Vendors, broadcasters find one size does not fit all
FALLS CHURCH, VA
The challenges of broadcasting in a consolidating yet increasingly competitive marketplace have motivated many station groups to explore centralized broadcast operations, also known as "centralcasting."
By centralizing broadcast operations for the entire group at one "hub" location, broadcasters hope to save money by eliminating redundant personnel, equipment and processes at the individual stations to become more competitive and profitable. Those at least are the goals of centralcasting.
But experts caution there's a downside to this proposition. If the wrong centralcasting model is chosen, station groups can find their savings wiped out by the capital costs--like high-bandwidth fiber-optic or satellite connections, automation technology or skilled engineering and IT staff--needed for centralcasting. And, they can lose money if their on-air product is jeopardized.
Since many early attempts at centralcasting met with disappointing operational and financial results, the experts we spoke with said that the centralcasting business has virtually stagnated for the last two years to the point where many considered it a "dead issue."
"Centralcasting is still thought about, but few are taking it seriously as an alternative to current operations. Those that made the decision to go down that path have had mixed emotions--both operationally and technically," said Karl Paulsen, vice president of engineering for Pittsburgh-based AZCAR Techno-logies, Inc. "We have not had any customers request to build their system out for complete centralization, although several have had 'partial' consolidations. And most express a desire to move in that direction and to plan their rebuild in such a way as to accommodate centralization at some future time."
RUNNING THE NUMBERS
Centralcasting's Human TollPITTSBURGH
While centralcasting offers station groups compelling cost savings, especially on the "Big-L"--labor--it carries a human toll that is often gut wrenching. One person who knows first-hand is John Poister, former news director at WPGH-TV (the Fox affiliate Channel 53) in Pittsburgh in April 2003 when Sinclair's centralized news network, News Central, was implemented in April 2003.
"I had hand-picked my news team, and we were working well together. After a rough start, we had managed to develop a nightly newscast that was doing well in the ratings and making money. When I learned of the impact that centralization was going to have, I tried submitting various proposals in an effort to save their jobs, but in the end, many were cut," says John Poister, now program director at Renda Broadcasting, where he manages the station formats of three Pittsburgh radio stations. Knowing that he had a good offer in hand, Poister chose to leave in the hopes that his news director spot might help someone else who would otherwise be out of a job.
"Sinclair did tell everyone that they could submit their resumes to other stations in the group that had open positions but there were no guarantees that they would be hired. And truthfully, many didn't even try because they didn't want to uproot their families," says Poister. Poister said he has only the highest regard for Joe DeFeo, Sinclair's vice president of of news, and the Sinclair Broadcast Group because it was very challenging to implement the changes.
"The TV news business is very competitive, and every station group is under pressure to consolidate resources. For Sinclair, centralcasting presented undeniable growth opportunities for expansion, and a means of making their stations, especially those in rural markets, more competitive by differentiating themselves with a high-quality local news product," says Poister. "But for those who are let go, it's often difficult and frustrating to find comparable employment. And those that remain always feel anxious that 'the ax is going to fall' again."
New efficiencies in broadcast operations are an inevitable part of the changing landscape, according to a Sinclair executive.
"Change is always difficult," said Del Parks, vice president, engineering and operations for Sinclair. "We're in a business where technology allows you to operate differently."
Parks likened the changes brought about by centralcasting to the publishing world where typesetters and pressmen have been replaced by Mac computers.
"It changes the environment," Parks said. "For Sinclair, it's exciting to go into a market to create jobs but it's often difficult when you go into a market to adjust the workforce for the new technology."
-- Claudia Kienzle
"With centralcasting, the theory is that if you reduce the headcount at each station and put fewer people in the centralized operation than in the aggregate of the multiple stationsÉ the net cash outflow goes down and therefore you're putting more money in the till," said John Luff, senior vice president, business development, for AZCAR.
"But unfortunately, it's not that simple," Luff said. "Master control operators, especially in small- to mid-sized markets, tend to be low-paid, hourly workers, so it's hard to find cost savings there. And the operating costs for transmitting video over fiber, especially longer distances, can be expensive if you elect high-bandwidth service with full data circuit redundancy."
The New York Times Company's broadcast group--with eight stations in Tennessee, Virginia, Alabama, Arkansas, Iowa, Pennsylvania and Illinois--manages to centralcast without incurring huge bandwidth costs by sending only the machine control data that triggers playback of master control equipment at the stations, rather than moving actual video around. So they incur only low bandwidth costs (from a T-1 line or less) and can handle remote automation using PCs.
"If you can eliminate master control operators and the cost of interconnect is very low, then there's potentially a good net savings," Luff said. "But, if the value of the commercial time is high, as in major markets, broadcasters may be unwilling to risk the revenue for spots that don't run properly because there is now no one in master control to fix errors and recover quickly when things go sour." One top New York broadcaster decided after a feasibility study that the labor savings wouldn't be sufficient to justify the cost of the make-goods they could incur every year, according to Luff.
"There are some relatively low-tech centralcasting options that carry very low risk. Broadcasters often don't consider the low-hanging fruit that would easily yield guaranteed savings, such as centralizing the back-office processes like traffic; or 'bag and tag' production work," said Luff. "Instead of having people at every station add their local tag to same promos they download for syndicated shows, one editor could do all of them and deliver them to the stations in store-and-forward mode."
THE SINCLAIR MODEL
Launched in 2002, Sinclair Broadcast Group's "News Central" project is an example of an innovative strategy to reduce the cost of producing news by stations in the group. By centralizing the production of national news, weather and sports at their corporate headquarters in Hunt Valley, Md., Sinclair frees up each station's resources to concentrate on local news.
"Currently, 15 stations participate in our centralized news network, and these are UPN, Fox and WB stations [not traditional network affiliates], which would not be able to sustain a full-blown news operation to produce one hour of news a day," said Joe DeFeo, vice president of news for the Sinclair Broadcast Group.
"It is financially beneficial for these stations because they no longer need to support a larger news staff to produce the national portion of the newscast, which is about 35 to 40 minutes of the hour-long newscast," said DeFeo. "And there are no longer inefficiencies in the process because they aren't duplicating effort to produce the same news stories."
GETTING IT
Recognizing how capital costs have plagued centralcasting, Clear Channel has developed NexGen TV, a revolutionary new strategy that cost-effectively automates its TV stations using open-standards-based IT technology.
Estimating that high-bandwidth fiber connectivity runs $10,000 or more per month per video channel, Mike DeClue, senior vice president and director of engineering for Clear Channel, in Tulsa, Okla., said, "This centralcasting approach can get very expensive and problematic, especially for small- to mid-sized TV stations that are not sitting on top of a fiber network. And if the station multicasts, monthly costs for fiber service escalate.
"We have a better way of doing it. We are replacing our centralized broadcast operations with NexGen TV," which leverages servers from IBM, Dell and Gateway, as well as SNMP protocol, Gigabit Ethernet (IP) networks, industry standard file formats like MPEG and DV; Pinnacle Video cards, and virus protection.
"For $40,000, we can buy a server outright that's powerful enough to run the automation and play out programming and commercials for a complete channel," said DeClue. To add a channel, or add full redundancy for any channel, they just set up another "box," making this approach both cost-effective and flexible for multicasting.
NexGen TV has been installed at stations in Little Rock, Ark.; Fresno, Calif.; Fairbanks, Alaska; and Eugene, Ore.; others are planned. Currently, a central server feeds new programming and automation content to these "edge" servers at the stations every 24 hours at faster than real-time over Gigabit Ethernet WANs as well as via Clear Channel's own satellite transponders. DeClue said, "We're betting on the IT paradigm, which is why we can buy inexpensive RAID servers that are increasing in power and dropping in price every 18 months."
MASTER CONTROL ROOMMATES
Groups are still contemplating centralized operations but many have opted to expand individual station master control centers as a solution to managing multiple program streams. This choice provides a good ROI in most cases, according to Larry Brandt, senior broadcast engineer for Digital System Technology (DST)'s Seattle office.
"Almost every station we work for, or visit, is looking at expanding the number of program streams they transmit and expanding their shrinking revenue streams. Sister stations in neighboring markets are cost-effective to integrate into the new master controls. The key to this growth is designing a digital master control/distribution center that does not require up-front investment in hardware beyond that required for the existing program streams. Obviously, the master control is designed to expand and contract as streams are added and deleted," said Brandt.
An example of multiple stations sharing one master control center more cost-efficiently is an DST systems integration project completed at Fox affiliate KTVU, in Oakland, CA, which shares 24-hour operation with KICU, a Cox-owned independent station, previously out of San Jose, CA. "Somewhat later, Cox Broadcasting commenced operation of Reno FOX and UPN stations KRXI and KAME from Oakland by controlling the automation system from KTVU's expanded master control. This choice of central distribution left most technical facilities intact in Reno where ingest and program preparation is still accomplished," says Brandt.
"The trend in centralcasting over the last 18 months is strongly away from the central distribution model because of the high cost of telecommunications circuits and toward expanded digital master controls," said Brandt. "Central program distribution was conceived to save money. To date, it's hard to justify centralcasting because the ROI is so poor. Huge operating costs related to program distribution just don't balance operational savings. The capital expense associated with building a central program distribution operation is risky if the facility does not reach full capacity in a timely manner."
CENTRALCASTING MODELS
"Until now, centralcasting has been an unqualified failure because most broadcasters went in with the primary motivation to save money. To be successful, centralcasting has to result in a better local on-air product, not just a cheaper one," said Steven L'Heureux, president of Denver-based automation provider Encoda Systems.
But because market pressures persist, L'Heureux said interest in centralcasting has rekindled following NAB in April. "Since NAB, we've been talking about centralcasting with six major station groups, and we're having six completely different discussions because each one has unique operational needs, goals and workflows," said L'Heureux. Among the numerous centralcasting models are: centralized control of content, scheduling and playout; and centralized ingest of content but distributed control of playout.
"Using our unique Master/Follow functionality, our D-Series automation system can manage the playback of a group of stations, while allowing regional stations to breakaway to local playback of news and other programming. On conclusion of the breakaways, all channels rejoin with frame accuracy, much like the 'network-affiliate station' model," said L'Heureux.
"This model was adopted by Southern Cross, a five-station group broadcasting a total of 25 channels in Australia," said L'Heureux. "Rather than having MCR operators at each station, two master control operators and one supervisor can manage and monitor operations on behalf of all five stations, essentially making that hub a 'Network Operations Center [NOC] for the TV group.'"
Encoda's D-Series automation systems feature VeriStream, which automates error monitoring, detection and correction of multiple channels simultaneously. And D-Series interfaces with Encoda's CJDS or Enterprise traffic systems for an integrated, end-to-end broadcast workflow.
"Centralcasting is not just about remote control of several master control rooms," L'Heureux said. "It's about striving for overall efficiency throughout the entire digital media supply chain."
Rick Stora, director of broadcast operations for Irving, Tex.-based Sundance Digital agrees with L'Heureux that broadcasters are still interested in centralcasting, but at varying levels of complexity.
"Most groups with more than five stations are considering centralcasting," Stora said. "We see thatÉ each group that's working on a centralcasting implementation is selecting aspects of the model that suit their unique needs. One group may choose to do regional control. Another may choose to centrally control their entire group. Some share content; some do not.
"The cost/profit barrier remains the availability of affordable data bandwidth. Stations in smaller markets have not had appropriate connections and all significant bandwidth has been very expensive," said Stora added. "These difficulties have not allowed the groups to meet their return on investment goals. However, wider availability and lower data line costs have allowed an increasing number of groups to reconsider adopting this model."
Michel Proulx, vice president of product development for Miranda sees demand for hybrid centralcasting models.
"Most of the centralcasting projects we see these days are of the distributed variety," Proulx said. "In other words, master control and playout remain at the remote station but they are centrally automated, controlled, and monitored. [And] certain time- and staff-intensive tasks, such as graphics, ingest of syndicated programs, and weather, are being consolidated, although not always at the center."
The high costs of maintaining reliable transmission between the hub and the edge stations is one of the main determining factors stations consider in choosing whether or not to centralcast, according to Brian Lay, director of product marketing for San Jose, Calif.-based Harris Automation.
"Station groups with a regional presence are tending to pursue centralcasting," Lay said. "Typically, this involves origination of a program at the edge to control and edit the program schedule. All program and commercial ingest is done at the hub, reducing the manpower requirements. In most cases, a large central video server can serve multiple edge stations reducing the need for capital investment at each station.
"Centralcasting is simpler to achieve if all the stations use the same IDs for content and this requires a shared traffic database," Lay continued.
"Centralized traffic operations [can] achieve further operational savings. In the case where all streams are originated from a central hub, the link to the transmission point is critical," said Lay. "This link must be available 24x7 with a back-up link. The high cost of these links is one of the major reasons that many groups cannot justify centralcasting as a business investment."
