Faster Traffic Pattern for 2010 - Broadcasting & Cable

Faster Traffic Pattern for 2010

Vendors forecast renewed growth, improved integration
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As the advertising market starts to rebound, providers of the software used to schedule commercials are also looking for an upturn in their business. As they prepare for the NAB convention in Las Vegas this spring, traffic vendors are seeking new business with upgraded systems that feature better reporting and analytics tools, new support for selling advertisements on digital platforms and better integration with automation systems. To appeal to budget-conscious broadcasters and cable networks, they are also streamlining their products to minimize the cost and labor associated with the ad-sales, scheduling, reconciliation and billing processes.

“2009 was ‘batten down the hatches’ for the broadcast market,” says John Patrick, Harris’ product director for North American media. “But the market seems to be stabilizing as we head into 2010. There are fewer bankruptcies with broadcasters, and a few startup cable networks are getting fi nancial backing.”

While most broadcasters still aren’t making huge capital investments, they are budgeting for IT spending and are also looking at convergence opportunities such as mobile digital TV, Patrick adds. He believes that Harris is well positioned with its OSi-Traffic system, which is used by station groups like Sinclair and new digital multicast channels like Retro Television Network (RTN).

Patrick is also bullish on the associated AdConnections sales software, used by about 200 stations. AdConnections features seamless integration with OSi-Traffic, and large groups including Sinclair and Entravision are now using the two products in combination. Harris is targeting the cable market as well with OSi-CableNet, a new traffic and billing system designed for cable networks’ specialized requirements.

Recent upgrades to OSi-Traffic include more flexibility in managing copy, more detailed financial reporting that allows traffic data to be extracted and fed into other business systems at a station, and improved analytics functionality that will be unveiled at NAB. Harris is also working to support new-media revenue streams from selling advertising on Web, video-on-demand and mobile platforms, including reconciliation of new-media inventory back into OSi-Traffic.

While there are customers using OSI-Traffic to track Internet inventory, the workflow is cumbersome; Harris will address that problem in the system’s Version 8.0 release. The upgrade will give users the ability to operate in different modes within the traffic system, including traditional spot mode, Internet mode and VOD mode.

“Today, you can set that up manually in the system, but you don’t have the integrations for impressions to flow back into the traffic system,” Patrick says. “This will allow you to do contracts and billing, and do consolidated billing [of new-media inventory] with traditional spots as well as reconciliations.”

BURYING THE HATCHET

Sarah Foss, CEO of Springfield, Mass.-based VCI Solutions, notes that the “hatchet fell in the industry pretty heavily” over the past year, so clients are coping with reduced staff. They are also assessing new industry-wide initiatives like ePort in broadcasting and Canoe in cable. “They’re talking about how real [ePort and Canoe] are, and are the systems prepared to work with them?” Foss says.

Nonetheless, VCI is seeing more activity in its traffic business, Foss says, as broadcast customers look to make incremental improvements: “Things are picking up.”

VCI currently counts station groups including LIN, Granite, Freedom and Newport Television as customers, as well as cable networks including BET, Versus and various NBCU properties. Foss says that VCI has two big customer wins that will be going live with its software before NAB, but won’t disclose who they are.

VCI’s Verity system, which was launched at NAB 2009 and designed to work as a single back-office management system for television stations by integrating traffic and master-control automation as well as sales and billing software, should be live in the field by this year’s show. VCI also has two new products in beta testing that will be announced at NAB.

The company’s flagship Orion traffic system will get a significant upgrade, according to Foss, with “better business measurement and predictive analytics about sales inventory,” i.e., better data on sales and pricing. By having better reporting and more intuitive dashboards, the Orion product will allow station personnel, such as VPs of sales and sales managers, to make decisions faster and quickly enact changes. She adds that the Orion user interface will look dramatically different for NAB.

San Francisco-based WideOrbit has steadily grown its market share in broadcast television since its founding 10 years ago. Its customer base has expanded from about 400 stations four years ago to more than 1,100 today, with customers including Gannett, Hearst, McGraw-Hill, Meredith and NBC.

Despite the economic downturn in 2009, the company’s growth has continued, says CEO and founder Eric Mathewson, who estimates WideOrbit’s market share in traffic software at about 60%. “Last year was a challenging year for really all broadcasters, but it was a good year for WideOrbit,” Mathewson says. “We were up nearly 30%.”

The company’s WO Traffic product has also made inroads into regional cable sports and new-media platforms, and counts YES Network, Fox Sports Net, cable interconnect Adlink, Transit TV and Qualcomm’s FLO TV as customers. WideOrbit has a sales product, WO Sales, which is used by some 30 stations including the NBC O&Os. The company also makes traffic software for radio stations, and purchased Google’s radio automation business last year.

Mathewson credits the intuitive interface of WO Traffic and frequent updates to the software as being its biggest selling points. He estimates that WideOrbit has fielded some 45,000 feature requests from its traffic system customers through the life of the product.

“Spot TV been under pressure for a long time,” he says. “We continue to reinvest very aggressively in making spot TV easier to buy and make it easier for stations to monetize their inventory. This business is very simple—if you make the end user happy, they’ll tell their end users, and they’re going to recommend you to others.”

WideOrbit’s software was initially designed for centralized traffic operations, so a station group could hub its traffic functions without requiring any incremental software changes. The overwhelming majority of WO Traffic station group clients are running on a single database.

“Typically, there’s one person who handles copy and material instructions locally at each station,” Mathewson says. “But all of the scheduling, creating logs, billing, and all of the invoicing functions are done out of a single location.”

U.K.-based Pilat Media has also been a benefi ciary of the hubbing trend, with large traffic sales to the Fox and Media General station groups in the past few years. Pilat has picked up another major U.S. customer in Scripps Networks, which last year began using Pilat Media’s IBMS broadcast management system to handle scheduling and management functions for five cable networks: HGTV, Food Network, DIY Network, Fine Living Network and Great American Country. The installation of IBMS is part of Scripps’ five-year program for transitioning to a file-based operation, and replaces the previous in-house-developed management system.

Pilat CTO Bob Lamb says that Scripps is using IBMS more on a daily basis, and has also started using the system to manage advertising in nonlinear content. “At the moment, the nonlinear [ads] will generally be a copy of the linear,” he says. “But there is a discussion of having special ads go into the nonlinear stuff. In general, what we do fi nd is that after customers install the base product, they’re happy with it. Once they get settled, they try to exploit the features.”

Lamb says the rollout of Pilat’s IBMS system across the Fox-owned stations is progressing nicely after significant development work at early adopters. “We’ve got a cookiecutter model now,” he says. “When you go to new stations in the Fox group, they know how to do it. We don’t actually have to do much development. They just roll it out.”

As the Pilat solution is implemented across more Fox stations, the vendor has worked to implement a business intelligence product that allows for better corporate reporting and analysis across the group.

“The quality of data the execs get is much better,” Lamb says. “Now they can look across the stations and see that one station is selling McDonald’s ads at a different rate than another station, and ask, ‘Why?’ And now they can do it from last night’s data, when it used to be a week-old report.”

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