Faster Traffic Pattern for 2010 - Broadcasting & Cable

Faster Traffic Pattern for 2010

Vendors forecast renewed growth, improved integration
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BXF: A Work-in-Progress

For the past few years, traffic and automation vendors have
extolled the virtues of Broadcast eXchange Format (BXF), a data-exchange and
messaging protocol that is designed to allow traffic systems to communicate seamlessly
with master control automation. But while BXF hold great promise, vendors says
the technology's adoption by stations has been relatively slow. More...

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
financial 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 beneficiary 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 find 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 cookie-cutter 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."

Pilat also intends to unveil a rights-management product at NAB that will address the complexities of managing
content across multiple digital platforms. "We've had some basic rights
management in IBMS, but now we're gong to expand that out to be a full
rights-management system," Lamb says. "With all this new-media
content, rights have become a lot more complicated to manage."

SintecMedia, the Israel-based software firm that made an unsuccessful bid to
acquire Pilat early last year, is starting to grow its footprint in North America, says president Chanan Weiss. The company,
which has offices in New York, Denver and Toronto as well
as Jerusalem and London, already counts the Canadian
Broadcasting Corp. as a customer of its OnAir comprehensive broadcast
management system. Like Pilat's IBMS, the OnAir system handles a range of
functions including sales, traffic, programming and promo management. Sintec
recently added two major North American cable networks as customers, though
Weiss won't identify them, and also has designs on breaking into the
call-letter station market.

At NAB, Sintec will be showing
several new products, including OnTarget, an airtime optimization system for
the booking and placement of spots and promos; OnRequest, a programming tool
for the video-on-demand market; and OnTrack, a business intelligence system
aimed at larger broadcasters and cable programmers.

Weiss says the new extensions to OnAir reflect the growing consolidation and
centralization of network operations. "We're seeing more and more move
into multichannel sales," he says. "In the past, every cable network
was selling its own inventory, but as larger [programmers] acquire more and
more cable networks, they're looking to streamline operations to get
advertising selling on multiple properties at one time."

Argentem Corp., a Reno, Nev.-based automation software provider that launched a
traffic product at NAB 2009, has
found the broadcast market to "be pretty soft," says president Jim
Moneyhun. The company's ATBTraffic system has been deployed by Puget Sound
Television in Redmond, Wash.
Puget Sound is using the system for its KPST
Seattle and Azteca stations, and has integrated it with Argentem's Argus on-air
automation system. Another user is independent WGCB Red Lion, Pa., which didn't previously use a traffic
system. Moneyhun says a few more orders are in place, including several
religious broadcasters.

"There had been just total freezing of purchases regardless of the size of
station," he says. "But stuff is starting to free up. We're seeing
that some smaller stations as they add more channels have to get something.
It's impossible to do traffic manually for three, four or five channels."

Argentem, according to Moneyhun, is "on the threshold" of delivering
a fully integrated traffic and automation system with direct communication
between databases, which it hopes to demonstrate at NAB.
"It's not just schedules and logs, but other systems as well," he
says. "We want to integrate operations to increase the benefits of what
should be a perfect workflow, which hadn't existed before."

While investing in traffic software has long made sense for larger stations,
the cost of such systems has been a stumbling block for smaller outlets. In
that vein, Argentem has been adjusting the prices of ATBTraffic, charging more
at larger stations and less for smaller ones.

As Moneyhun puts it: "I think we've hit a price point where a very small
Class A station, and even LPTVs, are able to afford a traffic system."

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