Broadcast & Distribution – The term “Evolve or Die” may have even more meaning today than when uttered to the broadcast industry some years ago by the FCC Chairman. Things are so ripe for rapid change now that we are likely to look back on this period someday and gasp at the changes set in place that reshaped the way content is created, distributed and consumed.
That may sound like hyperbole, but let’s consider the trends and see if you agree.
At a recent SMPTE industry luncheon, Sinclair Broadcast Group VP of Advanced Technology Mark Aitken tried to ring a cautionary bell. In his speech, titled “Where to from here? (Seen through the eyes of a local market broadcaster)”, he said, “At no other time in the history of broadcasting has it had to face as many issues as it faces today, which is a reflection of the rate of growth and development and the rate of growth of consumer consumption. And it’s a bit of a reflection of the inability of Washington to get a lot of things done at the same time”.
Not surprisingly, technology is behind the changes. Let’s start with content creation. The barriers to become a top notch content creator – for movies or TV – are falling rapidly. The price of cameras with very high levels of performance keeps dropping. RED started the revolution but now AJA and Blackmagic are piling on with new professional broadcast and film production cameras that can capture 4K (DCI or UHD) at very affordable prices.
4K is not coming – it is here and it is driving change and innovation throughout the capture ecosystem. Workstations keep getting more powerful and workflow tools more integrated to streamline operations. Portable workstations with integrated storage, color grading and playback are now available that are changing the pace of content capture. Even special effects houses, which have been battered in the last few years, are finding new ways to be relevant.
Five years ago, there was hand wringing about the dearth of episodic TV programming. Now, episodic TV production is probably at an all time high. Netflix and Amazon are expanding their slate of original programming. How long before Google or Apple joins them? And, there are so many niche TV shows being produced now that it is impossible to track them all. The barriers to entry are low, costs to produce modest and distribution is easy.
The major TV networks are reacting by raising their production values but also focusing on content that drives advertising revenue. Did you know that Google Analytics are now in many set top boxes – ones with a direct Internet connection? This allows Google to monitor what you watch – even if you record it and play it back later. If you now cross reference this data with your address, Google can probably create a pretty good demographic profile. What does that mean? Personalized advertising. That is quite a sea change from the wide net approach advertisers have traditionally used in TV.
Some broadcasters are really nervous about what Google is doing. Sinclair’s Aitken pointed out that, “Google has declared war on the ad industry. As an industry if we’re unaware that we’re at war, we’re going to lose. The war is much bigger than any one industry. They’re after our business, our advertisers, our content, our viewers”.
In production studios, 4K is pushing investments everywhere. At the same time, there are major changes afoot in the way video, audio and data is distributed within a facility. Separate networks for varied infrastructure needs are moving toward an IT-centric solution. It is quite likely that a large majority of broadcast facilities in the next 10 years will ditch SDI and move to fiber and Ethernet infrastructures to carry everything.
In addition, the virtualization trend means that equipment suppliers are moving from a dedicated, expensive box solution for every function to software running on massive server farms with everything connected by 10-, 40- or 100-Gbps routers and fiber or CAT cable. These farms can sit in facilities or in the cloud and can be scaled up or down as needed – a far more efficient way to run a business.
On the consumption side, the distribution infrastructure to deliver content to every device a consumer owns is changing daily. I heard several stories while at the SMPTE conference about how delegates’ broadband service suddenly went from 30 to 300 Mbps. That’s a big pipe. I also learned that some municipalities, like Los Angeles, are thinking about changing the concept of cable monopolies that have dominated the landscape for over 40 years. They are considering requiring a second alternative for broadband access in the city with the requirement that providers offer a 1 Gbps service. And I thought 300 Mbps was a big pipe!
The very fabric of the business is changing. Netflix has proved that OTT works and now HBO and CBS will offer their own OTT services. Will they position this new service as a 4K-UHD channel? The horses are quickly escaping the barn that and will destroy the 500 channel cable business model. These MSOs need to become ISPs, but will they become more? Will Verizon FiOS and AT&T Uverse restart fiber infrastructure investment?
In reality, almost anyone can become a network today as the cost to create and distribute programming via the internet is changing everything. Think about it – for under $50K, I can get professional grade HD equipment and tools, plus a channel in a box solution to distribute programming over the internet. That’s incredible.
And lots of bigger players understand this. Roku now builds its streaming service into the TV and Google would like to follow. How about Apple? No set top box – just an internet connection to the back of the TV and a wireless router to stream to every device in the house.
Qualcomm and others are also proposing massive increases to the bandwidth of wireless services as well. More bandwidth is no field of dreams – if they build it they will come – and fill it with video.
And let’s not forget the consumer electronics makers. Higher resolution and higher performance displays are clearly a major driver in product differentiation and quality. Panel and TV makers are pushing UHD pixel resolution to revive sagging TV sales, and with massive display investment in China and aggressive pricing policies, it will soon be hard to not buy a UHD TV. UHD will also be moving down screen all the way to smartphones – some of which can already capture UHD content.
While the expanded pixels offered by UHD or 4K is the engine right now, enhancements like high dynamic range, wider color gamut, higher frame rates and immersive and personal audio are coming. This will raise the bar once again, driving change and innovation throughout the chain.
These changes are not without challenges and pain points, with storage and bandwidth perhaps among the most critical. While bandwidth is increasing, compression technologies like HEVC and VP9 are making it possible to squeeze a lot more into the same bandwidth.
There are obviously a lot more facets and details to these sweeping changes, but I think these highlights paint the picture well enough. Change is afoot and consumers will benefit, but there will be many new winners and losers along the way. – Chris Chinnock