Give your bread to the baker to bake

Regional broadcasters are facing increasing challenges to maintain their competitiveness and flexibility in a period of rapid change. The media industry is forcing broadcasters to develop new business models, deliver to multiple platforms and produce content more efficiently, while  maintaining a low cost base. Rather than looking inwards to make these required changes, working with specialised suppliers and service providers offers an efficient alternative.

It has been common practice across a wide-range of different industries such as IT and telecoms, to outsource, but as yet hasn’t been embraced seriously by regional broadcasters on a large scale. The broadcasting industry has been more resistant to the concept of outsourcing, with expertise traditionally kept in-house across the production-to-delivery value chain. This model is inherited from the days when there was typically just one state broadcaster in each market and so naturally, all the key functions tended to fall under one roof.

Outsourcing non-core functions and activities is an effective way to make transformational changes and deliver significant cost savings. This gives the broadcaster flexibility to respond to market needs with a smaller, leaner organisational structure without worrying about a large in-house workforce. Broadcasters are able to concentrate on their core business and competitive strengths, while benefiting from better service levels and enjoying easier financing. Specialist service providers should possess the necessary expertise required for quality of delivery, with SLAs (Service Level Agreements) established to govern the relation between the two parties. By moving a service outside of its own organisation, it’s often easier for a broadcaster to measure the performance of a certain activity compared to having it in-house with less efficient mechanisms of accountability and incentives in place. Broadcasters’ core business is aggregation and publishing of content.

Their job is to invest in programme making and acquisition of content attractive to their audiences. Both producing and distributing content is becoming more complex and the types of outsourcing options available to broadcasters are tremendously varied. Studios, play-out, and delivery (satellite, terrestrial, IPTV,etc…) facilities and services are perhaps the most straightforward to outsource to service providers. Underlying functions such as technology and support can also be outsourced, which may also prove to be effective.

Generally speaking, it is not necessary for broadcasters to own their studios except in certain instances, such as with news studios which are usually integrated with core functions such as the newsroom and editorial control. The seasonal nature of television production and broadcasting keeps studios idle for long periods at a time. This means that better efficiency can be gained by ‘usage optimisation’ and facilities can be shared by multiple production companies and broadcasters.

Playout service providers manage large numbers of TV channels and have the resources in place to deploy the latest broadcast equipment and techniques for multiple clients, saving everyone money. In this digital age, where many channels can be played out from a single room, whywould broadcasters build their own playout centres and hire the operational and technical support staff when this can be provided by someone else at a lower cost? In the analogue age, it made sense for the broadcaster to playout its own channel(s) when there was a linear relation between the number of channels and the cost of running them and there was no great economy in running multiple broadcast suites over running one.

Economies of scale in the digital age today offer much greater efficiencies and savings. There is also the resourcing side to consider. Working with freelancers is another efficient form of outsourcing. Broadcasters can reduce their overheads significantly by keeping full-time employee numbers low and acquiring the services of creative and technical professional freelancers.

Currently, content development and creative functions remain largely in-house with only larger regional broadcasters choosing to outsource – many of these companies have been outsourcing channel branding and programme formats development to specialised companies for some time. With animated programmes becoming increasingly popular in the region, the role of service providers offering the right skilled talent pool and capabilities across the Middle East and globally are playing an increasingly vital role in the industry. An old Arabic proverb says: “Give your bread to the baker to bake, even if he eats half of it”. You may argue about the second part, but the first part is definitely worth considering.

Hasan R. Sayed Hasan is head of twofour54 intaj and writes a quarterly guest column for BroadcastPro ME. He has also recently agreed to be part of themagazine’s Technical Board of Advisors.