MAD Perspectives Blog

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Adobe's announcement last week regarding its commitment to the SaaS based Creative Cloud over its packaged Creative Suite software has created a big fuss online and elsewhere. Over 10,000 customers have signed a Change.org petition insisting that Adobe continue to offer packaged software. Adobe's decision and ongoing challenge as it relates to software development and sustainable business model is one that many other software companies are facing. The changes being proposed were not made in isolation or without consideration for customer need.  They are not decision made lightly.

Any company offering cloud-based software, infrastructure or services must determine a business model that is acceptable to their customer base, while ensuring that the cloud offer provides a more than acceptable quality of service. Software companies benefit from low variable costs when developing their product. An established company, like Adobe, has solid customer base who anticipate new products as well as product updates and upgrades. Any investment in product development is recouped through a combination of software licenses and maintenance fees. Software has typically been a relatively high margin business with high, defined fixed costs and low variable costs.

When shifting to a SaaS model, Adobe not only continues its fixed costs related to software development, but picks up the variable costs related to infrastructure (e.g., servers, network, security, HVAC). There must be a "leap" to a new, predictable revenue stream. It is a massive shift in business model, where the recurring revenue from a client subscriptions must cover ALL costs.  The benefit for new customers is a less costly manner to gain access to robust creative tools. However, existing clients can only see the large investments made over many years and the loss of control over their creative environment. Their is concern in paying for access to more applications than they need or want; AND losing access to files if they are late making a monthly payment.  I read a great blog by Eric Hansen with his perspective on the pros and cons.

I honestly don't see that there is any way for leading software vendors to avoid a shift to the cloud. The challenge will be how they implement it. Will it be a cloud only option, a hybrid offer or will there be a transition period (something Adobe might have considered). From a completely different perspective, it's interesting to note that Harmonic is offering transcoding in the cloud via private cloud, managed service or Amazon Web Services. This provides options for all types of users from large to  small and for those that need frequent access to transcoding services or those who are addressing infrequent spikes in demand for transcoding.

Advancements in technology are great, but they really do challenge known business models. In every case there are pros and cons. Education is a key element to helping vendors and customers manage the transitions. I anticipate we will see further communication from Adobe about the benefits of Creative Cloud. Hopefully we also see a model for helping existing Creative Suite users migrate to Creative Cloud.

What's your perspective?

Did you attend Second Screen Sunday at NAB? Unfortunately, I was not able to attend, but I was impressed that such an event emerged around NAB. I heard that attendance was fantastic and that the topics were extremely relevant! 

The impact of social media and the use of the second screen continues to drive new opportunities for content creators, broadcasters, networks and others. What's now called the second screen, used to be the newspaper or a favorite book - or family. It's any of those things that we do while we are watching TV. The difference now is that the "distraction" is digital. This allows all of those in the TV supply chain an opportunity to attract viewers to their program rather than allow them to be distracted by unrelated activities.

I was checking out some second screen options while at NAB. I was quite interested in KIT Digital's 2Si, the latest version of their social discovery platform. As discovery and engagement are the two key activities driving second screen activity, I was curious as to what KIT was doing that was so intriguing. I quickly found out that the program guide aspect was similar to other apps, meaning your smartphone or tablet, can be used to find appealing content based on your interests or those of your social network. However, what stood out was the ability for users to save ads. I found this oddly compelling. Imagine you are watching your favorite series and a ad pops up related to the destination, say Rome, but you don't want to interrupt your viewing experience due to the plot line. 2Si allows you to save the ad for future review.

I think this is a game changer. Today we are bombarded with ads on TV, online and on our mobile devices. Honestly, most of us just tune them out unless we are watching the Super Bowl or there is something really amazing happening in the ad. However, how many times have you been in a conversation with a friend and tried to remember the ad you saw about a product, place or service? I know this is happened to me frequently over the years. 2Si would allow me to go back and view my saved ads.

Now take this one step further, you're an advertiser (either agency or brand) and you want to segment your audience to understand their behavior. You now have access to critical data points - the user that cared enough to save the ad, that went back to view it and possibly took action. This is a smart evolution of the integration of advertising and the second screen. I'll be eager to see how Kit Digital's customer base deploys this solution.

What's your perspective?

Continuing my thoughts from attending NAB earlier this month, digital asset management continues to increase in relevance as media companies face challenges for distributing content across multiple channels. My business alma mater, HP, entered the space with its acquisition of Autonomy. The Autonomy Virage MediaBin is force to be reckoned with. I was intrigued by the demo as it automatically generated metadata from the audio and video that was playing. This key feature allows users to reduce time-consuming asset tagging and focus on defining unique metadata to simplify future asset retrieval.

Like other vendors such as OpenText or North Plains, HP's asset management solutions focus on enabling creative teams to develop, manage and deliver engaging content using video, audio, images and text. And, of course they want to do it quickly and easily. The incremental value provided by HP comes from the Autonomy Intelligent Data Operating Layer (IDOL). IDOL not only extracts key concepts to facilitate asset tagging, it also cross references assets with other forms of relevant data. This includes asset elements such as topics discussed, speaker/artist identity and gender or emotions contained within the conversation. Therefore assets are ingested and stored with a greater range of tagging and metadata, simplifying future access for creation of news stories, ad campaigns or marketing programs. 

Seeing is believing and in watching the demo, I could see how "smart" this solution is. The auto-tagging capability was mesmerizing to watch. Broadcast media, as well as advertising and publishing companies, face increasing challenges when it comes to ingesting, storing and retrieving assets to create on-air, print, online or mobile app content - all with to goal of monetization. Managing workflow is a baseline requirement with asset search and retrieval as a critical element.  As the saying goes garbage in = garbage out.  HP Autonomy may actually be figuring out how to dispose of the garbage and simplify asset management.

What's your perspective?

NAB provides an opportunity to view emerging solutions addressing the needs of the broadcast and media industries. Cloud computing has been a topic of conversation for the past few years, yet it did not seem to be a mainstream solution. Last year, every storage vendor was talking cloud and it was the first year for a "cloud pavilion" on the show floor.  The progress over the past 12 months is incremental at best, yet cloud solutions do continue find traction, as do enabling technologies (more on this in a future blog).

The media industry is rife with software-based solutions for editing, transcoding and digital asset management. In fact, the shift to file-based workflows is still ongoing. This transition is the only reason broadcasters can even think about alternative remote production solutions, lowering their costs for producing and delivering live sports and entertainment. While the current focus for this topic is still squarely on decreasing the OB van footprint, initial forays into the cloud are focused on enabling collaborative content creation. Two options that represent different approaches for cloud-based workflow and collaboration are: 

Forbidden Technologies' FORscene: This post-production toolkit is a Software-as-a Service platform that enables cloud-based workflow collaboration around centrally stored content. However, it is not just cloud-based storage, the intuitive interface provides the tools for content ingest, logging, frame-accurate editing, and content reviews and approvals. FORScene has been on the scene since 2004 and has proven that cloud-based workflows can work and provide measurable value to content producers.  Others capitalizing on this trend include, Adobe and Avid.  Their Adobe Anywhere and Interplay Sphere solutions address the collaboration needs geographically distributed professionals. However, both solutions still seem to require on-premise hardware and software, Forbidden Technologies does not.

Microsoft Windows Azure Media Services: This cloud-based media platform enables media companies to develop their own solution for ingesting, processing, managing and delivering media content. The demo at NAB captured real-time content, encoded the content and presented it in "typical" user interface for editing and delivery. It leverages Microsoft's investment in Windows Azure to provide media processes (e.g., ingest content; encode, convert and generate media assets; log and tag assets) and Windows IIS Media Services to enable content delivery. The flexibility of the platform will be appealing to media companies that want to create their own cloud-based platform for managing assets.

In both cases the challenge is the ingest of high quality content. Each option is dependent on the use of low-res proxies for editing. Advances in codecs and bandwidth availability continue to accelerate the adoption of alternative solutions. For true disruption to occur, both types of solutions will need to address the demands of live content and the requirements for delivering GBs of content. Why focus on cloud? Across the media industry, beyond broadcast, the requirements for streamlining access to assets, collaborating across work teams, distributing to multiple outlets are creating new challenges. Solutions that can address the demanding requirements of broadcast prove that emerging technologies can facilitate cost effective improvements for managing and distributing digital media.

What's your perspective?

The National Association of Broadcast convention was last week in Las Vegas. I've been attending this event for over 10 years, always viewing this industry from an IT perspective. This is natural given that I was working for HP when I first attended the event. The broadcast industry is perhaps the last industry to fully embrace IT based solutions to enable its core infrastructure. This is an industry of proprietary, purpose built products that manage the capture, ingest, management and distribution of content. Yet, the target audience consuming their product - content - has eagerly adopted alternative models for consumption, putting the broadcast industry (and all the vendors who serve it) on notice.

I was speaking with a colleague while waiting for my plane home. He had not been to NAB for a few years and commented on how little had really changed. Sure, this year there were many demos around Ultra HD. Sure, this industry is shifting certain aspects of its workflow into the cloud (in fact, they've been a bit slower than other industries due to concerns about the security of content). And, yes, social media is definitely changing the face of broadcast. But my colleague was right - there wasn't anything that really WOWED me. However there were some subtleties that I found interesting.

The first was simply in how several traditional vendors sought to "re-brand" themselves. An article in Broadcast Engineering, last week, challenged traditional vendors to "adapt or die". Many of the vendors referenced in this article, Grass Valley, Harris, EVS, Snell & Wilcox, Sony, Quantel, are those whose exhibits reflected a face lift. Grass Valley, always front and center in the South Hall, has moved away from the traditional black booth highlighted in green to a white and green facade. However, this cosmetic shift does not change the fact the Grass Valley still makes kick-ass proprietary products. These products serve important functions within broadcast environments, but with the exception of GV Stratus and Edius, they are proprietary and purpose built hardware products. They lack the flexibility to enable broadcasters to extend their reach to online or mobile audiences. 

Other vendors are emphasizing their ability to fulfill on-demand, online content distribution through the use of the "play" button in their marketing. They've adopted lighter, brighter booths implying the openness of the internet versus the dark production environment of broadcast studios. Yet, the proof is in the flexibility and adaptability of products and solutions, not in the marketing.

The challenge facing the industry is how to remain relevant in a world with a 24x7 news cycle, on-demand content expectations and uncertainty as to how revenue models will evolve. It takes more than a face lift to address these issues. Solutions from Forbidden Technologies, Kit Digital, Microsoft, Harmonic  and other more IT centric vendors show the flexibilities that will help broadcasters move forward. Traditional graphics vendors like Vizrt and Chyron, while facing their own challenges, are reflecting their appreciation of audience demand by expanding their partnerships to include social TV and social media technologies.  

Upcoming blogs will focus on the impact of cloud, social and mobile apps on this industry that, honestly, we cannot live without.

What's your perspective?

Earlier this month Netflix released its Q4'2012 financial results. They beat the "street" forecast for subscriber growth and revenue. Yet there are relevant concerns about Netflix's ability to sustain both metrics. This makes the success of their production and release of "House of Cards" even more compelling. Netflix's goal is simple - improve customer acquisition. The strategy to achieve the goal is more complex. It's all about the content. Netflix is known for its streaming content. They are dependent on relationships with content producers such as Disney, CBS, Fox and Lionsgate to stream popular series and drive longtail revenue for the producers of these series. However, Netflix is changing the game by entering into deals for original content such as "Lilliehammer", "House of Cards", new "Arrested Development" episodes and the recently announced "Sense8"

Netflix is a perfect example of data driven content decisions. Unlike their broadcast brethren, Netflix does not depend on Nielsen to measure the success of a program. They can accurately measure how many people watch a program, in full or in part. Their content decisions are based on how many people they think will watch a program as part of their subscription. In the case of "House of Cards", they used data such as 

     - what types of subscribers watched the original BBC series

     - how did subscribers watch - on TV, online, on a mobile device/tablet?  And, did they watch it straight through or did they pause, fast foward or rewind the content?

     - when & what did subscribers watch

     - what content did subscribers watch that involved the proposed actor, Kevin Spacey?

The Netflix advantage is their direct relationship with their subscriber base.  They have access to data that can influence actor selection, plot, special effects, location and more. Netflix can also choose how to release the series. In the case of both "Lilliehammer" and "House of Cards", Netflix chose to release the entire series at the same time. The result was binge consumption of the addictive programs.

Why is this relevant to the media industry or other industries? It is an example of how data reveals customer behavior and desires. With the insight that can be gained through the capture and analysis of data, brands can create content that compels customers to take action. Those actions will, ultimately, result in increased revenue. The conundrum for creative types is to strike the balance between inspiration and customer demand.

All the data in the world is useless if we can't make any sense of it. We can capture demographics, usage behavior, interests, buying patterns, etc. Thanks t our voluntary sharing of information via social networks and search engines, their is an astounding amount of customer data available.  This allows us to add context to the formerly stark data we've been collecting for years. We can see influences and understand rationale behind choices made.

In the media industry, we've seen the rise of formulaic vampire programs thanks to the popularity of "The Twilight Saga". Sure, these programs attract viewers and the related, necessary, advertising revenue. What viewer need do they fulfill?  Are they original? Or, does that even matter? Does the rise of data driven content creation improve the quality of content?  Honestly, I doubt it (although I did enjoy "House of Cards"!). Data driven content provides content producers with the ability to more accurately forecast their financial return. Media & entertainment is a business. However, I'd just like to believe, even for a few moments, that truly original content is still appreciated.

What's your perspective?

Before anyone pursues a marketing, sales or product strategy, they collect data. It is data about the market and its trends or needs. It's data about the prospective customer - who are they, where are they, what are their needs? It's data about competitors, their products, their go-to-market strategy, their offer. We collect all this data, and more, to validate our goals and align our strategies.  We desire sales leads, web traffic, sales. We want to understand our position relative to the market, customers and competition.

We've been collecting data for ages. We have gigabytes and petabytes of data, but often we don't know what to do with it. We know we should be utilizing it to support marketing plans and product roadmaps. We collect even more data by deploying social media monitoring solutions, but we can't prioritize actions. We are buried in data - yet Big Data is the Big Buzzword across every industry. The IT industry loves it as it provides them with new solutions for their customers. The promote storage, business intelligence and analytics. Manufacturing, financial services, media, consumer goods and hospitality businesses are interested in any opportunity to better understand their customers and sell more products or services.

So, now we have all this data. What are we going to do with it. Is it even the right data? Can we analyze the data to prioritize customer requirements and then adapt product, marketing and sales strategies to meet those requirements? If we're trying to sell widgets, do we understand how our customers are using those widgets? Have we collected the data that will tell us how our customers want to sell them widgets? This is the potential power of Big Data.

The who, what, where, why and when is the holy grail of Big Data. Understanding the context of that data is the challenge that must be overcome. Sifting through the mounds of data to eliminate that data which is irrelevant is critical. Using human skills to assess the meaning behind a Facebook post or Tweet and then correlating that to other comments can reveal the actionable data (note, not Big Data) needed to develop the right programs to influence customer behavior.

Data has hidden narratives that with the right analysis reveal the story that will compel customers to take action. We can capture and map the data, but we don't always see the underlying story. There is great value in data driven content creation. Social media provides even more customer touch points. It provides marketers with the ability to intelligently segment their customers based on contextual and cultural insight. Don't just settle for a Big Data solution. Consider what data you really need to drive tangible results. Take a step back and consider what kind of data can really impact your strategy.

What's your perspective?

There has been a lot of discussion about the impact of mobile devices on the TV business model. This is not just hype, it is based in facts about how we, the mass public, consume content. Multi-platform consumption is the new normal. Where just a few years ago, media properties were focused on their internet and mobile web presence they are now investing in the development of mobile apps. Content is viewed and, if compelling enough, shared via social networks. Consumers are demanding content that is aggregated and pushed to them based on their personal interests.

This shift in consumption has arisen thanks to  three factors.

1. DEVICE ADOPTION

More than 50% of U.S mobile consumers now own a smartphone. According to DigiTimes, tablet shipments will surpass Notebook shipments in 2013. For the TV industry this is notable as tablet users having a higher propensity to engage in more involved media behaviors, such as visits to photo and video sharing sites or watching long form video.

2. NETWORK CAPACITY

Content distribution, be it across the internet or mobile networks, has always been limited by bandwidth. The increasing availability of WiFi has eased the burden on wireless networks, enabling consumers to access social networks, games, email and video on the go.  while the performance of these networks continues to improve thanks to 4G and LTE technology.  The Cisco Visual Networking Index indicates that mobile video traffic exceeded 50% of all mobile traffic in 2012. More importantly, by 2017 2/3 of the world's mobile data traffic will be video.

3. APP DEVELOPMENT

According to a Compuware Study, 85% of users prefer mobile apps over mobile websites.  Why? Because, they believe that apps are more convenient, faster and provide a better user experience. For media properties, the dilemma is more complex. They must balance development costs (different apps for each device operating system), support costs, potential revenue share versus user experience and performance. Any smartphone or tablet user can access a mobile website, while apps must be downloaded. This raises the possibility that users who make the effort to download apps are actually more invested in the content provided by the app. However, if that app does not meet performance or content expectations, 48% of users will abandon the app.

CLOSING THOUGHTS

If you are a media property, your strategy must include mobile. Media companies can expand their reach by 29% through their use of mobile channels. It offers additional advertising revenue opportunities. It increases consumer engagement. Yet, even as mobile is currently drawing attention as a consumption channel, it also has the power to capture and distribute content. In an age of increasing user generated content, the smartphone has the ability to become our eye on the world. It is cost effective and easy to use. The constantly improving mobile network allows us to share any kind of video content, on the fly. Our quality expectations have adapted based on our understanding of where the content originated. So, even as the the TV industry focuses on HD, user generated content via mobile devices may indeed be the future.

What's your perspective?

Today, Social TV is about second screen interaction related to the program being watched on-air. That interaction takes the form of textual posts on existing social networks, apps like Viggle or Miso, interaction on network branded platforms (provided by the likes of zeebox, Magic Ruby, Echo and others), and discovery via apps from Buddy TV, Dijit or TV Guide. Programs from networks like USA support engagement in the form of quizzes, pictures and engaging posts. 

There are also Social TV solutions that primarily focus on enhancing the delivery of live TV programming (e.g., Never.no and Tellybug). They curate and incorporate social content into the presentation of sports, news and chat programs, with integration into the broadcasters actual production workflow.

None of these Social TV solutions, to my knowledge, integrate video. What if consumers are chatting about a show using Facebook's video chat? What if super fans want to contribute video "selfies" expressing their opinion? Does this add to the consumer experience? I believe it provides a deeper level of engagement for the fan. With the continuous growth of online video and user generated content, I wonder if this is the next phase of Social TV - which is just gaining momentum? Video could enable the true water cooler experience, yet definitely introduces challenges for delivery and format (to name a few!).

This is just a thought on my part, prompted by some cool video technology that I've been exposed to recently.  I'd love to know your thoughts!

What's your perspective?

I taught an introductory LinkedIn class last night for my local Continuing Education program. My audience represented LinkedIn's core user base, adults ages 35-55. My goal was to help them better understand how LinkedIn can hep them achieve their business goals, whether that is getting a new job or generating more business. It was also an educational experience for me - a huge fan of LinkedIn.

i learned the following:

     - Writing a good summary is intimidating for most users. I'm not completely surprised by this. My summary has been developed over time, based on my own investigations on how to best optimize LinkedIn. While we all understand that LinkedIn is complementary to a resume/CV, it is often difficult to find the words that best reflect our professional journey, how we interact with clients or the value we provide as professionals.

     - LinkedIn Groups may be the most underestimated benefit of the social network. I'm a fan of groups as I generally find them to be great sources of information. Yes, there can be a lot of spam in groups as unscrupulous individuals post random content regarding crazy business opportunities or promotion of irrelevant topics. However, the power of engaging with the group is exemplified through the engagement between and the support amongst members. There is no such thing as a "silly question" - groups typically provide good insights and guidance to fellow members. Groups are a great opportunity to expand your knowledge and your network.

     - LinkedIn is best used by business professionals. I suppose this obvious, yet there we several educators present last night. One was an administrator, the other a former teacher. Both were seeking options to expand their networks to gather information and understand non-education sector opportunities. Sadly, we could not find any groups that could offer them tangible value, unless they wanted to pursue corporate training as a career. LinkedIn is doing a great job creating options that will attract students. Perhaps there is also room to develop solutions that will help those in the education sector.

As always, no single social network is the be all end all. It often takes a combination of networks or tools to achieve your goals. These options could include the primary social networks, plus online tools like Meetup.com. The value LinkedIn does provide is a mechanism to manage all of your contacts. Whether we network online or in person, maintaining the connection can be difficult. LinkedIn provides a framework for managing relationships for the long term, regardless of changes in the roles or the employers of each user.

I look forward to additional opportunities to engage with LinkedIn users. The top industries reflected on LinkedIn are currently high tech (no surprise), retail & consumer, professional services and oil & energy. Financial services is emerging. What's next?

What's your perspective?