As broadcasters and cable networks muddle through the current economic downturn, providers of the software used to schedule commercials are fine-tuning their products to minimize the cost and labor associated with ad-sales, scheduling, reconciliation and billing processes. Traffic-system vendors are also trying to help customers maximize revenues with better reporting and analytic tools as well as new support for selling advertisements on digital platforms such as stations' Websites, mobile services and digital signage.
Traffic vendors say their own revenues have been mostly flat this year, as new business from cable networks has made up for reduced spending by broadcasters. They note that their station customers have had a particularly rough 2009, with several large station groups filing for bankruptcy, refinancing their debt or undergoing major restructuring, if not all of the above.
“Flat is the new growth,” says Sarah Foss, president and CEO of Springfield, Mass.-based VCI Solutions, whose Orion traffic system is used by broadcast groups such as LIN, Granite, Freedom and Newport Television as well as cable networks like BET, Versus and Bravo.
VCI, which also sells automation software, has moved strategically over the past three years to expand its cable business. Its revenues are split about 50/50 between broadcasters and cable programmers, according to Foss, which has helped the company weather the current environment.
VCI also released a new product at NAB, Verity, which it is still beta-testing. Verity consists of new software code that will run on existing hardware. It is 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; it also provides real-time inventory management.
Overall, broadcasters have been very conservative about upgrading their systems, Foss says. “We've seen incremental spending, but we haven't seen big system spends,” she says. “There are not a lot of big projects or people making big systems conversions. Broadcasters are in down-and-dirty survival mode. There are a number of projects in cable. But a lot of startup cable channels haven't been able to get funding.”
Both broadcast and cable customers are looking for more efficiency in managing their spots, more agility in changing their program schedule, and better spot reporting and analysis, Foss says. Stations in particular are putting more effort into analyzing and pricing spots to stay competitive.
Harris has seen a similar economic impact on broadcast customers of its OSi-Traffic system; these include station groups like Sinclair and digital multicast channels like Retro Television Network. Also affected is the associated AdConnections sales software, which is used by about 200 stations.
“We continue to see pressures on our broadcast clients related to the overall advertising spend, so we continue to focus on ways to achieve efficiencies and minimize costs while maximize revenues,” says Harris' John Patrick, product director for North American media. “Cable has been less impacted, and we're very focused on bringing OSI into that space.”
Harris is working to provide more powerful integration between OSi-Traffic and OSi-AdConnections by importing Nielsen ratings data into AdConnections and comparing it with real-time avails data from the traffic system. “We'll have a BI [business intelligence] component release this year that will integrate that with reporting, and help utilize more of the real-time data we're getting from traffic with ratings data from Nielsen,” Patrick says.
On the cable side, Harris used the NCTA show last March to introduce OSi-CableNet, a new traffic and billing system specialized for cable networks' unique requirements. Functionality includes spot serialization, management of secondary events, daily audience deficiency unit analysis and interactive reporting tools. The system includes real-time reporting and Live Update, a feature that promptly and accurately relays day-of-air changes and updates between traffic and the automation log.
In addition, OSi-CableNet integrates with leading cable business management systems including Invision's Dealmaker ad sales system and StorerTV's SIMS program scheduler, as well as Harris' ADC and D-Series master control automation products. OSi-CableNet is being beta-tested at three sites, with each focused on a different integration.
“We're focused on a lot of integration with Dealmaker on the sales side,” Patrick says. “It's a real-time integration where we bring their contract in, it's updated on the OSi side, and then it's posted back to Dealmaker and SIMS on the program side. With [Harris] ADC and D-Series, it has live log functionality where you can manage the schedule out of traffic within minutes of air, and get a real-time reconciliation of on-air back into traffic.”
OSi-Traffic also supports live-log functionality through the Broadcast eXchange Format (BXF), the data-exchange and messaging standard that is designed to allow traffic systems to communicate seamlessly with master control automation. The goal of BXF is to make it easier for traffic departments to handle late orders from the sales staff by having the traffic system automatically communicate schedule changes to the station automation system. Instead of making last-minute changes manually, a process that is prone to errors, BXF's data exchange capability ensures that the right information gets to master control, billing and other affected parts of the plant.
While traffic and automation vendors have extolled the virtues of BXF for years, the technology's adoption by stations has been relatively slow. For example, to date Harris has only implemented BXF with Telemundo, which has been live with the technology for about a year.
“It takes time for clients to adopt it, because it can drive organizational changes,” Patrick says. “But there is definite value in it.”
Patrick expects that BXF will gain traction as more groups move to a centralcasting model, in which last-minute schedule changes at the station level can be automatically communicated back to master control playout systems at a remote hub.
Managing online inventory
One improvement broadcasters are asking for today is the ability to easily manage online inventory through OSi-Traffic. A couple of clients are using the existing system to manage Web ads, according to Patrick, “but it's cumbersome for them.” So the next major release of OSi-Traffic will reduce that complexity with a new Internet component that will allow stations to attach a contract for Web advertising to an on-air ad deal and generate one bill.
“It will also track Website hits and whether the station met their commitments,” Patrick adds. “We're working on that today—it definitely has been a major request from our client base on the broadcast side.”
One traffic-system vendor that already supports multi-platform inventory management is U.K.-based Pilat Media, which counts station groups Media General and Fox among its broadcast customers and Discovery International, Scripps Networks, Showtime and Playboy TV as cable clients. Pilat's IBMS (Integrated Broadcast Management System) is not just a traffic system but is instead designed to be a comprehensive management system for a broadcaster, cable programmer or pay-TV operator. It includes various functions including sales, program scheduling and rights management.
Regardless of the market, IBMS users are looking for three things when it comes to trafficking commercials, says Pilat CTO Bob Lamb: more efficiency, faster reporting and more in-depth analysis.
“Everyone is looking for efficiency,” Lamb says. “Customers know that having a traffic system for every network is not going to work. But now people are moving to a single system to deal with not just traffic, but everything else on all the other platforms, such as scheduling ads for a VOD service or Internet site. IBMS has always been able to do cross-platform campaigns and cross-platform traffic, and that's starting to get some traction.”
For U.S. broadcast customers like Media General and Fox, one of the drivers for adopting IBMS in a centralized traffic configuration is to improve reporting and analysis among far-flung stations.
“If you have a spot in Boise, Idaho, selling for this value and one in New York selling for this value and you want to compare them, you can now,” Lamb explains. “When you have disparate systems, there was no way to do that, and a report could take several days.”
Pilat hasn't been rolled out across all the Fox stations yet, and Media General is still in the early stages of shifting to Pilat IBMS from legacy Harris Encoda systems across its 19 stations, in a deal first announced in 2006.
“It takes time to train every user, before you march forward to the next station,” Lamb says. “But once you've got the model right, it's just a matter of repeating the model.”
For Media General, the pace has been intentionally slow, says Ardell Hill, president of broadcast services. That's partly because Media General decided to postpone the switch until after the 2008 election cycle, and partly because the station group was focused on having the system customized to its exact needs. “We have cleared some significant challenges and hurdles in terms of the early startup process, and progress is going very well right now,” Hill says.
Media General is one of several station groups to hub its traffic database in a centralized location, while leaving the actual commercial insertion gear at individual stations. So it first had to transition its central traffic hub in Tampa to the Pilat system; then it switched local operations at WFLA Tampa. Next came WCMH Columbus, Ohio, followed by WSAV Savannah, for both its primary and multicast channels. WSPA Spartanburg, S.C., is currently about two weeks into the six-week conversion process, and has started training staff and migrating its traffic database.
Hill says the biggest change in moving to Pilat is IBMS' ability to manage multiplatform ads. That was something Media General's Encoda systems couldn't do.
“You can book an Internet ad on [IBMS], with single billing for everything,” he says. “So an AE [account executive] can go out and build a multimedia account and ad schedule for a customer, and have all of that booked, tracked and billed out of a single system. Previously, that wasn't possible.”
A new player in traffic software is Argentem Corp., a Reno, Nev.-based firm run by former Florical Systems president and founder Jim Moneyhun. The company, which formed in 2006 and also sells automation software, launched its ATBTraffic sales, traffic, billing and reporting system at the NAB show last April. Based on Microsoft's .NET framework, the ATBTraffic system is able to generate real-time, Web-browser-based reports and interfaces seamlessly to popular front-end sales systems like WideOrbit's WO Sales.
So far, ATBTraffic has been deployed at Puget Sound Television in Redmond, Wash. Puget Sound is using it for its KPST and Azteca stations, and has integrated it with Argentem's Argus on-air automation system to operate the stations in a fully unattended mode.
Moneyhun says Argentem is able to keep ATBTraffic's price low by developing its platform on current software and handling much of its training remotely through Webex presentations. He says that the traffic manager at KPST had actually never done traffic in a TV station, only for a newspaper, but she was still able to get up to speed rapidly.
Hubbing and remote management is an increasing trend for the small-market stations Argentem is targeting with ATBTraffic. “We have one broadcaster with plans for going into four markets in the Northwest, but they haven't done that because of the economy,” Moneyhun says. “They want to be able to operate any one of these stations in four cities in any one of four locations. I think it's probably reasonable for a large number of operations to do that.”