Navigating Technological Disruption in Broadcasting

1. THE IMPACT OF NEW TECHNOLOGIES Philip Laven Director, Technical Department European Broadcasting Union EBU HR Plenary, Geneva 16 June 2005

2. INTRODUCTION • Technology is changing very rapidly • Broadcasters must cope with major changes which will affect: • delivery to consumers • production of content • How will the new technologies change: • strategic direction of broadcasters? • requirements for staff? • organisational structures?

3. PREDICTING THE FUTURE • This advertisement for a flat-panel TV and“electronic-shopping” appeared in the British magazine “Lilliput” in October 1945 • It is OK to predict “what” • But never try to predict “when”

4. EVOLUTION OF TV HDTV WidescreenTV Hand-held device

5. or DIVERGENCE? CONVERGENCE “Internet” services Broadcasters Internet Broadcast delivery

6. BYTE February 1996

7. WIRED December 1998

8. CONVERGENCE OF HARDWARE ? • Viewing conditions are very different • TVs are viewed from a considerable distance • typically 6 - 10 times picture height • computer users are much closer to the screen • typically less than 2 times picture height • TVs are often viewed by several people, whereas computer usage is a solitary activity • TVs are unsuited to interactivity, but computers will be used to display TV programmes

9. CONVERGENCE OF INDUSTRIES • Will there be convergence between broadcasting and telecommunications? • It is important to understand the differences between the delivery systems • Basic difference: • broadcasting = one-to-many • telecoms = one-to-one • But broadcast delivery systems can also be used for one-to-one services • Telecoms operators have recently discovered the benefits of one-to-many services (broadcasting)

10. ECONOMICS OF TELECOMS • Telecoms operators are in the business of delivery systems • But delivery systems are becoming commodity services – with many competing solutions • Consumers are not interested in delivery systems, but they want “attractive” content • Telecoms systems need attractive content • Today’s hope is that consumers will pay €1.50 for 30 seconds of video replays of football or cricket • Is TV the killer application for third-generation mobile phones?

11. CONTRACTING OUT • “Contracting out” some support services (e.g. catering, cleaning, building maintenance) has been very successful in many EBU Members • costs have been reduced • service levels have been maintained • Can this concept be extended to “core” services? • instead of producing all of their own content, many EBU Members commission independent producers to make some programmes • they also use commercial facilities, such as production houses and outside broadcasts

12. BROADCASTING VALUE CHAIN Contentcreation Programmescheduling • In the past, many broadcasters controlled every aspect of the production chain: • from microphone and camera • to transmitting antenna • The role of TV broadcasters has now changed: • very few have terrestrial transmitter networks • they typically depend on others for distribution (e.g. cable or satellite infrastructure) Distribution

13. FOUR BASIC MODELS Contentcreation Programmescheduling Distribution Contentcreation Programmescheduling Distribution Contentcreation Programmescheduling Distribution Contentcreation Programmescheduling Distribution

14. MULTI-PLATFORM POLICY • Broadcasters increasingly see themselves as “content providers” and are becoming agnostic about delivery systems • Public service broadcasters have obligations to provide “near-universal” coverage • in the past, universality was achieved by analogue terrestrial transmissions • in the future, universality will be achieved by a combination of delivery platforms • this “multi-platform policy” implies that broadcasters will make their services available on all platforms with significant audiences

15. HOW MUCH TO PAY ? • Some EBU Members have their own transmitter networks, but most pay network operators • Some network operators seem to provide good services at reasonable prices, whilst others are very expensive • Broadcaster-owned networks should be cheaper, but they might be inefficient • Have your costs reduced in recent years? • modern transmitters are more reliable → lower maintenance costs → less staff • modern transmitters use less electricity • if costs are constant, you are paying too much!

16. EXTERNAL SUPPLIERS • If you can specify the required services in a contract, you can probably use external suppliers • but you must be an “educated purchaser” • In many cases, your external suppliers will become monopoly providers because they understand your needs (better than you do) • In-house expertise is essential • do not throw the baby out with the bath water • Eventually, your in-house experts will no longer have up-to-date knowledge of costs and options

17. MORE DELIVERY SYSTEMS • Increasing the number of delivery systems generally implies extra costs • content must be re-purposed to suit the requirements of individual platforms (e.g. mobile phones, Internet, interactivity) • the cost of many delivery systems increases with the number of listeners or viewers • with traditional broadcasting, the marginal cost of extra listeners or viewers is ZERO

18. GATEKEEPERS • In the future, broadcasters will not control their own delivery mechanisms • The network operators or service providers can control many aspects of broadcasting: • positioning in electronic programme guides • technical standards (e.g. interactivity) • charges for services (e.g. conditional access) • initial costs might be low, but increase when the platform becomes successful • They can act as “gatekeepers” • some become very powerful gatekeepers

19. PRICE TRENDS Random-access memory Factor of 2 in 18 months Hard disks Factor of 2 in 12 months February 2005

20. PRODUCTION EQUIPMENT • All radio & TV production will become “tape-less” • tape-based production systems will be replaced by server-based systems • Networked systems using servers offer enhanced facilities, such as: • remote access to archives • several users can access and edit the same video clip simultaneously • improved productivity

21. PRODUCTION TECHNOLOGIES • Computer-based systems are widely used for production of radio programmes • Such systems are not yet ready for video production – because video is much more demanding than “office” applications • Computer-based systems offer many benefits for broadcasters, but effective implementation requires close cooperation between broadcast engineers and computer experts (not easy . . .) • It is crucial that EBU Members should become “educated purchasers” of such technologies

22. MAKING “IT” WORK . . . . • IT-based systems usually depend on hardware and software from different suppliers: • each of which tends to blame the other when systems do not work • During the installation phase, many broadcasters employ a “system integrator” who acts as the mediator between different suppliers • When such systems are put into operational service, new problems are often encountered • Consequently, the “system integrator” may have to remain on site to solve operational problems. • This additional effort is very costly . . . . .

23. PRACTICAL EXPERIENCE • With traditional broadcast equipment, much of the installation can be done by broadcaster’s staff – who thus gain valuable inside knowledge • With IT-based systems, there are very few broadcast engineers who can handle complex IT systems – and very few IT engineers who can understand broadcasting . . . . • Many pilot schemes for IT-based production have been late, over-budget and fail to deliver what the vendor promised

24. RISK-TAKING • IT-based systems are likely to have a shorter life than traditional equipment – with higher costs for depreciation and maintenance • “It is hard work to get computer-based solutions working – and even harder to keep them running. The good old days are over . . . . .” • Computer-based systems will eventually mature and deliver what the suppliers promise! • until then, such systems are high risk investments • Some EBU Members have had costly failures • many EBU Members cannot afford to fail . . .

25. THE WAY FORWARD ?

26. CAN THE EBU HELP ? • EBU Members can use their collective influence to promote the use of OPEN STANDARDS, which will permit inter-operability of systems from different vendors • EBU Members must help each other by openly describing their difficulties and their solutions • The EBU can facilitate such exchanges of information – with the crucial aim of preventing costly mistakes by smaller broadcasters

28. NOW THE GOOD NEWS . . . . ?? “People problems are far worse than technical problems” • Even if you avoid failures of technology, you will need to persuade “some people” that the new systems are not designed to: • put them (or their colleagues) out of work • make them work harder – for no more money • force them to learn new skills (multi-skilling) • Training is an essential mechanism • to overcome staff resistance • to get the best from capital investments

29. PRACTICAL EXPERIENCE • Efficiency gains are typically less than expected • Most production staff • want to be proud of their work • want to make “better” programmes, rather than “cheaper” programmes • Problem of “creative inflation” • new technologies often result in programmes that are “better”, not necessarily cheaper • New technologies demand new workflows – and force people to change their ways of working

30. HUMAN RESOURCES ??? “Now I know why business refers to people as human resources (not human assets) – instead of being nurtured, I feel as if I have been used up and spat out by my employer” • In the airline industry, economy class passengers are called “self-loading cargo”

31. ATTITUDES . . . . • Production of TV and radio programmes is a creative process • Production staff want to be treated as creative people – not as workers in a factory • some people feel that IT-based systems force them away from their core expertise • some feel empowered by IT-based systems because they are less dependent on others • People are different! • if we want their full cooperation, we must treat them as INDIVIDUALS

32. CAPITAL INVESTMENTS • Some EBU Members do not have well-defined procedures for approval of capital investment • new projects • replacement of old equipment • When purchasing new equipment, it is important to make financial provisions for its replacement • cameras for newsgathering need to replaced frequently (e.g. 3 years) • studio cameras have a lifetime of 7-10 years

33. FAILURE TO INVEST • In the event of a financial crisis, it is easy to defer replacement of equipment by 1 year • But it is not sensible to defer replacements for several years in succession • Some EBU Members have invested so little in replacement equipment that their whole infrastructure is now 15 years old – as well as being unreliable and out-dated • solving the problem is often too expensive! As the life expectancy of DGs is about 2 years, few of them are interested in long term projects!

34. MANAGEMENT OF TECHNOLOGY • Many EBU Members face huge uncertainties about their long-term role in the digital era • Decisions about technology made by EBU Members can “make” or “break” their futures • Despite this fact, some EBU Members have abolished the role of “Technical Director” or downgraded it so that the post-holder: • is not part of the senior management team • no longer reports to the Director-General • Take care that organisational changes do not contribute to expensive failures

35. CONCLUSIONS • EBU Members are generally “not good” at managing technology • Using external suppliers can work well, but EBU Members must become educated purchasers • New delivery platforms open up new opportunities for broadcasters – and for gatekeepers • IT-based production systems: • offer huge benefits in productivity • can transform programme production • BUT ambitious projects can go wrong

36. AND FINALLY … Georges Pompidou: There are 3 roads to ruin: • women • gambling • technicians The most pleasant is with women The quickest is with gambling But the surest is with technicians