In an increasingly fragmented marketplace, industry promises to provide flexibility, IP interoperability, and new revenue streams; opportunities to innovate, and the ability to compete in a mobile world.

These are exciting and challenging times. Broadcasters and other segments of the media and entertainment (M&E) ecosystem are facing multiple technology transitions, each with wide-ranging implications for the overall health and competitive standing of their organizations. How will media companies navigate these impactful and simultaneous technology evolutions? How far are they in their journey toward a more flexible, agile, and higher-performing infrastructure? Are these transitions interrelated? How quickly should media companies move toward the next milestone in the evolution of their operations?

This Report provides an up-to-date account of the status of ongoing technology transitions, as well as insight into how swiftly and in what direction broadcasters and other media companies will move to modernize their production, playout, distribution, and advertising operations.

Technology transitions are hardly new to media professionals. Running parallel to the history of the broadcast industry is a contiguous series of technology advances, including the transition from black-and-white to color, analog to digital, and SD to HD. But never before have all segments of the M&E industry been required to deal with so many simultaneous technology changeovers, some bringing unprecedented degrees of disruption. The now-inevitable transition to IP-based facilities requires the crossing of a cultural chasm that many believe may be even wider than the technological one.

Each of these technology transitions will impact, to some degree, nearly all broadcasters and other media companies. Their successful adoption over the next several years is critical to media companies that hope to keep pace with a rapidly evolving ecosystem.

Nearly every aspect of the industry is in flux – consumers are watching more and more video programming outside of appointed time schedules, and they are utilizing a growing diversity of devices and delivery channels to consume that programming. At the same time, a steadily increasing number of content owners are obliterating long-standing competitive boundaries and disrupting supply chain relationships by delivering video content directly to consumers.

The industry has reached a consensus on the need to inject unprecedented agility into existing video production, playout, and distribution operations to meet future demands and expand monetization opportunities. In an increasingly fragmented marketplace, the industry promises to provide flexibility, IP interoperability, and new revenue streams; opportunities to innovate, and the ability to compete in a mobile world.

SDI to IP

As technology transitions go, adapting traditional media operations to an IP-based infrastructure built on generic compute and networking resources is not trivial. As much as media professionals over the decades have been conditioned to adjust to a steady stream of technology changeover, the transfer of all operations to a packet-based environment is not your garden-variety transition. The scope of this technology shift extends beyond the usual cost and operational transparency issues presented by more modest transitions.

In fact, roughly half of the media professionals indicate that cultural issues, such as acquiring new skill sets and increased integration into the organization's IT practice, pose more of an obstacle than technology issues. Industry experts shares similar view of the technology/cultural issue as the overall survey universe. By almost the same proportion, they consider non-technical aspects of the migration of operations to IP to be nearly as important as technology challenges. This suggests that broadcasters and others should take into consideration the importance of change management and personnel issues when mapping out an SDI-to-IP transition strategy.

Transition status. A fact that often gets overlooked in conversations concerning the IP transition is that most media companies have already moved a portion of their operations to IT-based environments. The incorporation of any file-based operation into your workflows, including asset management or editing, is technically a step down the all-IP path. It is the propensity of media professionals to disregard file-based workflows as part of the IP transition that most likely accounts for the 22 percent of industry professionals who indicated that they have transitioned zero percent of their operations to IP. These findings enforce the fact that many broadcasters and other media companies strongly associate the move to IP with the processing, transport, or playout of live/linear video and audio streams. The sports and live market segment produced the highest percentage of responses. Nearly 50 percent of media professionals in that market segment have yet to make a move to IP and 27 percent companies have not started a transition to IP.

Business drivers. Increased agility, technology future-proofing, reduction of operational expenses, and leveraging the sizeable economies of scale of the IT industry are often cited as major motivations for moving operations to IP. Most of the media professionals identify the three most important reasons to move operations to IP; a small majority selected added agility and flexibility to Introduce new services and sources of revenue. This provides a strong indication that while realizing cost efficiencies and better conditioning infrastructures for future technology, upgrades are important incentives for moving operations to IP. Many M&E companies recognize new monetization opportunities as the primary objective of moving to more agile infrastructures. The importance of IT-related benefits was highly rated, such as leveraging economies of scale, which fell into the 25 percent range. It is logical to attribute the falloff in enthusiasm for IT-based benefits to reservations harbored by media professionals about the suitability of IT infrastructure to handle media operations, especially when live programming is involved.

Concerns. Concerns associated with transition to IP do not indicate a large degree of anxiousness over moving operations to IT-based platforms. Media professionals are still largely unfamiliar with IT-based operations and do not yet see the approaching fusion of IT and media operations as delivering notable benefits or as raising significant concerns. Major concern is related to the expense of infrastructure upgrade and operational disruptions – considerations that are historically associated with all technology transitions. 33 percent of media professionals expressed apprehensiveness about quality degradation resulting from transfer of operations to an IP-based infrastructure. This suggests a possible decrease in concern about performance-degrading latency in live programming environments.

SDI-IP Hybrid

Focus-Forward

The industry has reached a consensus on the importance of a carefully planned transition to an all-IP facility. Few, if any, media companies are in a position to swap out the remaining portions of their SDI-based plants overnight. Instead, most broadcasters and other media companies will maintain hybrid SDI-IP facilities for the foreseeable future, allowing them to avoid stranding existing investments and better manage the transition of operations.

A small number of professionals indicated that adherence to industry standards was the top requirement of a hybrid SDI-IP transition strategy. The strong showing of this attribute indicates that survey takers understand the important role played by standards in facilitating a smooth transition to IP. In addition, they recognize that industry standards provide an open and interoperable alternative to proprietary approaches that hinder innovation and block media companies from exploiting the economic and performance benefits of an open and large marketplace. Standards are vital to fostering healthy competition and providing broadcasters and other media companies with technology choices.

These findings also validate the significance of the founding of the Alliance for IP Media Solutions (AIMS), a trade association dedicated to advancing the adoption of industry standards for the transmission of video, audio, and ancillary information over IP infrastructure, as well as products based on those standards. AIMS works with industry standards organizations, including the Video Services Forum (VSF), the Society of Motion Picture and Television Engineers (SMPTE), and the European Broadcasting Union (EBU) to facilitate the industry's transition from SDI to IP through interoperable solutions that enable the rapid evolution to open, agile, and versatile production environments.

Media professionals also expressed significant support, in descending order, for a transitional infrastructure that preserves existing investment in SDI infrastructure, does not introduce operational disruptions, and is compatible with familiar SDI management and monitoring tools. Surprisingly, the vast majority of survey respondents did not identify the ability to facilitate an SDI-IP transition on a self-controlled timetable as an important characteristic of a hybrid transition strategy.

Timeline. A small number, i.e., 20 percent of respondents estimated that nearly all of their SDI-based operations would be transitioned to IP within the next 2 years. Twice that number, 41 percent, estimate that their all-IP infrastructures will be completed or nearly completed in the 2–5 year timeframe, with 33 percent indicating that the span of the transition will stretch out to 5–10 years. The fact that 94 percent placed a decade-long cap on the duration of the transition reflects widely held assumptions that media companies will transition, not in lockstep, but in accordance with numerous company-specific factors over a window of time consistent with most major technology evolutions and in line with traditional technology refresh cycles.

Hardware-Centric to Virtualized Environments

Some media companies are already discovering that the transition of their operations from purpose-built hardware to software-centric, or software-only, environments is resulting in dramatic increases in flexibility and versatility. Severing dependency on specialized hardware frees up broadcasters to move operations to generic, industry-standard computing resources, a catalyst for introducing an array of cost-savings and agility improving benefits. In virtualized environments, including private and public clouds; media companies, for example, can launch new channels in a fraction of time – and at a fraction of cost – typical of a hardware-based environment. Execution of traditional applications, such as master control and disaster recovery to ensure business continuity, can be executed in a remote datacenter, severely reducing costs and eliminating geographical constraints.

Technology trends survey indicates that a significant percentage of companies are well down the path of transitioning operations from dedicated hardware to generic computing resources. Nearly 30 percent of media professionals indicated that between 25 and 50 percent of their operations had been transitioned to virtualized environments.

Nearly 20 percent companies from Africa still have to adopt virtual while about 15 percent professionals in North America, South America and the Caribbean, Middle-East, Europe and Asia report the same. Central America is the most aggressive adopter of virtualized operational environments, according to the survey, with 93 companies indicating they have taken some steps toward software-based operations.

Concerns. Security was more of a concern for media companies moving operations to virtualized environments than to IP, despite the considerable overlap between the two technology evolutions. More than half of the respondents identified security as a major concern. The prospect of moving operations to the cloud continues to raise red flags among media professionals despite the fact that some studies suggest that storing information in large datacenters operated by large IT companies delivers better protection of data than corporate owned and operated facilities. Operational disruptions and failures difficult to diagnose are another concern for companies. The need to acquire new skill sets and a lack of required standards were at the bottom of the list of concerns associated with transitioning operations to cloud and other software-based environments.

Transition priority. Similar to the transition from SDI to IP, broadcasters and other media companies will move operations to software-only, virtualized environments in increments and as conditions, such as costs and performance requirements, dictate. Media professionals are putting signal routing at the bottom of their timetable for shifting processes from specialized platforms to generic computing and networking resources. The transport and manipulation of video and audio essences are understandably considered the most susceptible to disruption, if relocated to a virtualized operations environment. That distribution encoding/decoding is at the top of the transition list is also in line with reasonable expectations. Successful commercial cloud-based encoding services, such as those offered by Microsoft Azure, have been providing media professionals with peace of mind for more than a year that they can safely outsource some of the heavy lifting of their distribution operations to virtualized environments. Master control, which is synonymous with delivering live/linear programing, is understandably low on the list of operations to make the move to virtualized environments for the same reasons as signal routing.

Cloud playout. Most of the companies viewed cloud-based playout operations as being suitable for hosting revenue-generating services, channel launches, business continuity applications, and disaster recovery. Only a few companies expressed reservations about the viability of a cloud playout environment for any operation. Security was a major concern for those who assert that neither channel launches nor business continuity applications were suitable for the cloud.

HD to UHD

On the surface, the transition from HD to Ultra HD (UHD) seems like the most pedestrian of all the technology transitions confronting media professionals. The broadcast industry is marked by continuous advancements in resolution and picture quality – part of a never-ending quest to deliver consumers as-if-you-were-there experiences over the display devices of their choice. But when and how to move to higher resolutions and adopt advanced compression schemes may turn out to be the most difficult riddle for media companies to solve in coming years

The major complication is that the move to UHD and HEVC is gated by a number of variables. For starters, there is the penetration issue. Exactly how many consumers have the display devices, set-top boxes, and bandwidth to view UHD content or decode HEVC streams? Fitting enough puzzle pieces together to get an accurate picture of UHD's potential may take longer than many observers believe.

Nearly half of the professionals estimate that it will be more than two years before market demand is large enough to justify significant investment in UHD-based technologies. The regions that expressed the most concern about the near-term market demand for UHD were Africa and Central America. Only 39 percent of media professionals in South America and the Caribbean believe that it will take more than two years for UHD to warrant significant investment. In terms of market segments, 55 percent of TV broadcasters believe sufficient UHD demand is more than two years away. Companies working for content distributors and post-production houses most frequently indicated that demand for UHD is currently strong. While UHD is only now showing up in live broadcasts, the higher resolution format has been used extensively in cinematic settings for more than a year.

UHD and IP

Much has been made in recent months of the catalytic impact of the upgrade to UHD on the transition of all operations to IP. Many media professionals are still reconciling the relationship between UHD and IP. The critical question: should media companies synchronize their transition to UHD with a move to IP and generic computing and networking resources or is SDI still the preferred technology for UHD? By a margin of 10 percentage points, respondents believe that the transitions to IP and UHD are interrelated, as opposed to completely independent technology transitions.
20 percent of companies indicated that they expect all UHD operations to remain in the SDI domain for the foreseeable future.
35 percent of companies plan to support UHD in an IP realm from day one. Most of the major companies will eventually transition UHD workflows to an all-IP domain from either an SDI-only or hybrid SDI-IP infrastructure.

HEVC

HEVC is widely linked to UHD. But HEVC on its own offers media companies immediate business-improving benefits. When applied to HD, or even SD content, HEVC gives media companies more bang for their bandwidth buck. HEVC's superior compression ratio allows distributors to nearly halve their storage and bandwidth requirements without sacrificing video quality or customer experience. It also enables them to upgrade customer experience by delivering content of twice the quality over the same connection. By all indications, though, HEVC is largely still sitting on the sidelines.

A significant majority of respondents indicates no use of HEVC in any capacity. A slightly larger universe of respondents within the TV broadcast market segment indicates that HEVC is not currently part of their operations. 38 percent of professionals are using HEVC in their facilities, professionals at Post Production facilities made up a large percentage of those who are using HEVC only with UHD content.

Moving Forward

Though technology transitions profiled here can be addressed independently, broadcasters and other media companies are likely to tackle some, or even all, of these evolutions simultaneously. As the findings indicate, considerable overlap and interdependencies exist across these technologies. More than half of all respondents view the transition from HD to UHD as tightly tied to the adoption of IP-based infrastructure. Significant crossover also exists between the transition from SDI to IP and the migration away from purpose-built hardware in favor of executing operations in software-based, virtualized environments.

Both transitions mandate that media companies relocate operations to generic COTS computing and networking platforms. In many respects, the migration of operations from IP-based infrastructure to virtualized settings, such as the cloud, is a logical next step down a common evolutionary path. A side-by-side comparison of these two transitions indicates that media companies are moving to IP-based infrastructures at about the same pace they are moving operations from purpose-built hardware into virtualized, software-based environments. Courtesy: Imagine Communications