Traffic systems—the hardware and software that hold a TV station or network's massive database of sales data and scheduling information —have suddenly become the hottest segment of the station business.
Technological improvements make it easier to track ad inventory, smooth out last-second on-air scheduling changes, and organize sales reports in seemingly limitless ways—all of which contribute favorably to a broadcaster's bottom line.
“The new traffic systems are the most exciting development in broadcast technology in the last 30 years,” says Del Parks, Sinclair Broadcast Group VP, engineering and operations. “Things like Panasonic P2 [tapeless cameras] are interesting, but it's the traffic system that really drives the revenue portion of our business.”
And with broadcasters facing more pressure than ever to maximize revenue, the new systems arm an executive team with the knowledge and power to maximize revenue out of its inventory, say clients. “A centralized database simply makes it easier to manage the business,” says Kristen Fechner, Marketron senior VP of business strategy. “It provides the team with the business analytics and intelligence they need.”
By centralizing all of the sales data from multiple stations on one database, executives can access a range of sales reports to get a better handle on buying trends at one or a number of stations with just the click of a button. “Now when our corporate offices want reports, everyone is looking at the same information,” says Parks. “Wall Street likes accurate data that can help them see what our top advertising categories are.”
Parks has spent the past year transitioning Sinclair to a traffic system from Optimal Solutions Inc. (OSI) that runs on a Microsoft SQL Server 2000 Enterprise Edition and the 64-bit version of Microsoft Windows Server 2003 Datacenter Edition. “We had a day-to-day plan for five weeks that guided the whole transition process,” he says.
The new systems, however, aren't as easy as plug and play. Traffic systems are usually sold by vendors as a multi-year licensing deal that requires stations to ensure the system they choose today will best meet their needs tomorrow and thereafter. And figuring out a future business model is tougher than ever with a rapidly changing technological landscape. Station managers need to do some serious soul searching to figure out where they want their business to be in two to three years—and make sure the system can accommodate new sales models and innovations.
“Using the new tools without replacing the old business model makes the new system nothing but the old one with new lipstick,” says Mark Darlow, Harris Broadcast product strategist for the H-Class traffic and automation system.
Keeping on top of revenue streams that are constantly growing or shrinking is also a burden on system vendors. “By its nature, a traffic system is about keeping track of instructions [for when a spot or program should be on-air],” says W. Lowell Putnam, president and CEO of traffic vendor Video Communications Inc (VCI). “Increasingly, the question for traffic vendors is, how do you keep track of different kinds of instructions [for TV, Internet and other distribution methods]?” VCI's Stars II+ system, for example, can interface with automation systems for the playout of not only spots and programs but also logo or bug insertion, squeeze-backs (spots that run during a show's closing credits), tickers and voiceovers.
In the future, every station will take advantage of the advertising opportunities known as secondary events, such as onscreen banners, graphic bugs and product placement. Dan Yuvel, SintecMedia director of marketing, stresses how important it is that those new advertising opportunities are available through a single system: “Those shouldn't need separate streams of business [that require separate invoicing and billing systems].”
SintecMedia approaches those opportunities with its Sales Management Module. (Traffic systems, like automation systems, are often sold in modules so an organization can tailor a system more closely to its needs.) The terms and conditions of each advertiser agreement (including discounts, payment terms and bonuses) can be set up for one or more types of campaigns. Once a schedule is confirmed by the station's client, SintecMedia's OnAir system gets the spot into a playlist and in front of viewers.
“We have full support of secondary events,” says Yuval. “It's part and parcel of the system itself.”
New traffic systems, however, are about more than just consolidating sales data related to new revenue streams. Another plus is that they are frame-accurate. Timing information, especially on incoming syndicated content, has never been completely accurate, leaving stations to manually retime programs in an effort to reclaim dead airtime and fit in an additional spot. With frame-accurate timing, the system automatically knows how much more time is available, so that station personnel are clued in as well. And with the use of video servers to store spots and programming, inserting a spot into the program stream is a more streamlined process.
“A lot of things that were barriers in the past to last-minute sales, like having to find a tape with a spot and then mount it for playout, are now close to zero,” says VCI's Putnam. “Broadcasters can better respond to the market. The more you can shrink the window between the [advertising-sales cutoff] and the time to air, the more revenue a station will make.”
Harris Broadcast is also helping customers reclaim dead air and handle secondary events with its H-Class Media Business Application, an outgrowth of the company's acquisition of Encoda Systems late last year. In recent years, Encoda, the nation's leading traffic- and billing-system provider, was chastised for being behind the times, because much of the core computing code had been written decades before. With Harris' resources, the platform was revamped.
The new product has a wide breadth, with modules handling traffic and automation needs. Scheduling, billing, airtime, sales, and digital rights- and content-management can be tied into the automation side of the H-Class offering, giving users one-stop customer support and tighter integration. But Harris makes it clear that both the traffic and automation parts of the system are open to work with whichever vendor a customer wants. “It's not just a traffic engine in the classic broadcast model,” says Darlow. “It supports Internet sales and other [advertising media] that have very different functional requirements.”
Making multicasting work
Another development that changes the demands on a traffic system is digital multicasting. Stations that decide to slice off a portion of digital broadcast spectrum to deliver weather, news or other channels face a challenge: Multicasts typically don't drive enough revenue to sustain their sales and production staff. The result is a greater dependence on automation and a need for a traffic system that can help the channel become a revenue source, not just a capital drain. “H-Class is targeting that spectrum,” says Darlow.
Traffic-system vendor Broadview was selected to handle digital multicasting for PBS stations. “With a system like ours, it becomes easy to replicate advertising from one channel to another,” says Broadview President Michael Atkin. “All the data resides in a central database, so the corporate group can slice reporting across individual markets.”
Broadview, like Sinclair, is addressing the ability for a sales team to sell spots closer to airing. Traffic systems have historically relied on batch dumps of sales data to arrive at a certain point during the day. That means a sales team is often working with outdated information and may be selling spots that have already, in fact, been sold. In an effort to cut down on make-goods for spots that didn't run, newer-generation traffic systems are designed to offer live data.
“Business today moves so quickly that you can't wait for the batch run to be done overnight,” says Atkin. “With sales managers and traffic-system operators becoming much more computer- savvy, we can give them access to tool sets for more-accurate reports.”
The new traffic systems can also offer broadcasters substantial savings. Centralizing a database, for one, might pave the way for staff, phone-line or office-space reductions.
“There are some efficiencies,” says Putnam, whose Stars II+ system was recently selected by Canadian broadcaster CHUM Tele­vision to tie 31 of its stations together in a centralized hub. “Centralized accounting and billing, receivables, and even centralized master control are possible, [although they] require a more robust infrastructure.”
Parks says that, by combining the licensing and maintenance fees and retiring 34 IBM AS/400 systems, the company is saving $500,000 annually. “We wouldn't have been able to get into the digital world without a modern traffic system,” he says.
Sinclair is saving in other departments, too. Parks says the company now saves hundreds of thousands a year on, of all things, paper: “We no longer have to buy greenbar/bluebar paper for printing out reports.”