You know that cloud-based services have come of age when Supreme Court Justices start worrying about the subject. As B&C Washington bureau chief John Eggerton has reported, justices were “clearly struggling” during Aereo’s April 22 oral arguments in the case to address broadcasters’ copyright complaints about the company in a way that would not hurt the overall spread of cloud-based technology.
How they navigate that legal storm won’t be known for a while but, in the meantime, there is little doubt that cloud-based technologies will be a major topic at The Cable Show 2014, which begins April 29 in Los Angeles.
As TV Everywhere offerings proliferate, much of the interest at this year’s Cable Show will be driven by the difficulties of delivering massive amounts of content to hundreds of different devices using traditional infrastructures, and by promises of significant cost and capital savings.
“To deliver that content, broadcasters have been using multiple vendors and developing in-house systems that require teams of 60 or 70 people to manage the process” of creating many different file formats for a multitude of devices, explained James Segil, CMO of Verizon Digital Media Services (VDMS).
VDMS significantly reduces that complexity by allowing clients to deal with one vendor and produce only one file format for both content and ads that is then processed in the cloud to deliver content to many different devices, Segil explained.
“It gives them one throat to choke,” he said. “It reduces complexity and costs and allows you to get content out to the market quickly to drive more revenue.”
But even vendors and proponents of cloud technologies stress that users need to carefully explore their options to avoid hidden costs and technical glitches. Best practices for selecting and deploying cloud-based technologies include a rigorous examination of ongoing costs; defining what type of cloud-based service would work best for a programmer; how a provider’s global infrastructure might fit with a company’s international channels; the impact on existing systems such as traffic and billing; the crafting of cloud-based workflows; the provider’s ability to handle heavy traffic; security systems for user data and content; the importance of retraining and reorganizing tech teams to better handle cloudbased workflows; and the creation of a new corporate culture so that companies can capitalize on the opportunities these technologies create.
Clouds Everywhere
The growing importance of TV Everywhere offerings is significantly boosting interest in cloud-based services. Developers from VDMS worked with Disney/ABC on its Watch ABC and other apps, and the Microsoft Azure Media Services did extensive work on the Sochi Olympics.
“We did 23 days of non-stop broadcasting [of] live streams, which included hosting the most-watched live Web event of all time, the live Olympic hockey game between the U.S. and Canada, with three million users,” said Bob De Haven, general manager, Worldwide Communications & Media, at Microsoft Corp. “That was a game-changing event that…has driven a massive influx of interest.”
Such services also have the advantage of allowing users to easily launch new channels or add new devices without hefty investments in broadcast infrastructure. “I’ll never build another big-iron broadcast center,” said Vince Roberts, executive VP of global operations and CTO at the Disney/ABC Television Group, who is in the process of constructing a cloud-based infrastructure for ABC broadcast feeds. “In the past if I wanted to launch a channel, I would have to build a whole new workflow chain with all that hardware in-house. Now, I can just stand that up in the cloud.”
That can create significant capital savings and cuts in operational costs because these services rely on less expensive IT hardware, vendors argue.
Ongoing costs for cloud services also continue to fall, with major providers announcing significant price cuts so far this year. “We calculate the most meaningful cuts were taken by Google, AWS [Amazon Web Services], Microsoft Azure and Go Grid,” wrote RBC Capital Markets analyst Jonathan Atkin in a mid-April note to investors. He contended that AWS, CloudSigma and Google “still rank as the overall lowest-priced providers.”
But Roberts, a major proponent of cloud-based workflows and systems, cautioned that cloud deployments shouldn’t focus exclusively on saving money. “Cost reductions have been an early theme in the advantages of cloud but…I need to look to revenue if I’m going to invest,” he said. “Integrating cloud technologies in our space can streamline some operations, but it doesn’t necessarily save you money. What it really gives us as an industry is speed and agility to market.”
One example of that flexibility would be the ability to launch new services, Roberts says. In international markets they could localize their channels for specific areas without building new facilities, and in the U.S. they could use cloud services for temporary promotions or stunts with multichannel providers. “I could stand-up something in the cloud for a a weekend in specific market with an operator like Comcast and then take it down when it’s done,” Roberts explains.
For large international programmers such as Disney/ABC, that also makes it important to choose a provider with a global footprint.
Be Calm and Stay Secure
Content security and the various flavors of cloud technologies also need to be carefully examined. “Content security is a huge issue for us,” Roberts says.
As a result, Roberts says they will not initially be using cloud-based services that rely on the open Internet. “Everything will go behind the firewall of our corporate cloud-hosted infrastructures in private environments,” he says.
Such services also have to be architected for an exceedingly high degree of reliability. “The linear TV business has expectations that the feed is there and working,” he says. “It can’t be there sometimes. It has to be there all of the time.”
Those requirements, which will be important for most TV programmers that have very large advertising businesses and content they want to protect, will increase costs. “You pay for that reliability and security,” Roberts says.
Microsoft’s De Haven adds that the reliability issues were highlighted this year with the problems HBO Go had during the very heavy traffic of the season premiere for Game of Thrones.
“You have to pay very close attention to how the system is architected,” says De Haven, adding that this is what allowed them to deliver content for the Sochi Olympics without problems and hefty investments in security and data centers.
De Haven also stresses the importance of having a flexible solution. “Microsoft Azure is designed to help you build out new services where you can run it in the public cloud, private cloud or some hybrid of the two,” he says. “Obviously the public cloud is the most cost efficient and the private cloud is the most expensive.”
To ensure that flexibility, both Microsoft and Verizon are offering complete solutions for cloud-based services.
Microsoft has done this by partnering with various companies and acting as a “general contractor” while Verizon has acquired companies to build out its tech portfolio.
The deployment of cloud-based services is also part of a larger shift to infrastructures based on software that runs on less expensive equipment from the IT world, Roberts says.
Ralf Jacob, chief revenue officer, North America, for Verizon Digital Media Services notes that a number of major programmers had been trying to develop systems in-house for managing the distribution of content to multiple platforms but found the process too complex.
“If you approached these companies two years ago, they would say they are doing this in-house,” Jacob says. “But now they are coming to us to talk about a turnkey solution. They are coming to the conclusion that it is costing them too much money and that they should be worrying about the content, not the technical side of getting the over-the-top model off the ground.”
With Verizon, the process is greatly simplified because broadcasters only have to provide one format for programming and ads, which are then processed in the cloud to adapt to a wide variety of devices and bit rates.
The move to these new technologies also requires a major change in corporate cultures. Disney/ABC, for example, has made a concerted effort to retrain existing staff and to bring in new talent so the tech teams are capable of responding to the flexibility and opportunities cloud-based technologies open up, Roberts says.
“It creates some challenges because the traditional broadcast engineering community isn’t familiar with these new environments,” he explains.
But it also requires changes in the way companies make business decisions. In the past, large upfront costs might have discouraged some investments. “Now I can stand up a new feed in Latin America and if it doesn’t work, shut it down without having to spend a million dollars on infrastructure,” Roberts says.
That will require a greater willingness to quickly try out new ideas. “What this technology does is that it removes the barriers to entry,” by getting rid of the need to build new infrastructures for new services, De Haven says. “That also means that everyone has to be a lot more flexible and nimble.”
NEWSWORTHY TECH DEVELOPMENTS
During The Cable Show much of the discussion of cloud-based technologies will revolve around multiplatform delivery of content. But those technologies also are attracting a lot of interest as tools for local TV stations in such areas as graphics, digital platforms and newsgathering.
Besides using cloud-based services from Verizon for its Watch ABC app and others, Vince Roberts, executive VP of global operations and CTO at the Disney/ABC Television Group, said the company is working on cloud-based systems for delivering ABC network feeds to its owned stations and is exploring the idea of using cloud-based systems such as Adobe Anywhere products for newsgathering. “I think we are just touching the top of where cloudbased editorial will take us,” Roberts said.
Microsoft, meanwhile, recently announced Skype TX, a new product designed to allow broadcasters to easily integrate Skype capabilities into the studio environment so Skype calls can be seamlessly used in broadcasts.
“There is a whole lot of interest among broadcast station groups,” about using cloudbased systems to “share content” and for newsgathering, said Ralf Jacob, chief revenue officer, North America, for Verizon Digital Media Services. “We are at a point where there are applications for every part of the TV ecosystem.”
