Connections

M&E Journal: Cloud-Powered Collaboration in the Digital Supply Chain

Stuart Green, CEO, Zoo Digital

In 2006 sales of DVDs peaked, online video retail amounted to renting or selling DVDs through a website, and the concept of ‘cloud computing’ was first mooted. According to forecasts by PwC, 2016 will be the year in which electronic home video revenue will exceed that of physical products such as DVD and Blu-ray. Online retailers now stream video to almost every country in the world and the cloud is hailed as the future of enterprise computing. In ten short years, digital technologies have brought about profound structural change across the entire M&E industry.

The two primary causes of change to the digital supply chain have been the transition from physical to digital screen entertainment, and the global growth in developing markets.

Where ten years ago DVD was the dominant distribution format measured both in consumer transactions as well as products created, M&E companies now face a landscape highly fragmented by distribution formats and online retailers.

The need to do more with less: While international box office accounted for 71 percent of theatrical sales in 2015, up from 64 percent in 2006, the worldwide expansion of home entertainment has grown at a far greater rate due to the ease with which online retailers can now enter new countries. The multiple audio and subtitle streams supported by DVD triggered an initial expansion of the localization market that eventually became constrained by the number of languages that could fit on a single disc. In contrast, in the new era of digital distribution, TV and movie content can be delivered efficiently and cost-effectively to pretty much any country in the world. Indeed, in 2016 online retailers have launched truly global services, simultaneously bringing internet TV networks to more than 190 countries.

For content owners, this transition has brought considerable challenges: despite shrinking budgets, titles must be localized extensively and delivered through a growing number of distribution channels over shortened release windows. In this increasingly cost-conscious industry, studios must do more with less while maintaining high quality and robust security.

The outsourcing of post-production and services such as subtitling, dubbing and captioning services by film studios is a well-established practice that has continued through the digitization of the motion picture industry. Leading vendors that once offered predominantly celluloid-based services now operate in an end-to-end digital supply chain, yet the systems, business model and fundamental mindset of many vendors remains largely unchanged.

For outsourced services that don’t require directorial oversight, such as localization and DVD/Blu-ray authoring, vendors have traditionally operated opaquely – studios supply work orders in the form of emails, spreadsheets and file transfers, and vendors fulfil the services and digitally transfer the results back to the client.

A straightforward way to work, this loose coupling of studios and vendors has served the industry well for decades, not least because it allows commoditization of services: working with multiple vendors enables studios to reduce risk and drive down prices. However, in the new digital supply chain in which management decisions over territory releases, localization strategies and distribution channels are made in a fraction of the time they once were, the traditional engagement model is no longer tenable. There’s a limit to which such vendors can lower costs while maintaining high standards of quality.

Closer collaboration in the cloud

A shift is becoming increasingly evident as studios begin to recognize that new ways of working with vendors are needed to keep up with the pace of change. Judging by the questions that are now frequently asked in ‘Request for Proposals’ (RFP) documents prepared by strategic sourcing departments, it’s clear that studios now expect new technologies to play a greater role in the studio/vendor relationship. Questions such as “What investments has your company made to utilize technology systems to optimize the costs, quality and delivery associated with the services?” and others like it have become commonplace in RFP documents and important considerations for vendor selection.

While managing workflow by spreadsheet has long been commonplace, this is now widely regarded as a point of vulnerability with the risk of human error and the difficulty of version control to keep multiple copies of the same information synchronized across teams and organizations. Progressive M&E businesses are looking to link information systems with their partners, made possible by Application Programming Interfaces (APIs). This is particularly true of several leading online retailers: global publishers of large catalogs of localized content. By integrating its management information systems with those of its vendors, an online retailer has the means to push orders and source materials to suppliers in real-time and receive back quality controlled deliverables directly into their asset management systems. This is a highly streamlined, efficient and auditable way of working that benefits from automated reporting of KPIs for metrics such as quality and on-time delivery, so that suppliers can be compared objectively.

Studios, too, have begun to take steps to support more effective and agile working practices by providing their vendors with logins to internal work order systems. The availability of an API for such systems is becoming more common, giving vendors the option of a tightly integrated interface with clients.

These trends towards integration and shared use of information systems point to a transition of working relationships away from the traditional client-supplier model to those that are far more collaborative, in which a vendor’s project team members are increasingly distributed across multiple organizations.

The multiple source approach to services remains a key requirement for many studios, and therefore information systems must be vendor-neutral – software that effectively locks a studio into working exclusively with one vendor is unlikely to be tenable. Vendors must be far more agile and scalable than ever before, offering transparent and fair pricing and full visibility of accurate project information to support quick and efficient decision-making by clients. This, in turn, will often lead to a rethink of the systems and ecosystems that surround particular service lines.

As an example, localization has traditionally been provided by pure service organizations in which in-house translators work on licensed off-the-shelf workstation software, often supplemented by remote freelance staff using their own software tools. As a result, subtitle files have to be harmonized to ensure that all client deliveries are quality checked and consistent. In traditional localization operations, a significant element of cost is in administration of the workflow itself – initiating projects, selecting translators, distributing instructions and proxies, making deliverables consistent and fulfilling orders.

Cloud computing is transforming this ecosystem through the emergence of a new type of localization service provider that employs software-as-a-service, enabling proxies to be streamed and subtitles created within a web browser. This gives much greater scalability by drawing exclusively on flexible skilled labor around the world, simplifying information exchanges, and centralizing client content and localized assets in secure cloud storage. Such providers have far less need for office locations in each country, and instead are able to tap into a geographically diverse workforce in a far more cost-efficient and agile way.

MESA Europe identifies best practices

Recognizing the challenges faced by the industry in this area, MESA Europe has formed a localization council to foster end-to-end collaboration amongst entertainment service providers. “Improved communication and processes are needed to drive efficiencies in the face of shrinking release windows, tighter budgets and a growing number of file formats,” said Jim Bottoms, Executive Director of MESA Europe. “A more ‘joined up’ approach between theatrical, home video and broadcast groups may help relieve some of the pressure as the industry strives to respond to a fast paced digital business, where quality and tight deadlines cannot be compromised.”

There are a number of key characteristics that will be exhibited by vendors of the future, setting them apart from those of the past:

Hybrid service and software

The days of pure service companies are numbered. The vendors that will excel will not be those that simply have a capability for software development, whether in-house or outsourced, but rather those that have innovation embedded within their DNA. This is more than a matter of capability, and more fundamentally of culture and mindset. Digital transformation often calls for ripping up the rule book, challenging the status quo and inventing new ways to deliver far greater efficiencies internally and on behalf of clients.

Highly scalable operations

Through partnering and the use of networks of remote workers, vendors of the future will be capable of far greater scalability in throughput than previously possible, enabling the unpredictable ebbs and flows in client demand to be accommodated gracefully. This facilitates the highly responsive and agile operations required by M&E companies.

Embracing cloud computing

Scalability of services implies the same of software systems, and the use of cloud computing as the foundation of its operations enables an organization to flex compute, storage and bandwidth resources according to demand. However, cloud computing should not be simply a bolt-on to a traditional operation but the agent of change to bring about radical redesign of workflows, enabling transformative changes to enable collaboration and greater efficiency.

The use of production and management information systems deployed in the cloud ensures a consistent toolset throughout the ecosystem, supporting collaboration between studio groups, online retailers and vendors. Integrated asset storage gives clients secure access to data 24/7 and the means to self-serve.

Support for client-centric workflows

Integration of information systems for order placement and fulfilment will become critical, as well as supporting the unique workflow requirements of each client organization as a key feature of service delivery.

A collaborative approach

Successful vendors will operate collaboratively, sharing with clients the benefits that technological innovation brings, and being open and transparent. This means full disclosure of operations so that clients have complete visibility of the production pipeline, the status of orders and deliverables.

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