Thursday, 26 January 2012

Keeping MAM - will familiarity with files consolidate the post production technology industry

Having written previously about how the proliferation of devices and device formats creates a complex supply chain problem for digital content distributors and retailers, I thought it was worth writing about how the production technology market is affected by the same trends.

Post capture production was traditionally a business of tape-based cameras, consoles, decks, switches and related technologies for the purpose of content capture, manipulation, management and storage. It has historically been a hardware market with defined replacement cycles and, in the case of cameras, a lucrative ongoing revenue stream in tape sales.

As editing became file-based and output formats proliferated, more attention focussed on the need to create automated workflows for content production and distribution (an integrated production system). This move to file-based media threatens the traditional post-capture technology model as increasing proportions of post-capture technology is moving onto software that runs on commodity hardware and requires no ongoing investment in removable storage media. Furthermore, many software and service companies have moved into the hardware vendors’ traditional space and are competing effectively with them in some areas.

The crucial battleground in this multi-billion dollar market is that of media management. It is the media management component of an integrated production system that co-ordinates the flow of media around an organisation, ensures that its integrity and identity are retained and that its use is understood. In my view, media management includes a number of processes within post-production:

  • Ingest from various formats (e.g. tape, internet file transfer, camera hard drive)

  • Asset management (e.g. store content and metadata, search, view, transcode)

  • Integration with business systems (e.g. ERP, finance, BI, MI)

  • Integration with editing, QC

  • Outgest to various formats (e.g. tape, internet file transfer, camera hard drive, DVD)

  • Linear playout based on schedule

  • Studio playout

  • Integration with the VOD platform

As software supplants hardware in this market, so the make-up of the supplier base will change, from a market where every system is bespoke and integrated, to one where the systems are common and are configured to an organisation. This shift is also vital if media management is to become a capability used by organisations outside those who create and distribute content as a core business. The shift to third screen experiences in the physical world will entail other organisations to make, manage and use a huge collection of media and make it available at point of sale based on external queues. Although distribution can potentially be bought in from network providers, media assets that describe and promote physical products may become differentiators for organisations in the real world

Media management may therefore become a market at which a much larger industry develops and therefore become (even) more attractive to investors. I have a number of hypotheses about the development of this market:

  1. The global media management market will grow strongly over the next decade and its scope will expand outside of broadcasters and studios to include most major consumer-goods brands.

  2. The pace of carrier network upgrades means that the majority of media management technology will be deployed within the firewall until at least 2022.

  3. The media management software market will consolidate. There will be two or three major end-to-end software platforms that are configured to the requirements of the organisation, rather than the current market, where solutions are customised on a case-by-case basis from a variety of products.

  4. Because configuration will become the norm when deploying media management systems, the systems integration market will not consolidate significantly. Instead, traditional systems integrators will be able to do the work traditionally performed by broadcast engineering specialists. The economies of scale of large SIs will give them an advantage in this market.

  5. Media management systems will be hosted on data centres running a mixture of conventional servers and specialist media servers, containing hardware optimised for video processing. The latter will be rendered economic by the scale of the media management market globally (bringing scale economies), the volume of content being processed and external factors, such as the cost of electricity.

  6. In life, media management solutions will typically be managed as part of IT outsources in large organisations and by in-house IT teams in small organisations.

  7. The value chain in media management will therefore consist of four types of organisation: software developers, hardware manufacturers, systems integrators and IT outsourcers. The highest margins will be in software, although there will be high value areas of the hardware market.

I’d like to pull out a couple of areas from those hypotheses. Firstly – and despite the views of much of the technology industry – I do not believe that cloud-based solutions will be viable for media management in the foreseeable future. The principal reason for this is that raw media files are too large to economically move up into a cloud solution – the bandwidth is simply not available in the real world. It is also the case that it is very difficult to outsource a process or workflow to the cloud that is not mature in environment that exists within the firewall. This is not mature technology and to treat it as such risks running into bugs in the process as well as the service model. I’ll write about cloud in relation to production at a later date.

The second key point in my view is that hardware still has a place in this industry. File-based processes are very hard on commodity fileservers, which are by their nature designed as a utility solution. Since the GPU was designed – as is still predominantly used – for graphics processing, it could be that more specialised hardware based on hybrids of GPU & CPU computing could be an energy, time and cost saving solution for the industry as it moves to a software driven technology base.

Such a change will shake up the industry. Players like Open Text & VizRT have established themselves as very credible players in media asset management and could easily widen their reach, while others like EMC, SAP and Oracle are beginning to offer more enterprise alternatives. Traditional players like Sony and Panasonic have been rather slow to respond, however they have the financial muscle, industry know-how and credibility to make large plays. My personal view is that they should do so through acquisition – developing cutting edge technology from scratch in this market may be a flawed approach. They should instead search out good technology services that are not being marketed effectively (if they want value), or go large and go after one of the major MAM vendors.

Either way, if I were a shareholder of a good file-based production technology company right now, I’d be feeling rather smug.

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