M&A, 4K, IP and the cloud. Russell Grute (pictured below), discovered what’s on the horizon at NAB 2014.
A long-awaited round of mergers and acquisitions hit some technology vendors like a freight train at NAB this year. One post-show industry newsletter highlighted 11 confirmed deals. There are more on the way. But who really cares? Visitors faced an unwanted distraction guessing how the newly merged companies might fit together and what it will mean for their current and future technology initiatives. However, I suspect that finance drove most of this and not innovation for customers. Are we seeing long-term romance, arranged marriages or shotgun weddings? Which acquisitions are defensive and which have real forward-motion, only time will tell - perhaps driven increasingly by investors timescales rather than market requirements. Broadcast Innovation thinks that the Vizrt-Mosart and Dalet-AmberFin acquisitions are both interesting. Particularly when looking beyond the technology proposition and toward the capabilities of the teams acquired. Getting the right people in to the right new roles is the key to the most successful mergers. Broadcast Innovation will continue to watch carefully.
4K, IP and the cloud: the real driving forces this year?
In programme-making there has been substantial progress in the last 12 months with 4K, and beyond toward real Ultra HD television. Creativity is the driving force here, well served by improved low-cost, entry-level solutions from Blackmagic, Red, Sony and Panasonic. AJA entered the fray with its cine-friendly 12-bit capable CION priced at $9k; now a comparatively high-end price for entry level. Regardless of the current lack of standards and poor interoperability, cinematographers and television filmmakers have already seized the moment with 4K.
They are further aided by stunning innovation downstream in high-resolution post production performance too. Avid, Quantel and, current darling of the industry, Adobe all showed what they could do, which was more than many expected, especially at the price. Impressive demonstrations of FCPX using the new MacPro from current industry pariah Apple apparently showed hundreds of layers of 4K being run without rendering. Trouble is you have to do it Apple’s way, and they keep changing their minds. Great for consumers though - maybe we’ll just make our own content from now on.
Compare 4K costs in 2014 with the launch of mainstream digital HD solutions 10 years ago when HD upgrade costs were typically more than double their SD equivalents. The end-to-end economics of HD are still challenging for many broadcasters, yet basic 4K looks to be short-circuiting this in programme making and post already.
Ultra HD distribution is still a challenge, especially for broadcasters who are still reliant on traditional DVB and satellite routes to their core audiences. During NAB, Netflix announced it would begin streaming 4K in some territories. An H.265 equipped TV or STB with “only” 15.6Mbps continuous streaming is all you’ll need to go OTT and see it natively.
To get to Ultra HD still requires the many consumer-led and technical variables to be better balanced though. More improved frames with better dynamic range, rather than simple eye-catching big-number resolution. There is a risk of creating Ultra HD Lite, which could be too little too soon.
Realtime video over IP is a much drier subject. However it’s the one that’s really going to change the game. There is much more to IP than just replacing broadcasters’ video crosspoints. Widespread next generation video over IP is going to disrupt and resolve business models. Over the last year content producers, broadcasters, pay TV operators, and telcos have been feverishly partnering, bundling and in some cases loss-leading until the right business models stabilise. Look again at the “interconnect” agreement between Netflix and Comcast in February.
Advances in codecs, streaming techniques and software network management have already created many options. But which companies will actually invest most in video IP technology; who really calls the shots and who will be the winners and losers? Telcos and mobile operators are building the next generation video ready IP internet distribution infrastructure. How can broadcast technology manufacturers drive and access this new ecosystem, is it by sheer innovation and proprietary advantage or, more likely, by partnership? Something proprietary or something standards based? Alternatives including the nimble AVB initiative or partnerships based around Cisco emerged more clearly at NAB. We’ve been here before a few times.
Crucially, IP is also enabling a new generation of media service providers to enter the game. Providing, agile and often speculative third party services to assist broadcasters with challenges in capacity and capabilities. Specialists are now providing secure media exchange, production logging and media management, archive curation, content enrichment and rich metadata. All of these were all on show at NAB, and thanks to IP distance and location are no longer the barriers they once were.
Comments by two juxtaposed CEO’s got us thinking again about cloud technology this year.
A seasoned international broadcast CEO stood back from a show floor demo and confided to me: “When it comes to the cloud and virtualised services, sometimes our technologists are looking at solutions we currently can’t easily write a contract on. Our standard governance won’t allow us to store our production content or stage channel delivery with an untested vendor using a shared public cloud. Private cloud is perhaps something we should be doing ourselves but we can’t make that business case add up just yet. We have long-range fixed costs on data and satellite deals already in place.”
If cloud-enabled media exchange, content transformation and delivery are a future enabler, are some broadcasters and global media companies locked out? What if YouTube, Netflix, Google, Amazon (Fire TV launching in Europe) or Apple reach new audiences and revenue sooner?
By contrast an energetic and stare-eyed “CEO” of yet another cloudy media services start-up hit me with: “Think about it, the cloud is a great way to start a tech business. No hardware development, we can launch immediately, test our services in the field, get some revenue, we shoulder none of the running costs and scale-up success is based on opex paid for by the customer and, the infrastructure is paid for by the telcos! We only need one percent of the business of these big tech-companies that are paying millions in defensive mergers and acquisitions. How can we lose?” I estimated that over 500 vendors, out of the 1,550 present at NAB, many of them start-ups, were promoting cloud-based technology or services. But who should you trust?
Where next for media technology?
At NAB this year our converged industry is now passing through the eye of the storm and the clouds are finally beginning to align on the horizon. Finance, converged technology and changing business models now present an accelerating range of scenarios. Are paying audiences growing as rapidly as the number of multiscreen viewing options and what does 4G mean for video, 4K and beyond? As the resolution increases and IP standardisation helps align content production and broadcasting with telecommunications, progress for content creators and broadcast channels is now more dependent on regional telecommunications infrastructure investment too. Wherever improved internet and 4G mobile services roll out then telcos, mobile operators and their partners will increasingly lead the way to new audiences and revenue.
And finally, finally, back down to earth. The show-of-the-show for me was NewTek. If I could have picked just one thing to recommend this year I would have suggested everyone take 30 minutes to relax and watch the latest version of TriCaster put through its paces. Live on stage, leather-clad Captain Video and the ever-energetic Kiki S, as NewTek Girl, put on a great show complete with plenty of “holy Batman” script clichés. A great show is still what counts.
Russell Grute is founder of Broadcast Innovation Ltd, an independent broadcast and media technology consulting firm. The company advises broadcasters, media companies and service providers on improved media management strategy