A fundamental shift for public broadcasters
Broadcasters across the world are looking over their shoulders as online streaming services coupled with mobile internet are taking over audiences, especially the younger demographic, away from traditional television oriented channels of entertainment. Online streaming and mobile media consumption has exploded in recent years – from 5% in 2011, it now accounts for over 25% of all media consumption today1. The younger demographic (between ages 18-35) already spends almost 50% of their viewing time on mobile2. The considerations for a public broadcaster will be different from a commercial player, however the need to reach all citizens effectively would dictate that when it comes to keeping up with technological innovation, there is no divergence in vision. Also inherent in the switch to new platforms and services, is the critical transformation from a broadcast model to the intensely personalized model of digital devices. This dictates a fundamental shift in the role of the public broadcaster and to be successful, they should adopt new ways of working popularized by digital native corporations.
A looming spectre
In Nov 2017, BBC Director-General Tony Hall warned that the world's oldest broadcaster is facing a funding shortfall of 500m GBP a year3 over the next decade despite its high end production offerings such as Sherlock, Planet Earth, Bake Off, MasterChef et al, to name a few.
The current revenue model based on license fees, government grants and select commercial activities may not be sustainable. Traditional broadcasters have to transform themselves to be able to compete in a digital space, dominated by players like Netflix, Amazon, Apple et al. With digital playing field set to become increasingly competitive with new streaming channels being launched by recently consolidated media conglomerates (e.g Disney, Comcast) as well as fresh initiatives from YouTube and Facebook; broadcasters are forced to act urgently and quickly – both in terms of running the right digital transformation programs as well as in finding ways to fund the transformation.
But there is a silver lining for original content producers
Broadcasters who create original content and have a captive audience or community around this content can expect exponential growth in the future with digital. Even content aggregators like Netflix is reaping benefits as well as betting big on original content – as reflected in results and guidance statement of quarter ending March 2018, where Netflix recorded highest ever growth in online streaming history of the company. Original content production however is costly business, one of the avenues broadcasters must explore to make it sustainable, is to get their IT estate in order and optimize for digital monetization of content. This article explores a few meaningful ways in which public broadcasters can approach this transformation, and focuses on the following key aspects -
- Transforming to a OTT player on a capability based model
- News ways of working which enables that
- Having a digital inside view, along with the necessary digital outside view
Over the years, broadcasters have accumulated a plethora of systems for content production, management or playout resulting in a fragmented ecosystem. Such an environment makes scaling production or playout capability expensive and time consuming. While moving to the cloud is an obvious solution to provide scale and agility, actual cost reduction will not materialize unless it is coupled with the way organizations function.
An effective approach in re-imagining the enterprise estate is to shift to what can be termed as a capability based model. To illustrate this approach - the systems involved in production, management and playout of reality TV shows can be theoretically used across all such shows – in other words, the cumulative set of systems and processes around it becomes a capability required by reality show content makers. Same goes for news, live sports telecast, election coverage, feature productions and even backlist content monetization. Once a best in class baseline of systems is arrived at for a capability (i.e. election coverage), the capability can be setup and delivered as a service on the cloud. Implemented across the enterprise, it can provide significant cost reduction due to standardization, reduced cost of maintenance, licenses and manpower as well as the agility to scale at will and react to audience preferences and seasonality of events and programs.
Arriving at best in class baseline of systems is a key step in creating a capability based service model, and it’s difficult to achieve without new ways of working together across IT and business as well as across teams involved in multiple programs of same genre. Agile squads, cross functional teams, devops, monitoring and security are fundamental to achieving the transformation. CxO commitment and governance, shared matrix and performance goals, phased approaches to capability rollouts and alignment on goals and KPIs which when allied with right skills and partners can go a long way in delivering the desired business benefits around agility as well as savings required to drive digital business.
Digital outside is a term that encompasses fundamental capabilities which enables broadcasters to engage the viewer across his customer journey, which may cover multiple devices, viewing times and geographies. True transformation involves shifting from “broadcast” to “engagement” model – understanding consumers, offering personalization, recommendation, cyber security and competing with digital native companies that know more about their audience. It’s also about changing underlying enterprise systems (e.g. moving to cloud versions of ERP systems) which give necessary backend capabilities for digital products and services mentioned above.
It’s not only enough that we put a digital frontend to consumers, the transformation involves internal changes as well, which in spirit of synergy can be called digital inside. This involves capabilities around platforms to create new content and workloads on cloud, being digital first in production / acquisition, ability to handle newer broadcast standards and quality levels. Also important is ability to adapt to new channels of playout, whether its efficiency in testing across mobile devices, VOD Asset tracking and performance reporting using robots.
Public broadcasters should continue to invest in high quality content and new ways of engaging their audience. However, they need to ensure a significant portion of this investment is on value creation and less so on enabling infrastructure and other costs. To achieve this, in the short term, public broadcasters need to have a good look at standardization of systems and processes to become agile and responsive to market needs. New ways of working and taking inspiration from digital native enterprises to be truly digital both outside and inside are critical in making this transformation a success.