In last year’s IBC post, I argued that cloud-based technologies were liberating broadcasting from control-room based processes and workflows, enabling anyone to effectively “broadcast” video. With wifi-enabled cameras, cloud-based video editing (check out WeVideo.com), cloud-storage, cloud-transcoding, and CDN delivery, there’s nothing stopping anyone from publishing a TV-like experience. And that trend has definitely continued throughout this year’s show. We need to look no further than Nativ’s cloud-based MAM (media asset manager) to see how traditional broadcast and video delivery systems are moving into the cloud.
When I wrote that blog post, though, I only scratched the surface of what was happening. The truly disruptive effect of the cloud and IP-based technologies is in not just how they democratize the act of broadcasting but, more so, in how they enable the digital transformation of the broadcast industry.
Digital transformation, as defined by George Westerman in his book, Leading Digital, happens along three critical axes—customer experience, business model, and internal processes. According to Westerman, as organizations transform along those axes through the application of digital technologies, they can achieve what he terms “Digital Mastery.” And companies that do so, like Nike, experience more bottom line revenue (because of efficiencies and new revenue opportunities) and a greater share of the market. Now Westerman isn’t just talking about the application of technology. When he talks about digital transformation, he sees fundamental change occurring within an organization as a result of digital—how it engages with consumers, how it engages with suppliers and partners, how it sells its products or services.
If nothing else, IBC2015 should be an eye opener to the tidal wave of digital transformation engulfing the broadcast industry and the incumbent broadcasters who are embracing it. Look at CBS with CBS All Access—not only does it provide consumers with an OTT video experience for CBS content but it’s also attempting to unify affiliates onto a single platform, enabling viewers to watch local news online as well as their favorite sitcoms. But it’s not just in the U.S. where we see broadcasters embracing digital transformation. The BBC and Sky TV in Europe are both broadcasting entire stations online and, in doing so, are create secondary “digital networks” of content programming. In fact, all around the globe we see broadcasters attempting to transform themselves through digital technologies.
Only, using Westerman’s framework for “digital mastery,” the transformation is falling short. What IBC 2015 shows us is that the technology to evolve the end-user experience (OTT platforms abound) and business processes (cloud- and software-based workflows employing native IP solutions) is mature and ready to use today. What we aren’t seeing at the show, though, is a radical re-envisioning of the business models around broadcasting. Despite the disruption coming through that new customer experience and more efficient internal processes for publishing content, we have seen little to no re-imagining of the way broadcasters operate in the market. Consumers are still paying subscription services and publishers are still delivering advertising as part of their video. And even though some content owners are going direct to consumer (i.e., HBO, AMC, etc.) there still isn’t a massive change in the way that consumers purchase content or the methods by which the organizations delivering it generate revenue. But what about consumers trading personal data for access to content? What about broadcasters giving away their content for free and, instead, monetizing access to the information they collect about viewership and behavior? There are definitely ways that broadcasters can shake up the monetization models but we have yet to see one do so and, as a result, true digital transformation eludes the industry.
To quote an overused term, the “tipping point” for the digital transformation of broadcasting has definitely come. Over the next few years, we will continue to see broadcasters embracing cloud-, software-, and IP-based technologies to not only re-envision the consumer experience but to completely redefine the way they do business. At IBC 2015, I can see the waves of digital transformation heading to the beach. And although the question remains about which broadcaster or content publisher will take the head first plunge (and re-define the very foundation of their business model), it’s clear that the tide isn’t going out anytime soon.