Historically, the broadcast industry has been very profitable; owning a broadcasting licence was literally a licence to print money. Historically, it was viewed as “special” and how programming was made and delivered was its differentiator. This was misplaced thinking. Of course, it was the content that was the differentiator.
Broadcasters developed their own special workflows and technology stack to support them, spending millions on custom products. Every broadcaster became different and special.
Fast forward to the arrival of alternative distribution methods – such as streaming and the fragmentation of advertising revenues to the web – and the traditional broadcasters’ revenues have collapsed, creating a cost overhang. At the same time, broadcasting is being subsumed into the much larger IT industry, which provides our communications, networking, compute and storage platforms.
Our ‘specialness’ has become a cottage industry that creates applications that run on the major IT platforms. At the end of the day, delivering content for the BBC is the same as for ITV, CBS, NBC, France TV, ZDF and KXGN-TV in Glendive, Montana (as far as I know, the smallest TV station in the World, serving 3,900 people).
The problem is the descent into unprofitability has been rapid, leaving many broadcasters sitting on highly customised workflows and technology that cost fortunes to build and are expensive to operate and maintain.
They can’t afford to change but can’t afford to stay the same. They are in the technology trap.
Recognising the dilemma and making the change takes bravery, typically brought on by financial pain. Some broadcasters are not there yet; they are still at the stage of stopping travel to IBC and reducing kitchen supplies. However, that approach barely scratches the surface. What is required is a wholesale re-engineering of workflows and technology to support the cost base required by the new world.
Adopting the scalability of the cloud and new SaaS models can be a big part of the solution. And by this, I mean cloud native solutions, not the ‘lift and shift’ systems we first saw a decade ago where on-prem products were moved into the cloud without re-architecting. Those systems deliver none of the promised flexibility, more cost, and less reliability, slowing mass adoption and creating a much longer ‘trough of disillusionment’ than normally expected when launching new technology.
The modern cloud-native solutions today have a large enough base of broadcasters willing to vouch for the technology benefits publicly. Enough so that we can now say mass adoption is finally underway. However, these re-engineered workflows based on new flexible cloud technologies can be very disruptive, with whole markets forced to follow the market leaders who can operate or provide services at dramatically lower price points. This leaves the traditional players uncompetitive. They are the deepest in the trap: what was their perceived technology advantage becomes their prison. Forced to operate custom legacy platforms they cannot leave. Too deep into the customisation to abandon it; too much sunk investment to fund a replacement.
It’s often an emotional problem, not just a technical one. Protect the palace that was built. The trap is as much institutional as engineering. A legacy product kills a company if it is not kept updated. Customisation deepens, support ends, the platform falls behind, and the combination of sunk cost and dependency removes every exit.
With new disruptive technology being adopted, it will be an interesting few years, as the industry reinvents itself, with some winners and some losers caught in the technology trap.
