NAB2014 Convention Recap

Posted on 2014-04-24 by Tom VanBenschoten, Edge VP Media

The Ultimate Sandbox

By Tom VanBenschoten, Edge VP Media, April 23, 2014

 NAB2014 was, as one colleague described it, a ‘seismic’ affair. He meant, and I would agree, that not many prior years’ conventions witnessed such evidence of significant changes as 2014’s did:

  • The consolidation among media asset management providers is in full swing, yet the repercussions are only beginning to be felt in an evolving solutions marketplace.

  • The further consolidation of linear, non-linear and digital operations was a prime topic in many discussions as media clients evaluate the business as well as functional case to respond with technology improvements, yet there is concern that the buy side is dragging its heels.

  •  The appreciation for business, especially predictive analytics – disciplines as well as applications – is growing, yet the ROI remains a bit murky.

  • One more: the future for video content and distribution appears extremely lucrative, yet the constraints of non-leveraged assets and operations are a challenge today.

That’s a lot to digest over three-plus days on the convention floor!

From the perspective of Edge’s Media Practice, the prognosis is encouraging. Change is good especially for the right reasons. As video content becomes more ubiquitous in its devices and delivery, there should be more opportunities to leverage it with audiences and advertisers, and manage it with an improving set of tools. Business will lead and upgraded technology will continue to support it.

 A recurring conversation at the convention focused on the opportunity to better merge the silo functionality of programming, research and sales. The standard practice of television networks (broadcast and cable), also to a lesser degree stations, is to juggle the program schedule for competitive reasons and, therefore, at the last possible moment. This trend, if anything, is accelerating as the competition for eyeballs intensifies by the options of platforms on which to access prime content. However, when the schedule changes are made, the repercussions flow downstream to commercial operations and, ultimately, to sales in stewarding deal guarantees. A few media clients were overheard calling the resulting under-delivery and volume of ADUs used to correct the problem as a ‘train wreck’.

Inventory optimization has been a hot topic around network sales and commercial operations for a few years now; however, that is at best a reactive tactic to address the underlining issue. The root cause is more that programming, while they often have a view into audience estimates as well as program rights before making changes, usually lacks any perspective on what their rescheduling does to deal guarantees that get scrambled as a result. For revenue-driven organizations, isn’t this just a bit backwards? The concept of unearned revenue – deals struck with good faith estimates but unsecured because the available GRPs or GIMs are in flux – is a daunting one. How do you give programmers an idea as to the total financial implications – sales as well as rights -  of their maneuvering?

 Edge does not have definitive solutions to such a complex issue. But we do see an intriguing application worth further development – the concept of a what-if ‘sandbox’ built with predictive analytical tools. The sandbox would combine views into programming rights, audience estimates and deal guarantees even though the data may come from disparate systems.

 In theory this sandbox would analyze the current program scheduling, audience projections and ‘sold’ key demo GRPs or GIMs in all deals active within a certain date range – annual and scatter. From that baseline it would allow program schedulers to look at the consequences of any anticipated changes, before they actually make them. As they formulate the rescheduling, the sandbox would calculate the potential deltas. The anticipated moves and their impact can be made with eyes wide open, meaning sales and commercial operations aren’t scrambling to repair the damage after the fact. In this way, the volume of ADUs now thrown at fixing the problem could be significantly reduced (or at least better planned for) with valuable inventory resold as scatter. Who knows? Perhaps programming could even look at scheduling changes that increase the re-sellable inventory as well as boost ratings!

 As it would be easy to calculate an ROI on the reduction of ADUs as a benefit yardstick for just one type of predictive analytics, Edge is dedicated to having further discussion with media clients and analytics providers over the coming days and months. If you have interest in this issue, we’d welcome your input.

Posted in