Blog: Making the case for investment in an IP world

Today’s all-digital, HD, software-based environment is a world away from the specialist, dedicated hardware boxes of only a decade ago. Back then, after the initial capital expenditure for the build-up, the assets would be “sweated” for as long as physically possible – you’d keep using a piece of kit until smoke started to come out of the back, then invest in an extractor fan to exhaust the smoke, and keep using it until it wouldn’t turn on any more.

It would then be replaced by an identical unit, and the cycle would begin again. With any luck, you could get 15+ years out of it. Thanks to the move to IT-based systems, and its decoupling of hardware and functionality, the upgrade cycle is now measured in months rather than decades, or even years.

For the people holding the purse strings, only three things matter: does it generate new revenue, reduce churn, or reduce costs?

The cases for industry-wide moves to HD and file-based working had the advantage of ticking most of the boxes on the checklists of even the most parsimonious COOs.

HD, at least initially, was positioned as a premium product, both creating new revenue streams via new channels, and acting as a competitive advantage to reduce audience defection.

“The move to IP needs to be viewed as a long-term, strategic investment” 

File-based workflows were a harder sell – a change in workflow is not something that makes a difference to a viewer, so it didn’t generate new revenue streams or reduce audience churn. (Although it can be argued that nonlinear editing has completely changed visual storytelling, that’s for another column.)

However, it did offer the potential to significantly lower costs and speed up workflows thanks to reusable media, the elimination of the distinction between offline and online editing, and faster than real time delivery of assets. (Although it can be argued that those costs were simply shifted from opex to capex in the form of asset management systems and disk-based archival storage, but an examination of those sorts of unintended consequences are for yet another column.)

Manufacturers assisted in building an impossible to refuse business case by simply ceasing to manufacture tape-based systems. “Adapt or die,” is hard to argue against.

Now, less than a decade after all these changes, the pressure is on to move to an all-IP environment. So, let’s look at the three key questions: Does it create new revenue? No. Does is reduce audience churn? No. Does it reduce costs? No, actually it’s bit more expensive. Okay – how about the adapt or die imperative: Are manufacturers going to stop producing baseband technology? Not anytime soon. And unlike the move to file-based working, if an IP implementation is done right, almost no one will notice. And the few people who will have their workflow impacted by it - well, their jobs will become much harder to do.

So, this begs the question: “Why go down this route at all?”

It’s about thinking in the long term and building for an uncertain future.

There are an ever-growing number devices being used to access media, and a wide variety of ways to deliver to those devices – terrestrial broadcast, satellite, broadband, mobile data, on demand, OTT, and approaches yet to be thought of.

The supremacy of traditional broadcasting models is being threatened. To survive and thrive in this brave new world, broadcasters need to be able to adapt quickly – much quicker than is allowed by the pace of traditional capex rounds and refresh cycles.

We had nearly twenty years to prepare for the rollout of HD from when it was first introduced by Sony in 1986 and HD transmission was first launched in Belgium in 2004. Digital terrestrial television launched in the UK in 1998, the BBC’s iPlayer streaming service launched in 2007, and Netflix only arrived in Europe in 2012. It’s clear that the time scales of change are compressing.

We can see the benefits of the flexible, adaptable systems enabled by IT if we look at the evolution of post-production. To move to file-based working, tape systems had to be discarded wholesale; the move to HD was accomplished via software upgrades.

The move to IP takes the flexibility provided by software-based production and post-production systems and extends it to transmission and distribution. The transition to HD transmission required significant capital investment and long and complex integration projects. In an all-IP world, a similar move from HD to UHD would involve at the most a few configuration changes.

The benefits of moving to IP will not be realised in the short term. It needs to be viewed as a long-term, strategic investment in laying a foundation whose benefits will be realised in the future. What is clear, is that the model of an infrastructure built from single purpose devices is no longer fit for purpose.