Louis Hernandez Jr, CEO of Avid, sat down with James McKeown at September's IBC in Amsterdam to discuss his company’s challenges, where the industry is headed and how his entrepreneurial background has put him in good stead to drive the company forward. In this excerpt of the interview, Hernandez assesses the changing environment and the message that the industry needs to buy into.
In terms of your own perspective on where we are and where the industry is headed, what do you make of the current environment?
I think it’s undergoing some fundamental changes. Sometimes when you’re in the heart of the change you don’t appreciate how fundamental it is. The digitisation of the connection between the idea that you have to create content and the consumption of that content allows a much more intimate, more powerful, more economic connection. Every other part of our lives is becoming digitised. The way you buy a car and the way you meet people is being digitised so why wouldn’t media be digitised?
For our clients it offers some fundamental questions. Why do we need to be so siloed? Why do we need to have so much proprietary technology? Why do we have to have so much fragmentation and non-cooperation between vendors, which is costing us 25-30 per cent extra? We think it is the most inefficient deployment of capital of any industry. Why do we have to live with this?
These changes are causing media companies to ask questions about ‘how should we organise what technology we deploy and who should we hire?’ The siloed approach isn’t sustainable with the economics of today’s media industry. The good news is that media consumption of rich media is rising rapidly so it’s a good place to be if you know how to create content. The problem is you need to create great content more efficiently and you need to get more value out of every asset. That’s what Avid Everywhere was designed to address.
There’s an understanding now of the change that’s taking place and that component parts of the industry are less afraid of that change. Do you agree?
I don’t see enough leadership from the people on the floor here. I actually see more ideas from the clients than I do from my peers. That’s not normally the case and I’m not sure why that is. I think this industry needs more leadership. I think the vendor community could do more to step forward and create a path that makes sense for them and for us. Interestingly, everyone’s talking about 4K within their silo or device but it has to be solved in a more creative way. That just means we’re on to 8K and you throw everything out and do it all again. Other industries do it a lot smarter. We can do it a lot smarter. We can expect more and the clients should expect more.
What challenges are you facing now in terms of driving the strategy for Avid amid this evolving landscape?
I had the luxury of being on the board five years before so I was familiar with the company’s strategy and got asked to be the CEO. There are the same questions you would normally ask: who are we, how are we unique and different, how do we address the biggest pain points of the industry? What I found is that we have a lot to be proud of and to build on but we also have tremendous opportunity right now.
We have a 25-year heritage in a category we helped to create on the editorial side. But just as we reimagined how to create content, we’re now reimagining how to connect the entire workflow between the creative process and the distribution process. Now that it’s digitised, it should and can be fully digitised. Our clients have a unique challenge in that they don’t have the luxury to just worry about the digital channels and devices. They have to worry about the terrestrial and heritage business also so they have a more complicated set of questions.
Coming in has been a lot of fun because Avid is a very trusted and respected brand. It’s proven technology that has been part of the family for 25 years. Avid Everywhere is being adopted at such a fast rate but it’s not because we’ve convinced everyone it’s the only way to do things. From conversations happening with clients for two to three years, they just didn’t have anyone to attempt to put together a cohesive and enterprise strategy. Since it comes from someone in the family, someone they know and trust, it is being adopted at record rates right now.
The industry was looking for it and I feel they were looking for someone in the industry to step forward and say ‘here’s our take’ on how to move forward as an industry, more than just in one of the silos. We asked clients what’s important to their business of media, not just what’s the next function or feature they need, when and how do they want to move to 4K? It’s much bigger than that.
There’s a lot to be proud of but there’s a lot changing within the family and we need to do something more about it. 4K is a good example because the issue isn’t high resolution, in fact it’s going to keep changing. We’re in a world where you need to create great content and consumers are demanding better viewing experiences but the ease with which you can create content today has increased the competition for viewership/listenership/advertising revenue. Content creation has gone up dramatically in the last 15 years but budgets haven’t. You have to do more with less.
Here’s an example with 4K of a new standard being adopted for viewing, essentially for resolution, that’s changing codecs on the front end with manufacturers and changing devices on the back end. We can go through this endless merry-go-round of waiting for the next resolution decision to be made and throw everything we have at it but with the business dynamics it’s not sustainable. We have to think of something different.
What is the message that the industry needs to be buying into?
The industry is in the middle of a transformation. Clients should be expecting more. We only need a couple of vendors to join the movement to be more creative. What industry has changed their delivery so you can now only be cloud? Or the fact we’re so fragmented. There’s 1,500 main vendors that have no interest in making these connect, everything is point to point. We have a responsibility to stand up and say there’s a better way and that if we work together and collaborate we can help ourselves and our industry solve the biggest issues.
The issue isn’t how do we do the next button or feature, it’s how do we keep doing what we love to do in a sustainable way. We have to work together more. We’re trying to take out this fragmentation that is costing us 25 per cent of the budget. Lets use that money instead to focus on what the joy is. The joy is in creating content.
The full interview with Louis Hernandez Jr can be read in the October 2014 issue of TVBEurope magazine.