Andrew Anderson is Head of Broadcast Operations, Seven West Media. He is also an APB panellist.
By Andrew Anderson
More and more, TV operations are under cost pressure.
The fragmenting market that we all talk about has reduced audiences across many platforms and the once ‘guaranteed licence to print money’ free-to-air television broadcasters now appear to attract a smaller mass audience than 10 years ago. Commercial television sells eyeballs and the less eyeballs the less revenue, and the less revenue the closer the earnings margin.
The TV business must adapt; however for some, this may not be happening quickly enough or in the right areas.
It is a simple equation. A TV broad-caster curates, markets and delivers content to the largest audience possible, and then sells airtime in that content that advertisers can use to build brand and market share. A broadcaster must curate content that a mass audience will want, and market and present it such that the audience will consume that content, including the commercials, and enjoy or appreciate the experience.
Strangely, the business model of Internet-based content providers is exactly the same. An advantage that these companies have is the consumption of the content which is, in many ways, more convenient and therefore can potentially be more enjoyable than what is currently offered by a broadcaster.
Minimum or no commercial breaks, very high quality content and a personal schedule are just some of the other advantages that Internet-based con-tent providers have over broadcasters.
In the last decade, several forms of content on television no longer attract large audiences on broadcast television. The Sunday Night Movie and the stripped nightly or weekly drama series are two types of content that are now more often streamed rather than broadcasted.
Broadcasters and advertisers in Australia have had to get used to the highest cost-point drama series attracting half the audience than 10 years ago.
In the same decade, broadcast television in Australia has also increased channel count and airtime inventory in order to keep increasing revenue. This has been done in the face of a reducing and fragmenting audience and has, at best, kept the revenue flat since 2008.
Programmers use every trick in the book to ensure that the measurement of an audience is maximised with overrunning programming, last-minute schedule changes and flexible starting times.
In addition, breaks have grown longer and longer with the manipulation of the content for more airtime for promotion and marketing.
The upside is more promotion but the downside are four- to five-minute commercial breaks, which are making some programming more difficult to consume.
When I was growing up in the 1960s and ’70s, commercial breaks were fun to watch. The rise of the 15-second spot, coupled with four-minute breaks, means the ad count in a break can be more than 15, which to the audience makes the break feel even longer.
On the content side, smaller audiences does not mean smaller rights costs. Live sports, one of the few truly mass audience programming, is more expensive than ever. News and current affairs usually occupy the number one and two positions of the nightly ratings, yet to advertisers these audiences are not necessarily lucrative.
The common instruction from finance departments is “we need to work smarter” or “we need to do more with less”. The bottom line is we have to change to protect the bottom line and any changes have to be carried out without any adverse effect on the product. In fact, the product has to be better in such a competitive environment.
In operations, innovation is the only driver of cost savings, other than reducing operations by reducing the product.
TV broadcast operations can be split into two distinct areas — day-of-air broadcast, which accounts for television playout of news and cur-rent affairs; and the long-form sports and entertainment production.
Over the years, television playout has been automated and digitised to the point where human intervention is only necessary where ultimate re-active playout is required. Even then, the tools available make it possible for one person to control upwards of four channels simultaneously.
Whether in-house or outsourced, the fundamental human element of television playout remains the same. Cost models on both are probably reviewed by broadcasters every other year, with perhaps a consolidation of playout the only likely avenue for a reduction in playout costs.
Television production operations, specifically shiny floor programming and sports programming, are usually quite standard operations that are people and facility rich, and are based on the scope of the storytelling and the budget that the executive producer has to utilise.
Innovation, particularly in the IP production tools available today, is allowing high-scale sports production to be centrally produced, while the “camera-cut” and commentary facilities are the only requirements on-site.
Globally, Telstra has recently announced its Digital Production Network (DPM), which is a 100Gbps high-volume data network allowing the interconnectivity required for central production control of sporting venues. NEP Australia will be one of the first to utilise this exciting technology in Australia and the models predict significant operational savings on the productions that utilise this new model.
It is strange to be discussing operations in an article that perhaps normally addresses the next big technology that will drive viewing experience or production enhancement. It says a lot about the current environment and the current ability to dazzle existing audiences with HD, 4K/Ultra HD (UHD) and the like.
The challenge for all broadcasters is to remain relevant, keep the mass audience by providing compelling, exclusive storytelling and monetise that audience without damaging the relationship with either the audience or the advertisers.
For television operations management, that storytelling needs to be done within the cost parameters of this new and challenging environment.