Outsource to Insource
06/12/2019
This article first appeared in Content & Technology Asia magazine, the original version is available here: Outsource - Insource
The Rise of Outsourcing Outsourcing is the slightly ugly portmanteau of outside' and resourcing' which has sadly, and probably wrongly, become synonymous with large, private firms making lots of money by providing services to publicly funded government bodies. Actually, it's unlikely that these outsourced capabilities would be any more cost effective if they were managed internally as a public service function, but broadly there is the perception that the outsourced service provider has the best end of the deal.
In our industry, broadcasters started outsourcing the linear playout function in the 90's - leading to a significant number of service providers springing up or divesting from the bigger broadcasters. These new service providers could make a simple economies of scale business case to investors - because playout is largely the same for broadcaster A as it is for broadcaster B, by centralising the function they could provide services to both broadcaster A and B without a proportional rise in cost.
This model also offered the potential for external service providers to increase their earnings by providing additional services, particularly mandated services - including subtitling, audio description and visual signing The unspoken view was that, once broadcaster A was signed up for five-year term for playout, they would also be locked in for the provision of as-yet unforeseen and, crucially, un-priced ancillary services which may be mandatory in the future. This opportunity has grown significantly in recent years with commercially motivated ancillary services from red button' to OTT (Over the Top) becoming an increasingly important part of the broadcaster's offering.
The outsourcing model quickly spread further up the production chain - to content preparation, compliance, versioning, format conversion etc. - and the industry perception was that these service providers had a lucrative business model. But now, as more operators flee the market or go into administration, the question is why did such apparently robust, indeed lopsided, business models fail and what is replacing them?
An Overly Competitive Market Many of the problems stemmed from the basic issue that the supply-side of the market rapidly became too crowded and is, therefore, now overly competitive. The broadcasters, aware that they have the upper hand in the service tendering process, are able drive down the price to barely sustainable levels with one hand, whilst setting out punitive measures for transgressions of operational service levels (which they themselves were unable to achieve when they directly owned the operational function) with the other. Perhaps relying on the promise of the ancillary services upsell opportunity and economies of scale, the service providers accede to these pressures and agree deals that have an attractive top line but a dangerously open-ended set of costs.
Not only do the service providers sign up to tight-margin deals, they also allowed their broadcaster customers to dictate even the technology that is to be used in the provision of service. This has resulted in facilities being forced to run different playout engines and different transmission automation systems for different clients. This completely negates the economy of scale business case and actually drives up costs for resourcing and training. Some of these costs are passed back to the broadcasters so the model in part represents an equipment financing package.
Rushed Implementations = Sub-Optimised Workflows = High Operational Costs Invariably the contract negotiations and award run late, but the commencement of service date does not move - either for a new operation or migration of services. This puts extraordinary pressure on the service provider who can either agree to a compressed implementation schedule or risk losing the deal. Having spent potentially tens of thousands on the bid process already, invariably the service provider will convince themselves that by throwing resources' at the problem they can get the operation on-air in time.
The first casualty of this approach is always the operational business modelling in the context of people, process and data mapped to the services that have been sold. Without a service and operating model there is a rush to buy kit due to those (false) long delivery lead times. But without an operating model the only way to build an operational workflow which can service the contract is with humans, potentially lots of them. The stance on this is that we will build properly defined and automated process as soon as we are in operation and generating revenue, the staffing level is only temporary. In reality, having spent money to get into service, there is reluctance to spend more on what is seen as re-engineering, particularly if this highlights that some of the must-have equipment purchased only weeks before is inappropriate. The staff - usually highly experienced and therefore fairly expensive contractors - are retained and the business model is further compromised. The operation enters service with the provider on the back foot, and then the real pressure starts.
Genuine Partnerships are More Effective than Asymmetric Master / Servant Relationships A modern broadcast' operation, from raw material arrivals to consumer delivery, is complex and becoming increasingly so. But the
Most recent headlines
04/08/2024
Dalet Appoints Santiago Solanas as CEO to Lead Next Era of Growth and Innovation
Dalet, a leading technology and service provider for media-rich organizations, is excited to announce Santiago Solanas as its new Chief Executive Officer (CEO)....
03/06/2024
Dalet and Veritone Reach Agreement to Distribute, Transact and Monetize Media Archives
Dalet, a leading technology and service provider for media-rich organizations, a...
28/04/2024
Mediahaus delivers the first SRT live-streaming sports production over 5G with URSA Broadcast G2
Mediahaus delivers the first SRT live-streaming sports production over 5G with U...
26/04/2024
Sundance Film Festival CDMX 2024 kicks off today at Cinpolis
Sundance Film Festival CDMX 2024 kicks-off today with screenings in 5 theaters in Mexico City and the opening-night film, FRIDA, directed by Carla Guti rrez...
26/04/2024
Interview: Lourdes Portillo, Director of Las madres de la Plaza de Mayo, La Ofrenda
[Editor's Note: This interview is part of a larger feature about the women d...
26/04/2024
Career insights instead of everyday school life
Once again this year, SGL Carbon opened its doors to interested children and young people. On the occasion of the German Girls and Boys Day, which took place on...
26/04/2024
L3Harris Technologies Reports Strong First Quarter 2024 Results, Increases 2024 Profitability Guidance
Orders1 of $5.5 billion; book-to-bill of 1.06x Revenue of $5.2 billion, up 17%,...
26/04/2024
What Makes A Network Resilient?
Five Considerations For Communications Modernization In The 21st Century In the digital-enabled battlespace, the Joint Force needs to shoot, move and communica...
26/04/2024
CBS Sports Launches New Free Streaming Channel
CBS Sports has launched Champions League as a new, 24-hour streaming channel that will serve as the year-round destination for nonstop highlights of the UEFA ...
26/04/2024
Roku Streaming Homes Hit 81.6M
Despite tough competition in the streaming space, Roku reported solid results in Q1 2024, beating revenue expectations, with total net revenue up 19% YoY to $88...
26/04/2024
Sarah Farrell Named General Manager Of Pinewood Toronto Studios
LONDON AND TORONTO Pinewood Toronto Studios has appointed Sarah Farrell as general manager of the Studios in downtown Toronto....
26/04/2024
Quantum to Offer Advanced Filesharing Technology and Performance in StorNext and Myriad Solutions
Quantum to Offer Advanced Filesharing Technology and Performance in StorNext and...
26/04/2024
FilmLight Colour Awards welcomes 2024 entries and introduces new Emerging Talent' award
FilmLight Colour Awards welcomes 2024 entries and introduces new Emerging Talen...
26/04/2024
Picture Shop Announces Chris Evans as Head of Unscripted
Picture Shop Announces Chris Evans as Head of Unscripted Brie Clayton April 26, 2024 0 Comments Picture Shop announced Chris Evans will lead Unscripte...
26/04/2024
Participate in a Survey - The Impact of AI on Media and the Creative Industry
Participate in a Survey - The Impact of AI on Media and the Creative Industry Pascal Wagner April 26, 2024 0 Comments By participating in this survey,...
26/04/2024
Hi Barbie! Mattel Launching First FAST Channels on Samsung TV Plus
Toy maker Mattel said it is working with Samsung to launch its first free ad-supported streaming television (FAST) channels later this year....
26/04/2024
Marty Moe Named President Of Trusted Media Brands
Trusted Media Brands (TMB) said it named Marty Moe as president....
26/04/2024
Ron Howard Directs Jim Henson Documentary for Disney Plus
Ron Howard is the director on Jim Henson Idea Man, a documentary that premieres on Disney Plus May 31. Henson of course created Kermit the Frog, Miss Piggy, Big...
26/04/2024
Kraken Skate Away From RSN Root Sports for Deals With Tegna, Amazon
The ice continues to melt under the regional sports network business as the Seattle Kraken of the National Hockey League have made a long-term deal to broadcast...
26/04/2024
Warner Bros. Discovery Launches Olli First-Party Data Platform
Heading into the upfronts, Warner Bros. Discovery said it launched Olli, a first-party data platform advertiser can use for converged, targeted advertising camp...
26/04/2024
The Equalizer' Gets Season 5 on CBS
CBS has renewed the drama The Equalizer, which will see season five on in 2024-2025. Queen Latifah stars....
26/04/2024
The CW Inks New Deal for Miss USA, Miss Teen USA
The CW has entered into an exclusive multiyear broadcast partnership for the Miss USA Pageant and the Miss Teen USA Pageant. The 73rd Miss USA Pageant will air ...
26/04/2024
Fuse Urging Young Viewers To Vote With Blunt Campaign
Fuse Media isn't mincing words in a campaign urging its young viewers to register and participate in the 2024 elections....
26/04/2024
Neil Gaiman's Sandman' Universe Expands With Dead Boy Detectives'
Dead Boy Detectives, a series from Neil Gaiman about a detective agency staffed by ghosts, debuts on Netflix April 25. George Rexstrew and Jayden Revri are in t...
26/04/2024
The Story Collective opens largest film and TV studio in the heart of London
The Story Collective has gradually repurposed the former Mortlake Brewery to include production offices, workshops and sound stages By Matthew Corrigan Publi...
26/04/2024
Richard Perkett joins Amagi as chief product officer
Perkett joins the company following a 25 year career in product management, product marketing, engineering and user experience (UX) across multiple industries ...
26/04/2024
Teradek Announces Smaller More Robust Built-in Antennas f...
Teradek, the industry leader in wireless video transmitters and receivers, announced today the launch of new Bolt 6 LT 750 and Bolt 6 Monitor Module 750 RX with...
26/04/2024
Amagi Names Richard Perkett Chief Product Officer
NEW YORK Amagi has appointed Richard Perkett chief product officer (CPO)....
26/04/2024
NAB Board Election Results Announced
WASHINGTON, D.C. The National Association of Broadcasters (NAB) has announced the results of the 2024 NAB Radio and Television Board of Directors elections. The...
26/04/2024
Mattel to Launch First FAST Channels on Samsung TV Plus
EL SEGUNDO, Calif. & NEW YORK Mattel has announced a deal to launch its first three 24/7 free ad supported streaming (FAST) channels on Samsung TV Plus, Samsung...
26/04/2024
NextGen TV Launches In Portland, Maine
PORTLAND, Maine Viewers here can now receive the NextGen TV signals of five local stations with the launch of ATSC 3.0 service from host station WPFO, which is ...
26/04/2024
Rogers Inks Agreement to Deploy Comcast's Products and Technologies
TORONTO Rogers Communications has signed a 10-year agreement with Comcast to bring the latest Xfinity products and technology to Canadians....
26/04/2024
Calrec scoops third Argo win with NAB Show Product of the...
Calrec is very pleased to announce the benefits of its highly flexible approach to customer service has been recognized with a third award for the Argo range. T...
26/04/2024
New Adobe Photoshop with Advanced Generative Fill and Generate Image Brings New Superpowers to All
New Adobe Photoshop with Advanced Generative Fill and Generate Image Brings New ...
26/04/2024
Trends And Takeaways From NAB Show 2024
Trends And Takeaways From NAB Show 2024 Melanie Ciotti April 25, 2024 0 Comments NAB's Eric Trabb (right) awards SNS with two NAB Show Product of ...
26/04/2024
Sony's Ci Media Cloud Keeps NHRA Moving
Sony's Ci Media Cloud Keeps NHRA Moving Brie Clayton April 25, 2024 0 Comments Cloud-Based Media Asset Management and Collaboration Platform Accel...
26/04/2024
2024 Emerging Leaders Internship Program Open for Applications, Deadline May 31st
Capitol Broadcasting & Leadership Triangle Collaborate for Third Year Capitol B...
26/04/2024
MIX 101.5 Launches New YouTube Shows
The staff at CBC Radio have been hard at work creating several new features for listeners and viewers. Several debuts are taking place this spring. I have nev...
26/04/2024
Cricket Finds Its Digital Home in Bangladesh: VEON's Banglalink to Stream ICC Cricket on Toffee
26 Apr 2024 Cricket Finds Its Digital Home in Bangladesh: VEON's Banglalink...
26/04/2024
NBA Playoffs 2024: ESPN Rolls Out Huge Production Operation for Busy First Round
NBA Playoffs 2024: ESPN Rolls Out Huge Production Operation for Busy First Round Tech deployments include miked on-field personnel, shot-distance tracking, AR g...
26/04/2024
NHL Stanley Cup Playoffs: ESPN Ops Team Navigates Both Sides of the Border With Canadian Teams' Strong Showing
NHL Stanley Cup Playoffs: ESPN Ops Team Navigates Both Sides of the Border With ...
26/04/2024
NFL Draft 2024: Behind the Scenes in Downtown Detroit (Photo Gallery)
Behind the Scenes at the 2024 NFL Draft in Detroit (Photo Gallery) After just the first round, the 2024 NFL Draft has already made quite an impression in Detroi...
26/04/2024
NFL Draft 2024: Van Wagner Powers Onsite Entertainment Experience for Record Crowds in Detroit
NFL Draft 2024: Van Wagner Powers Onsite Entertainment Experience for Record Cro...
26/04/2024
Rohde & Schwarz presents spectrum dominance in all domains at AOC Europe
Rohde & Schwarz presents spectrum dominance in all domains at AOC Europe Rohde & Schwarz demonstrates the next generation of SIGINT/EW systems and sensor fusi...
26/04/2024
MCine Mauritius is to use Qube Wire for all future DCP deliveries across their exhibition chain on the Island
MCine Mauritius is to use Qube Wire for all future DCP deliveries across their e...
26/04/2024
Skeem Saam' May Spoiler: Has Lehasa killed Khwezi?
Skeem Saam' May Spoiler: Has Lehasa killed Khwezi?The Skeem Saam' May teasers mention Lehasa being apologetic about killing someone. Is it his baby mam...
26/04/2024
Skeem Saam: Thursday's episode, 25 April 2024 [video]
Skeem Saam: Thursday's episode, 25 April 2024 [video]Missed an episode of Skeem Saam? No problem! Watch the latest episode of your favourite South African s...
26/04/2024
Prison Journalism: Some issues to consider
Prison Journalism: Some issues to considerWesley Leong was incarcerated at the age of 15 in 1996 at Pollsmoor Prison. He is currently part of Restore's rese...
26/04/2024
Tonight on Scandal: A line is crossed and a mother starts to lose focus
Tonight on Scandal: A line is crossed and a mother starts to lose focusDon't miss Friday, 26 April's riveting episode of South African soapie Scandal! o...