Siemens Business Services, which includes newly acquired BBC Technology and has U.S. headquarters in San Jose, Calif., presented its views on new business opportunities in media and entertainment–driven by changing audience needs and developing methods of distribution–during a global press workshop held recently at the BBC in London.
“Customers want content any time, any place, and on any device,” said BBC chief technology officer John Varney. Therefore, he concluded, content cannot be linear.
At the same time, “the world has changed to an IT infrastructure that is flexible and provides all sorts of services,” added Ed McDermid, Siemens VP of business development, North America.
Reflecting these changes, Siemens has been building its outsourcing business and new services. For one, Siemens is embarking on the first stage of U.S. trials for what the company calls its Digital Advertising Project, an effort designed to explore the possibilities of targeted advertising. As the first step, Siemens is in the process of deploying its first 50,000 points of presence for digital advertising, with screens at locations in retail and other consumer outlets. Siemens is providing technology, installations and management of the sites. The agencies for the first advertisers–two major international brands that Siemens declined to name–are creating the content for the displays.
“Content and the business models will be the core differentiator in business as we go forward,” McDermid opined, adding that this is why Siemens’ strategy is to offer the technology services, while freeing advertisers and their agencies to focus on their strength–the creative.
Siemens is also involved in the emerging field of content creation for mobile devices such as cell phones and PDAs. In the U.K., where this is more common, Siemens’ “Content Factory” unit is responsible for taking content produced for television, and repackaging it for distribution on mobile devices. Video distributed in this manner in the U.K. is enabled primarily by “3G” technology.
A rollout of this 3G technology is just beginning in the U.S. through a series of trials, and McDermid predicts that it will become common in the next 24 months.
Varney reported that the BBC is already delivering content to mobile devices in the U.K., primarily news and sports at this point. In the summer, he said it would begin testing promotional content for distribution on such devices.
CONTENT IS STILL KING
The press event included a presentation from James Healey, senior analyst focusing on media and broadcasting technology, at London-based Datamonitor. He emphasized that content creators would soon need to deliver multiple formats for distribution channels from television to mobile devices. Therefore, he suggested, an efficient IT network is vital, with digital asset management and format transcoding capabilities.
Healey opined, “the biggest single problem is that content owners have their heads in the sand.” He said many rationalize that if a traditional system works, there is not a compelling reason to upgrade. “But that means that they don’t take advantage of potential new revenue opportunities,” he commented.
With this in mind, he made a case for outsourcing. The first example was that the BBC has awarded a 10-year contract valued at 2 billion pounds to Siemens, essentially outsourcing services including asset management and technical support, and allowing the BBC to concentrate on content creation. Siemens estimates that outsourcing this work saves the BBC roughly 20 million pounds per year.
Healey also pointed out that Discovery Channel outsources its global playout services to Santa Monica-headquartered Ascent Media Group (parent of such companies as Company 3, Santa Monica and New York; and R!OT, Santa Monica, New York and Atlanta).
Healey concluded that outsourcing of services could reduce costs, particularly in this period of rapid technological advancement.
