All broadcasters are aware that the era of “ringing the cash register” several times an hour has largely ended. The fear, of course, is that changing economics means automation and centralization, with a loss of jobs on the local level. To be perfectly honest, that fear is entirely based on fact, or it's at least true in many markets. Cash flow is tighter these days, and management has a responsibility to the ownership to attempt to maximize profits in uncertain times.
The dynamics of what brought this on weigh heavily on how to change the trajectory of the station's finances. In any business when sales decline and costs increase, the results are the same. Competition that did not exist a few years ago is draining advertising dollars and going to program services distributed by cable, DBS and now IPTV. At the same time, labor costs per employee continue their inexorable increase, fueled in part by increases in health-care costs experienced by all segments of the economy.
What's a GM to do? It is tempting to find ways to reduce head count; cut investment in hardware; invest in lower cost programming such as reality television, DTV multicasting with more programming choices and potentially higher total revenue; and potentially centralize operations within a group.
But let's look carefully at the available options. Doing anything that makes the station's output less desired by the viewing public will send the trajectory in the wrong direction. That includes less desirable programming or poorly crafted program continuity. Less glitz may mean a smaller audience.
The goal needs to be to keep or increase revenue, maintain or reduce costs, and above all else not put the market share at risk. A centralized operations model is one way to reach this goal.
Partial centralization
Increased programming through multicasting means more, not less, effort in continuity and output stream assembly. By centralizing some portion of a stream that is used by a number of related stations in a group, the cost for each station is less, perhaps without affecting local employment at all.
Sinclair did this by first centralizing production of weather segments shown in all of its news operations and later by centralizing the national content provided to a common production facility. This worked only to a degree, however. In some markets the content was seen as less local and did not increase cash flow for the entire group, resulting in the company largely abandoning its NewsCentral operations.
NBC's WeatherPlus, however, has been more successful, with affiliates around the country using low bit rate multicast channels based partially on content distributed nationally.
There are many ways to reduce costs. For example, traffic can be operated in a fully centralized mode, with local sales personnel entering contracts and a corporate staff executing much as a local staff might. Or, with somewhat less savings, most of the local staff can operate on a system administered and managed at corporate headquarters, perhaps with thin client workstations at the local operation. This achieves some of the goals of consistency and centralized support without completely eliminating the local staff.
Centralizing master control
Centralized master control is another solution. However, it is a balancing act, with reduction in operating expense balanced against the increased cost for interconnection services. In major metropolitan markets, especially those with organized labor contracts that could make labor costs a major part of the operational costs, it is possible to experience significant savings in master control room operator costs. But even with decreasing costs for high-bandwidth interconnection circuit contracts, it is not possible to simply assume that labor savings will swamp connection costs. In each case, research must be done. The first step is selecting an operational model to use as a basis for the investigation.
Distributed operations
In a distributed operations model, only those portions of the content that make sense to offload to a centralized and combined operation are actually moved out of the local station. Syndicated content might be timed and prepped for air in a centralized operation for all group stations, but with the increased use of third-party services to deliver the content to the local station, it might make sense to only move the metadata from a centralized site to the local station.
That metadata, which might include editing decisions made regarding appropriate content, can be delivered in skinny pipes when compared with running the content over a WAN connection requiring perhaps 8Mb/s to 12Mb/s. This approach requires fully integrated automation software with the schedule assembled in the hub and executed at the spoke.
Remote monitoring is critical to make such an approach work well because it's likely that no one is monitoring at the local station. Modest bandwidth can accomplish this today. This includes both thumbnails and streaming media from the local station. The system can collect data and analyze audio and video levels, freeze frame detection, and the presence of signals in places where no operator is present. A logging system with browse access to the corporate WAN can allow remote users to verify that content is arriving and playing to air as expected.
The mechanics
A centralized operation can only work if the interconnection is essentially bulletproof. This might mean diversely routed circuits and a service level agreement that guarantees the availability of the end-to-end service. To achieve the goals, the provider may provision a full backup. It is often prudent, especially in the case of a distributed architecture, to provide a lower bandwidth backup to sustain monitoring and control during any outage in the main interconnection bandwidth (think back hoe fade).
The mechanics of accomplishing centralized operations include little technical planning until the business case is developed and tested against objectives. For example, if the station is in a top-10 market, the cost of make goods may be so high that any potential savings in operations are lost. After the business plan is developed, an overlay technical plan must be drawn up and tested to determine if anticipated cost savings and projected capital cost can be achieved. Lastly, following a decision to move forward, the hard issues of dealing with staff confusion and uncertainty must be addressed.
One thing can be said for certain: Groups anticipating delivering multicast streams in the future need to think through the business model and determine if it can be accomplished more effectively via centralization of any part of the operation, traffic, promotions or master control.
John Luff is a broadcast technology consultant.
Send questions and comments to:john.luff@penton.com
