Deluxe Exec: Innovations in AI Technology to Cause Paradigm Shift in M&E Sector

Innovations in artificial intelligence (AI) will cause a paradigm shift in the media and entertainment (M&E) sector, greatly augmenting content localization and distribution processes for content providers across the globe as it continues to advance, according to Andy Shenkler, chief product officer at Deluxe Entertainment Services Group.

“AI is obviously playing a fairly broad role, especially with the areas that we at Deluxe are working on,” he told the Media & Entertainment Services Alliance (MESA) in a phone interview. That includes “everything from the post-production creation process, localization” around advanced language detection and auto translation – “and then even down into the distribution side of things,” he said, noting the latter was “probably the least well-known and discussed” part of the equation.

“One of the biggest challenges that we face is [that], with the amount of content that comes into all of our facilities, it takes an inordinate amount of energy to go through and determine what picture cut everything is,” as well as figure out if “separate assets align with any of the video that we have,” he said. And then along came AI, which is already “starting to play a pretty big role for us there in just really increasing our time to market and allowing us to go through massive scale, especially as we move heavily into the cloud to process everything,” he said. “Rather than having hundreds of people have to sort through and sift through the minutiae, we can now have the system start to evaluate thousands of pieces of the content in real time and prep everything for the really heavy creative workflows,” he explained.

Deluxe has been using a couple of different AI technologies, he said, telling us: “We’re using some of Amazon’s. We’re using some of Google’s. There’s different flavors for everything. And we’ve got our own data science team that’s actually working on it in different areas. So, it’s not like it’s just all outsourced. A lot of that knowledge is here, in-house.” Deluxe has also “kicked off a couple of other initiatives that will probably start to come to life later in [calendar] Q1-early Q2 for some internal processing,” he said.

Although Shenkler predicted AI is “going to continue to grow,” he said: “I don’t think it’s going to be quite the magic bullet for everything. I think, as with all things, it becomes the hot topic and then you have to find reasonable ways to apply that new technology to pragmatic situations. But there’s no question that, especially given how the industry is scaling from a global distribution perspective, it’s necessary in order to keep up and increase that kind of time to market where everybody is wanting to release everything day and date across all the different platforms.”

Shenkler also gave his take on the growing over-the-top (OTT) space, telling us: “Clearly, we’re seeing a lot of shifting right now, especially between the Disney-Fox merger, as well as [Disney’s] acquisition of [BAMTech] and launching their own platform” for streaming.

In general, he said, “we’re starting to see more and more of these kind of all-inclusive services come up.” But he predicted that what we’re also going to start to see are “more niche services that, rather than just being pure-play video streaming services, they’re going to be real communities.”

Elaborating, he predicted: “You’re going to see [services] where it’s not about going to it to get content” alone, “but to actually participate in conversation, potentially have commercial merchandising – buying physical products and being able to have certain things to upsell because just pure” subscription video-on- demand (SVOD) and advertising video-on-demand (AVOD) business models “don’t necessarily create the ROI that’s necessary to keep these things running.”

While we’re “obviously seeing a lot of commoditization within what it takes to run those things,” he said, “that doesn’t necessarily also elicit a profitable business for a lot of these ventures.” There’s also “no question” that the OTT space is “crowding and so, in order to differentiate themselves, it can’t just be a copy of a Netflix-like service; it needs to be something more — and that’s that kind of niche perspective that I think we’re going to start to see more and more” of, he said.

Deluxe delivers “a huge amount of content to a number of the aggregators who are already providing OTT services,” he noted, adding the company recently entered into an exclusive licensing agreement with a Siemens division to add the Smart Video Engine (SVE) to Deluxe’s OTT services and serve as the “underpinning of our own OTT solution.” SVE is a cloud-based, premium online video platform powering OTT and TV everywhere businesses that was developed by Siemens Convergence Creators.
In announcing the SVE deal in November, Deluxe said the “state-of-the-art OTT platform gives Deluxe a game changing, unified end-to-end solution that removes the complexity and burdensome cost of managing multiple vendors and integrations across the video supply chain.”
Deluxe has been “running the back end of these services” for a long time, “including the entire digital supply chain,” so it’s “uniquely positioned” to offer the “full gamut” of services, Shenkler said, adding: “For our customers who are looking to get into this, it is an incredibly expensive and heavy venture to spin that up yourself and it’s just as complicated to go and try and cobble it together with seven or eight different partners and act as your own systems integrator. And so really where the benefit comes in that we provide is that it’s an all-in-one and you can run your entire supply chain, your OTT service, your distribution mechanisms, your digital cinema all through our own platform.”

Deluxe is also “in the process of actually cleaning up part of our [OTT] platform and branding” around SVE, and we can expect an announcement on that front early this year, he told us.

Augmented reality (AR) and virtual reality (VR) are, meanwhile, providing “completely new pieces to explore about really driving a community experience [and] driving a new way of storytelling, he said. There are also marketing aspects that can be explored with AR, he said, noting a movie poster can “come alive” using the technology. But he said: “You can imagine a world soon where children will have action figures and toys that where you once had to imagine a world those toys were playing in, now you can suddenly have an immersive experience that kind of brings you back into the movie and TV show that you love.” And VR is “even more immersive,” he said, adding Deluxe is “spending a lot of time right now trying to get ourselves ready for what we believe is going to be an onslaught of that as well as the higher bit rates and resolutions of 4K, 8K and so on.”

Ultra High-Def (UHD) is “clearly having a large impact” on the M&E sector, he went on to say, telling us: “We’re starting to see more and more content come in that way. Obviously, all of the digital cinema packages that we’re dealing with are of the much higher resolutions.” It’s also “driving a lot more of our cloud migration strategy to give us that scalable capacity so that we’re always in a position to service our clients’ needs without having to make them wait and not needing to procure new hardware to keep up,” he said, adding: “With some of the toolsets that we have a lot of the stuff that we’ve got is a combination of things that we built ourselves or augmented. Some of the tools that are in the marketplace are needing to be updated in order to keep up with this. And I don’t think we’re going to see that stopping.”

Also, just like with AR and VR, “resolution is only one aspect of it,” he said, adding: “You start to layer into it 360-degree video, you start to layer into it concepts like blockchain and being able to do transactions with a huge amount of metadata and how we’re actually communicating with all of these different endpoints. I think all of these things are areas that Deluxe is incredibly focused on to remain ahead so that when our client base is ready to consume those things we’re not reacting to them, but rather helping drive kind of how the industry is moving forward.”

Although 8K was “still a ways out,” he predicted that we’ll be seeing some of the first mainstream 8K TVs very soon.

Blockchain hasn’t had a significant impact on the M&E space yet, he also said. But he added: “It’s coming. I think that everyone is really exploring it” on multiple fronts.