Over the last couple of years, through conversations with our customers, we’ve frequently found that the technical acquisition costs for accessing content can actually be higher than the value of the commercial rights being purchased in the first place. Most commonly, rights-holding organisations sell the content rights and provide details to takers of where that content can be received – but what happens afterwards is often overlooked.
Rights takers have the hurdle of acquisition to overcome which has a whole host of technical costs associated with it. To identify and describe the impact of these costs, we have coined the term ‘downstream cost profile’ which is set out in the diagram below. The downstream cost profile isn’t what it costs the content owner to make the feed available.
Instead, it highlights what it costs the takers to get a feed in a format that is helpful to them and their ongoing content delivery or distribution chain. For example; a live feed of sporting event X is made available at BT Tower and/or on Eutelsat 10A, but the customer is located in the US and needs the feed standards converted and delivered to their facility in the US as well as presented to their cloud ingest infrastructure.
By highlighting the downstream cost profile, it becomes clear to all stakeholders involved in a broadcast workflow where the costs are and how they can be reduced to achieve both financial and operational efficiencies.
The cost of acquisition
There is almost always a cost of acquisition for content. The content owner or their production partner will often make the content available at BT Tower, or on a regional satellite downlink, and pass the details on to the takers. As far as the owner is concerned their responsibility for the provision of the content is complete and it is then each individual rights taker’s responsibility to arrange their own access to that content.
Receiving a feed from BT Tower requires a BT Tower circuit/facility line or (if you don’t have one) a relationship with someone who does. Once the feed is presented from BT Tower it still needs to be standards converted (if required), encoded, and delivered to where it is needed. This often entails multiple fibre or satellite hops and further encoding – all adding delay, reducing quality, and increasing costs.
Satellite content is not free to receive either. It requires significant investment in antennas, RF/IF infrastructure, IRDs as well as the know-how to manage them – or a relationship with someone who does! Then the merry-go-round is back in play and broadcast engineers need to convert, encode and deliver the content to where it is actually required.
Either way, the resulting solution is charged by the hour, with booking periods to match the worst-case scenario so that the resources are guaranteed for the duration. Depending on the content value, this can often be so disproportionate that it is not economically viable. This is only exacerbated further by the long-form nature of many niche sports events and the multiple hops that the feed must take to get to the correct destination.
As explored in a previous blog, for sports federations the overriding objective isn’t always to increase financial gains but actually to increase audience reach – content owners could give their content away and not charge for the rights but if the technical acquisition costs are still very high, there is still a significant financial outlay that takers are having to make to access it.
There is almost always a cost of acquisition, but if these costs are acknowledged as a known cost. The opportunity lies in making content available to takers at a much more manageable price point per hour. This is realistically only achievable with IP solutions such as Livelink because the fundamental flexibility of cloud infrastructure, together with its interoperability with all formats, protocols and global ingest requirements, means that the cost of the content acquisition can be reduced to a commodity value.
In turn this approach reduces the financial burden of the downstream cost profile for takers and allows organisations to make more content available, which takers are far more likely to use if the acquisition costs are manageable. Furthermore, by fixing the cost of acquisition at the lowest possible price point, the costs associated with content creation are actually diluted with each additional feed variant and with each new taker. Owners can seize the opportunity and commoditise their content whilst simultaneously tailoring it for specific takers.
Here’s an interesting piece of information. Backup feeds often cost more than the primary feed! The technical infrastructure put in place is not often used and therefore takes a more circuitous route for delivery. All for a feed that is never really exploited but is always required. Finding an IP service provider with access to traditional infrastructure can then be a significant cost saving for provision of redundant feeds. Our service network, for example, connects to BT Tower and global teleports to access these feeds and make them available directly to IP infrastructure.
Benefits are for everyone
The benefits of a lower downstream cost profile favour the rights taker. Takers can get access to whatever content they want in any format they require, wrapped in a container (Zixi, RIST, SRT, or RTMP) that allows them to deliver it to wherever they need it. They get exactly what they want, exactly how and where they want it – at a commodity rate. On top of that, the ease of IP implementation removes any infrastructure barriers.
That isn’t to say there are no upstream benefits. The main benefit to content owners is having a viable opportunity to make more content available globally. Very often there is around 3 or 4 times more content available than the generic ‘world feed’, particularly in long-form tier 2 and 3 sports. For those sports the costs of making the entirety of a multi-hour, multi-event and/or multi-day event available on satellite are prohibitively high. By adding IP options to the mix, suddenly content owners can begin to access an untapped reserve of potential revenue.
The reality is that rights takers are paying for multiple rights for events across the year. Therefore having access to the feeds via tools they can spin-up and down, without any heavy investment into fixed resources and/or technical staff is a huge benefit.