Return On Investment

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Others ROIs can be more subjective - example: ITV Project Phoenix. ITV Project Phoenix was set up by ITV, the largest commercial broadcaster in the United Kingdom. The goal was to remove the pain when creating multiple versions of promos and trailers each month. The result was a coherent platform for channel managers at the broadcaster to determine what trailers and promos should be created by using a simple user interface that gives immediate reassurance that the correct data is entered and what the final result would look like. Using Gallium FACTORY, the process is automated, creating around 1,000 promos each month that encompass all the different versions required for each title. The result is that the working lives of the media planners have become easier: they focus on the end result that they want to achieve, confident that with ‘a single source of truth’ there is no scope for error, and bulk changes can be made easily. And creative staff get to spend more time being creative, without the dull, repetitive tasks of creating different versions of each promo that are manually checked against the brief. The direct benefit here is largely reputational for ITV. There are more promos and therefore interstitials become more engaging, retaining audiences who no longer reach for the TVremote-control. This is an excellent return on investment. EVALUATING ROI IN BROADCAST AND MEDIA What do broadcasters think about ROI? Geir Børdalen, head of investments at NRK in Norway, said in a recent interview “Everything we do has to have the public in focus,” he told me. “We don’t invest in anything if it doesn’t improve the general experience for the public – AND improve our internal processes with regards to workflow, efficient product and logistical handling of the operations.” Like ITV, NRK is emphasising that its on-screen output is the most important consideration. So it is clear that, when setting out to evaluate ROI, you have to identify the project goals and ascribe values to achieving them. Another issue to consider is the move to software tools and IP connectivity. There is general agreement that this is the way forward, and a completely software-based architecture running on COTS hardware, or in the cloud, is likely to offer real cost savings in the longer term. However, the start of the process may well be an expensive step. Having an IP island which needs bridges in and out could be more complex. The evaluation of the ROI must include the benefits that are enabled through future proof developments, and therefore future cost savings. LIFE CYCLE & TOTAL COST OF OWNERSHIP The next step to consider when looking at ROI is the whole life cost and benefit, generally known as Total Cost of Ownership (TCO). The costs of a system are more than just the purchase price. They also include: • The power consumed, and the air-conditioning required to take the resultant heat away • The space occupied in the machine room • Maintaining the system • Upgrading the system, both to add new functionality and to eliminate bugs and risks in the software. The last point is a new consideration, and one that can be hard to visualise in ROI terms. In a traditional broadcast architecture, you purchased a bespoke hardware box to do a task. Perhaps it was a character generator, or an encoder, or a production server. When you needed what it could do you used it; otherwise it just sat in the rack taking power and space. If you needed this box to do something slightly different then it probably would not do it, so you had to work around it, not use that function or pay for upgraded replacement hardware. Software defined tools that run on commercial-off-theshelf hardware are much more flexible. The software can be upgraded at any time, so if something new comes along – eg. 4k or HDR – you can install the new feature quickly and simply. This flexibility should be considered when choosing the product in the first place. In general, you need to consider if your choice is: • Scalable – so as the number of processes or functions increase (for instance by increasing the number of channels), it can do more of the same • Extensible – you can add new functionality, like high frame rates, or other functions that we have not even thought about today • Sustainable – it will carry on if outside pressures change, like a new codec to deliver Ultra HD to tablets over mobile networks. This also implies selecting a vendor that is committed to the product area and to the media industry and who will be able to deliver on these promises in the future. Vendor commitment should be a very significant factor in any decision. CAPEX AND OPEX Traditional broadcast hardware was bought as a major capital expenditure project. Requirements were defined; equipment selected; installation and commissioning took place; and the system remained largely unchanged until the next financial capital investment cycle, perhaps seven or 10 years later. This model of working becomes a serious challenge when technology changes faster than the investment cycle.
Broadcasters are in danger of being left behind by their competitors if their hands are tied and are unable to move to new technology quickly and easily. The IT industry is much more fluid and fast-moving – enabled by the principle of Moore’s Law, that states, (broadly speaking), that the processing power of a computer doubles every 18 months. What is impossible on a standard processor today will be perfectly possible next year. To take advantage of this continuing increase in processing power, software companies continue to innovate, adding new functionality and more efficient ways of working, and making them available to users immediately, rather than waiting for some future capital cycle. Rather than expecting users to buy new versions of equipment or software, the biggest software vendors like Adobe and Microsoft have moved to a licencing model where you pay a modest amount each month or each year, and have access to the latest version the moment they are released. Broadcast vendors are also adopting this same model. As noted above, modular software allows you to choose precisely the functionality you need. Smart vendors now have dynamic licencing models that allow you to choose which functionality you want to pay for, and how you want to pay for it. While the Capex model (Capital Expenditure) has served us well for many years the introduction of Opex models (Operational Expenditure) to the broadcast business opens up a new world of possibilities. Example: Using hardware products you paid for 100% of the product even when you used 60% of the features only 40% of the time. Software defined solutions enable you to pay only for the function you use only when you use it. It is now possible to pay per Quarter, per Hour, per Feature – for a production facility this could mean paying per render, per job or even per frames rendered. Finally, software tools are allowing us to move from dedicated boxes in racks in a machine room to software instances running as virtual machines on standard servers in a data centre. That data centre may be on your premises, or it may be in the cloud. The traditional broadcast architecture was inevitably a capex investment. The arguments for moving to an opex basis – dynamic flexibility, future-proofing, tying functionality costs to production or broadcast needs, and releasing cashflow – are becoming overwhelming. CONCLUSION Calculating – or at least estimating – the return on investment on a project is vital to a business. It is unlikely that any CFO would let you get away without it. But it is also a key decision-making tool, and not just in the obvious ways. Considering the ROI forces you to look at how a particular project fits into your architecture overall; how it contributes to meeting the aims and aspirations of your business; and how it will contribute to smart, seamless and reliable workflows. Some of these can be tough questions. Éric Minoli, CTO at Groupe Média TFO in Canada. “We are a not for profit, government-funded body, and we cannot be seen to waste the taxpayer’s money. I want to move towards the cloud because it is a good thing, but I cannot ask for an increase in my operational budget, even if I am asking for a lower capital spend. I have to explain that the world is changing.” It is clear that every organisation will have different criteria by which it will measure return on investment. There is no simple answer. But once you have defined your requirements you will be able to put a measure against all proposals, and thereby determine what is best for you and your requirements, now and in the future. UK, Head Office Pixel Power Ltd College Business Park Coldhams Lane Cambridge CB1 3HD UK UK, London Pixel Power Ltd Building 3 Chiswick Park 566 Chiswick High Rd London W4 5YA UK USA Pixel Power Inc. 13457 Colfax Highway Grass Valley CA 95945 USA Middle East Pixel Power Ltd Dubai Studio City Building 4, Ground Floor, Office 2 PO Box 502459 Dubai UAE Tel: +44 (0) 1223 721000 Tel: +44 (0) 1223 721000 Tel: (818) 276-4515 Tel: +971 (0) 4 4329282 sales@pixelpower.com Pixel Power
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Return On Investment

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