand operation, from a single centralized scheduling function. When VOD and other non-linear services are added to the mix, they add new layers of scheduling complexity. To truly add value, a business management system should be able to handle scheduling functions that are unique to VOD, such as asset packaging. In this instance, the broadcaster has the opportunity to package a series of titles together for example, a package of movies featuring the Best Actress nominees for the Oscars making them available as a single, searchable offer. The system should enable easy scheduling for content discovery; i.e. scheduling a promotion for another movie that will be available the following month for a viewer that is watching a certain title. Also, the system should provide scheduling tools for offer management, enabling the scheduler to make a specific title available in as many program classifications and packages as possible. For instance, a single VOD movie is made available on multiple menus such as New Releases, Classics, Children s Titles, Genre (e.g. Fantasy) - and can be offered individually and/or as part of a Best Movies from the Director bundle. The broadcast management system should take into account changes that take place in the linear service and how they might impact the non-linear side, for instance, catch-up broadcasts on VOD. For a live event such as the Oscars, rights purchased for the linear event might be separate from the rights for the VOD catch-up. The broadcast management system automates the rules dictating the time window for the non-linear schedule as a function of the linear schedule; e.g. the catch-up of the Oscars Red Carpet show can only be made available for five hours after the completion of the live show and only for a period of three days. The system keeps both schedules synchronized in the event of a change in the live event. 7

8 IV. Extending Sales and Traffic for Multiplatform Services The sales product: complete flexibility for inventory combinations To accommodate multiplatform operations, broadcasters need an inventory management system that is capable of handling a wide variety of inventory types. Whereas inventory management has traditionally meant dealing with a broad variety of 30-second spot derivatives, media companies are now selling inventory across linear channels, VOD, the Internet, cinema, other out of home outlets, and print media and they need to be able to combine these for the maximum benefit of their advertisers or agency customers. As shown in Figure 3, robust broadcast management systems provide this flexibility by creating inventory collections called sales products that reflect the characteristics of each platform and media type. Rates and viewing predictions are applied and aggregated to sales products which can be sold consistently with a common aggregated view for measurement and unified billing. Sales Product Integration Layer Robust broadcast management systems create inventory collections called sales products that reflect the characteristics of each platform and media type in an integrated campaign. Network TV VOD Service Web Service M T W T F S S Week 1 Week 2 Week 3 Week 4 Oscar Countdown Fashion review Live Ceremony Fashion Summary Repeat Ceremony Best Picture 2009 Catch-up: The Oscars Catch-up: Red Carpet Ratings, Spots Downloads, Viewings Impressions, Clicks Ad Inventory Variety Programming Ad Inventory Grouping Figure 3 Sales Product Inventory Collections Figure 4 describes a sample ad campaign that might be built around our fictitious network s programming grid for the Oscars. Within the sales product layer of the business management system, the traffic manager is able to define not only the type of ads for each service (e.g. commercial spots for linear as well as pre- and post-rolls for VOD, website banners, and in-stream ads on mobile devices), but also metrics for determining audience reach targets (e.g. 6.5 rating target for linear, five million clicks on the website, or 10,000 downloads on the VOD or mobile services). 8

9 Use Case: Advertiser Specific Campaign * Audience targets 25 rating points for people on linear 350,000 clicks on website 50,000 VOD downloads 200,000 mobile downloads * Exclusivity terms Exclusive sponsorship on ceremony billboards Shared sponsorship on repeat events * Multiplatform promotions 40 tagged linear promotions Website banners and skyscrapers Product placement in Best of commissioned events * Commercial spots 20 Bookends 150 linear spots 10 Squeeze back promo spots Pre and post-roll on VOD service In-Stream spots on website video clips Opening and closing billboards Figure 4 - A Sample Advertiser-Specific Oscars Campaign In a nutshell, the sales product concept is a mechanism that focuses on the sales opportunity for one or more blocks of programming regardless of how it will be scheduled. With linear television, for instance, the network can sell the live Red Carpet show, Oscar ceremony, and fashion summary shows as a sales product, with a guarantee that the audience will be delivered for each spot the advertiser buys. The system offers the flexibility for the broadcaster to apply a different pricing structure based on an estimate of the audience for each show. In many ways, the sales product is even more effective for VOD than for linear television, due to the differences in methods for estimating audiences. For instance, the broadcaster can sell the aforementioned Best Actress-featured movie package on the VOD schedule, with rates applied based on estimates of how many viewers will watch each title in each time period. Unlike linear TV, which bases audience estimates on statistical group samples provided by research systems like Nielsen, a VOD offering can be forecast much more precisely based on actual numbers of viewers who have downloaded a particular title in the past. The inventory management system should provide the flexibility for broadcasters to offer combined campaigns that distribute programming across different platforms with different rates based on audience, spot rates or other metrics - but all managed within a single campaign with the convenience of a single invoice to the advertising customer. Also, the system should provide the flexibility to overlay secondary events in the schedule, such as sponsorships, product placements, and logos, together with spots. 9

10 Virtual inventory replication: audience addressability in campaigns Media companies are looking to further maximize inventory value by augmenting massmarket campaigns with personalized advertising that connects with specific audiences. Business management systems should enable sales and traffic departments to offer advanced, addressable targeting packages as options for both linear and non-linear services, with modeling tools for optimizing projected revenues based on targeting inventory allocation choices. As shown in Figure 5, virtual inventory replication offers an evolutionary path to campaign addressability in linear advertising. It enables sales departments to create an unlimited number of virtual replicates of the inventory and associate each copy to specific audience targets. Through proper integration with the ad delivery infrastructure in service provider networks, the virtual channel is played for its targeted audience. This approach offers complete control to the sales and traffic department to turn targeting on and off and to offer advanced packages while keeping focus on wastage and revenue performance. For non-linear services, both virtual inventory replication and just in time ad placement decisions would be advantageous. In fact, the demographic information that can be obtained from the set-top boxes of IPTV subscribers or viewers who download on-demand services enables extremely precise targeting. For instance, with an IPTV service, household data linked to the STB might indicate that the subscriber travels internationally, making the viewer a good candidate for an airline ad promoting discounts for international travel (of course, it goes without saying that the system would need to provide strong controls to ensure that the data is collected anonymously to protect viewers privacy). A single campaign for a specific auto manufacturer might contain ads for minivans targeted to families with children, with different ads for sportier models targeting young adults. Thus, the same ad space can be sold multiple times depending on the number of niche markets to be targeted. As with linear advertising, the system provides tools for modeling different combinations of personalized vs. mass market advertising to ensure maximum revenue potential, i.e. how many times a particular campaign can be virtualized and still enable it to be profitable. Since non-linear programming by definition is watched at the viewer s discretion as opposed to broadcast at a specific time, the business management system can also determine whether time-sensitive ads will be appropriate for different services; e.g. whether the airline s discount offer has an expiration date. A single campaign for a specific auto manufacturer might contain ads for minivans targeted to families with children, with different ads for sportier models targeting young adults... the same ad space can be sold multiple times... Default Men Frequent Travellers Women Program part Ad-1 Men Ad-1 Household Ad-1 Women Ad-2 Household Program part Program part Ad-1 Men 24-39, Frequent Travellers Ad-2 Men 24-39, Frequent Travellers Ad-1 Household Ad-3 Men 24-39, Frequent Travellers Program part Program part Ad-1 Women Ad-2 Women Ad-1 Household Ad-3 Women Program part Figure 5 Virtual Inventory Replication 10

11 V. Business Analytics: Understanding Asset P&L Centralized tools for business analytics are critical in a multiplatform broadcasting enterprise, offering the ability to measure business performance of each service, as well as the performance of various assets across all the platforms on which they are delivered. Only business systems that understand the language of each platform and offer a centralized repository for the metadata of all assets can provide effective business analytics. Multiplatform reporting and analysis tools offer the broadcaster powerful means of tracking costs against revenues to determine the profitability of a program or set of programs, feeding valuable metrics into the next program planning round. Going back to the Oscars example, the network can determine how to allocate all live and pre-recorded programs among the linear channels, Web streaming, and VOD services in accordance with the rights that were originally purchased. In addition to acquisition, the network must factor in any additional items that contribute to the overall cost of the asset for instance, addition of closed captions, down-converting HD content for an SD service, or the production and transcoding costs of re-formatting the material for multiple Web sites or for producing a synopsis for the VOD service. These costs are all balanced against total revenue potential including ad sales and any sub-licensing agreements to determine what combination of delivery mechanisms will yield the most profit. Furthermore, the broadcaster will have a record of the program s performance that will help make informed decisions about future Oscar broadcasts, for instance, how well the postceremony commissioned programs performed in a Spanish-language market and whether the performance justified the cost of generating Spanish subtitles. Only business systems that understand the language of each platform and offer a centralized repository for the metadata of all assets can provide effective business analytics. In addition to financial analysis, multiplatform broadcasters need tools for measuring performance against a set of specific targets, also known as key performance indicators (KPIs). These include factors such as the percent of content required to have closed captions, the percent that is required to be broadcast in high definition, or requirements for programs to have subtitles when broadcast on international channels. Business analytics tools should indicate how well all programming meets KPIs across all platforms and territories, and also measure such non-monetary factors as production time to deliver content to a Web site, affecting operational efficiency. 11

12 VI. Centralizing Business Workflows Whereas unified rights management, scheduling, sales and traffic management, and business analytics set the stage for a smooth transition to multiplatform operations, the glue that will hold everything together is an integrated and centralized mechanism for coordinating workflow. Such a system will create new levels of efficiency by facilitating a smooth exchange of information between departments, precisely synchronizing their activities while optimizing the allocation of resources (e.g. ad inventory, content rights). Define Package Prepare and Transcode Media Plan Promo Campaign Across all Platforms Establish Rights Sell Package (Sponsorship) Negotiate Rights Clearances if Necessary Distribute Media Produce Promotions Schedule Package TV Schedule Web Offers Mobile Clips Book Campaigns Schedule Promos TV, Web, Mobile Schedule Campaigns TV Spots Web Spots Mobile Spots Release Schedules Reconcile and Bill Centralized business workflow management will create new levels of efficiency by facilitating a smooth exchange of information between departments, precisely synchronizing their activities while optimizing the allocation of resources. Sell Package (Multi Platform Campaigns) Media Programming Advertising Figure 6 Integrating Workflows in a Multiplatform Operation Figure 6 illustrates how a broadcast management system might integrate all phases of a multiplatform programming and advertising campaign s development from initial definition through to final reconciliation and billing, taking into account every aspect of the workflow including sales, media preparation, rights negotiations, and scheduling. Managing change is one area in which centralized workflow adds great value. Take the example of the Oscars, scheduled for live broadcast on the linear service and then scheduled for later catch-up on VOD. If the linear program runs over its allotted time slot, the system will automatically notify the scheduler on the VOD service that a change has occurred. A centralized workflow engine can communicate the impact of schedule changes, media failures (e.g. content that fails a QC check), or contract approvals. At any stage in the process, anyone in the operation can access the system to determine the rights of the program for a given platform, when the program has been scheduled by platform, and the content s status in the workflow (e.g. whether it has passed through ingest, transcoding and quality control steps and is ready for transmission). In the event of a content failure for a program due to go out tomorrow on the linear service and the next day on the VOD service, the workflow can immediately notify the schedulers of the issue so that they can re-arrange the schedule. Centralized workflow can also play an important role in maximizing revenue for a piece of content. For instance, based on the rights profile for a new acquisition, the system can automatically trigger an indication to the content sales department that the distribution rights allow opportunities for sublicensing, DVD sales, or other means of monetizing the content. 12

13 VII. Conclusion As media companies re-engineer their operations to pursue new opportunities springing from the growth of broader-casting and TV everywhere, they are recognizing the importance of cross-platform management systems that can grow and shift with changing business requirements. An integrated approach to broadcast business management unites processes and departments, which have traditionally been disconnected, by driving them from a single database and workflow engine. This unified, centralized strategy enables today s media enterprise to manage traditional media services such as multi-channel linear TV alongside new media offerings, without disrupting the company s tried-and-true business processes and maximize profits from emerging audience behavior patterns. In addition, effective broadcast business management optimizes multiplatform programming through centralized rights management, with scheduling tools that span all linear and nonlinear services. It enables flexible multiplatform campaign combinations and the integration of audience profile targeting. It offers powerful business analytics tools to measure program performance across all platform services. And finally, an integrated approach can create new levels of efficiency by centralizing business workflows across the entire media operation, in tight coordination with the business planning processes. With these tools in place, the business management system delivers results that are truly transformational turning a broadcast organization into a nimble, integrated operation that can not only adapt to unexpected programming changes, but also easily evolve its business model to keep pace with emerging media trends and opportunities. This unified, centralized strategy enables today s media enterprise to manage traditional media services such as multi-channel linear TV alongside new media offerings, without disrupting the company s triedand-true business processes and maximize profits from emerging audience behavior patterns. NOTE: OSCARS and ACADEMY AWARDS are trademarks and service marks of the Academy of Motion Picture Arts and Sciences and are used here only for general reference. All other trademarks are the properties of their respective owners Pilat Media. All rights reserved. 13

14 About Pilat Media Pilat Media Global plc [AIM: PGB] develops, markets, and supports business management software solutions for content and service providers in the media industry. Designed with the direct involvement of top-tier broadcasters, Pilat Media s systems improve business performance, accelerate time to market, and enable diversification and growth of content programming, advertising sales, traffic, and media operations for multiplatform linear and on-demand services. More than 50 blue-chip media companies around the world use Pilat Media solutions, including CBS, FOX, CTV, Virgin Media, Discovery, SABC, Chellomedia, the BBC, Media General, Sky Italia, ESPN Star Sports, Network Ten, TVNZ, Southern Cross, and Foxtel. These and other deployments represent the management of billions of dollars in advertising revenue and programming that reaches hundreds of millions of viewers.

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