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Next Generation Technology DeliveryHow broadcast and media can shift to multi-speed technology delivery to compete with digital natives

Survival of the technology fittest | 192 | Next Generation Technology Delivery

Broadcast companies, especially those that distribute directly to consumers, have built their businesses around the notion that high-quality content is the key to success. In today’s world, however, high-quality content is necessary, but no longer sufficient.

We are entering an era of “Digital Darwinism,” where success will be awarded to companies that can challenge existing business and operating model assumptions and adapt to the new, fast-changing market and ecosystem. To meet this challenge, companies must design and execute hyper-compressed innovation cycles and approach technology with unprecedented agility.

Broadcasting companies, in particular, face increasing competition from agile digital natives with vastly different capabilities and global scale. These digital natives are skillfully using platforms and ecosystems to bypass traditional competitive barriers (e.g. frequencies, networks and proprietary devices) and encroach on traditional markets with new offerings. They are able to innovate at an astonishing pace, reacting to market trends at speed with a keen understanding of consumers via engaging digital platforms.

This paper builds on our Bringing TV to Life V business analysis of the fast-changing video industry. It discusses how incumbent broadcasters can adopt a multi-speed technology delivery approach to accelerate innovation and meet the digital natives on their own playing field.

Next Generation Technology Delivery | 3

https://www.accenture.com/t20150709T093436__w__/us-en/_acnmedia/Accenture/Conversion-Assets/LandingPage/Documents/3/Accenture-3-LT-2-Bringing-TV-To-Life-V.pdf

A wave of disruption is breaking over the broadcasting industry. Digital natives are leveraging their uniquely digital heritage to discover—and deliver to—a deep understanding of consumers’ expectations. And they’re mastering the capabilities needed to personalize offerings and target consumers effectively.

How should traditional broadcasters respond? In our view, a major evolution in culture, skills, practice, and investment focus is required.

At a glance

THE RISE OF THE DIGITAL NATIVESGoogle, Amazon, Facebook, Netflix and Apple… At one time these names were on the periphery of broadcast and media. No longer. These digital natives are thriving as innovators, using business platforms enabled by technology to stake their claim on new markets. The keys to their success include:

1. INNOVATION AT SPEED

Digital natives are first and foremost innovation-driven companies, applying “start-up mentality” at a massive scale.

2. SOFTWARE-ENABLED BUSINESS PLATFORMS

The traditional wisdom is that great content sells. But most companies under-estimate the capacity of even a weak platform to innovate and thereby produce content that becomes even better.1

3. RELENTLESS FOCUS ON OPTIMIZING DELIVERY

Accelerate feature delivery through software engineer-ing disciplines to enable innovation.

4. COLLABORATIVE CULTURE THAT’S UNAFRAID TO FAIL

The raison d’être for technology delivery is supporting business innovation in a constant “Build-Measure-Learn” innovation cycle.

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4 | Next Generation Technology Delivery

1 UBS Global Research: IT Hardware - Platforms Beat Products: Platform Economics Transcript, October 2014

1. KNOW WHERE TO START…AND START FAST

Prioritize accelerated innovation and new practices where they differentiate the most: digital customer-facing systems of engagement.

2. ENABLE MULTI-SPEED DELIVERY IN CORE APPLICATIONS

Decouple core systems to allow speed where it’s needed by adopting new practices: Agile, continuous delivery and flexible architectures based on APIs, microservices, and virtualized cloud solutions.

3. ALIGN FOR LONG-TERM SUCCESS

Traditional barriers between Engineering and IT must fall as broadcasters shift to an interactive, software-enabled future.

4. FOSTER NEW SKILLS AND CULTURE

The Build-Measure-Learn model that’s required to support accelerated innovation requires a different corporate culture and capability from broadcast’s heritage.

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HOW BROADCASTERS CAN RISE TO THE CHALLENGETraditional broadcast companies can adopt these approaches and practices to level the playing field and become the disruptors—rather than the disrupted:


In the era of Digital Darwinism, society and technology are evolving faster than many companies’ ability to adapt. This is creating an unforgiving and fast-changing environment where digital natives like Google, Amazon, Apple, Netflix and Facebook vie to establish themselves as the go-to providers for content. They’re marshaling a digital heritage that gives them a unique understanding of how digital consumers behave and what they want. And new entrants like Twitch emerge at pace as the barriers to entry diminish through the easy availability of platforms, software, and infrastructure.

Their results are impressive. Netflix added 3.3 million subscribers in the second quarter of 2015, raising its global subscriber base to 65.6 million subscribers2 (international subscribers accounted for over 70 percent of this growth in the second quarter).

Google-owned YouTube emphatically beat expectations when it recently announced a 40 percent year-on-year surge in

advertising. And Amazon has benefitted significantly from their bundled value proposition (accelerated shipping, video streaming, music and cloud storage).3 Figure 1 highlights the market capitalization success of digital players—and compares it to that of traditional broadcasters.

Many of these companies are creating their own content. But that’s not what’s driven their success. They are first and foremost innovators. They have created software-enabled business platforms that allow them to innovate rapidly, at scale.

The key elements of success to date are:

1. Innovation at speed

2. Software-enabled business platforms

3. Relentless focus on improving the platform and optimizing delivery

4. A collaborative culture unafraid to fail.

Competing in the Era of Digital DarwinismBroadcasters need to look beyond content to multi-channel interaction and engagement via software-enabled platforms.

2 Netflix Hits 65 Million Subscribers.” Stastista, July 16th, 2015. http://www.statista.com/chart/3153/netflix-subscribers/3 Amazon.com Updating The Long Thesis.” RBC Capital Markets, June 15, 2014. https://rbcnew.bluematrix.com/docs/pdf/1d9b1041-3977-4a12-a89b-d358f2ab6c66.pdf

FIGURE 1 | Digital native market capitalization and growth relative to top broadcasting companies

Average Market Capitalization of the Top Industry Players in the broadcast and digital industries. Digitals include Amazon, Google, Facebook and Netflix. Twelve firms used to calculate average for Broadcast.

Source: Bloomberg.


THE RISE OF THE DIGITAL NATIVES

TRADITIONAL MEDIA

TRADITIONALMEDIA

$28,654

TRADITIONALMEDIA

$17,192

SUPER PLATFORMS

2012 20152012 2015

$315,584

$181,900

$28,654$17,192

SUPER PLATFORMS$315,584


TRADITIONAL MEDIA

TRADITIONALMEDIA

$28,654

TRADITIONALMEDIA

$17,192

SUPER PLATFORMS

2012 20152012 2015

$315,584

$181,900

$28,654$17,192



TRADITIONAL MEDIA

TRADITIONALMEDIA

$28,654

TRADITIONALMEDIA

$17,192

SUPER PLATFORMS

2012 20152012 2015

$315,584

$181,900

$28,654$17,192



TRADITIONAL MEDIA

TRADITIONALMEDIA

$28,654

TRADITIONALMEDIA

$17,192

SUPER PLATFORMS

2012 20152012 2015

$315,584

$181,900

$28,654$17,192



2015

2012

“Many content industries—you see it in publishing, you see it in movies, you see it in newspapers—think that they are immune to the force of the Internet because they have the best content. I argue that’s a fallacy, that most of these companies underestimate the capacity of even a weak platform to innovate and thereby produce content that becomes even better.”

MARSHALL VAN ALSTYNE | Associate Professor at Boston University and Research Scientist at MIT, as quoted in UBS Investment Research October 2014


Content + Platforms Creating New Markets

Twitch has captivated the world with its ability to create a billion-dollar business in three years by building a platform that streams PC and console gameplay, live e-sports events and original shows. Like the ESPN of video games, Twitch’s viewing figures for events such as the recent Evolution 2015 gaming championship are starting to rival those of the most popular broadcast TV shows and events. Twitch has become the de facto “social video” destination for gamers. Perhaps this isn’t surprising: Accenture Research (Accenture’s 2014 Digital Consumer Survey) shows that gaming and user-generated content are becoming more popular content segments.

Twitch is a platform business, in both technology execution and business concept. Built on Amazon Web Services, it’s been able to quickly scale and innovate to support over 100 million unique monthly viewers. According to network researcher DeepField Inc, it’s become the fourth-largest source of US internet traffic, trailing only Netflix, Google and Apple. As Twitch grows, it not only generates ad revenue but also provides access to a whole new consumer base to which Amazon can sell gaming software and equipment.

8 | Next Generation Technology Delivery Accenture Video Solution 3

4 As described by Eric Ries in “The Lean Startup” (http://theleanstartup.com). As he explains: “The fundamental activity of a startup is to turn ideas into products, measure how customers respond, and then learn whether to pivot or persevere. All successful startup processes should be geared to accelerate that feedback loop”. He goes on to explain that start-up concepts can (and do) apply to businesses of all sizes.

FIGURE 2 | Netflix and Canary Testing

Netflix has accelerated the “Build-Measure-Learn” loop concept using software engineering practices and analytics capabilities to enable low-cost innovation and real-time customer insight development. Teams develop hypotheses about how to improve their platform. Then they develop multiple prototypes and carry out rollouts to a small subset of customers. The results are measured and compared to a baseline of 1,000+ metrics to generate insights and results. Using data visualization, they can quickly validate hypotheses, generate insights and take action to scale or refine. Source: Netflix, Accenture analysis.

DEVELOPMENT PROCESS

Hypothesis

Prototype

Select Rollout

Measurement

Analysis

EXPERIMENT CANARY TESTING

New code run on about 1% of production traffic

Automatic comparison tobaseline on 1,000+ metrics

to generate insights

Visualisation of metricsto facilitate

decision making

Source: Netflix, Accenture analysis.

1. INNOVATION AT SPEED

Digital natives are first and foremost innovation-driven companies. In part, they have built their acute understand-ing of digital consumers by mastering and accelerating the Build-Measure-Learn loop concept.4

They translate ideas into products for small-scale customer testing, to gain real customer insights via analytics, and to iterate quickly so they can zero-in on customers’ unspoken—but demonstrated—wants and needs. The quicker the learning loop, the faster the business can learn, grow and adopt new products. Digital natives use technology to apply these principles on a massive scale, at speed (see Figure 2).

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2. SOFTWARE-ENABLED BUSINESS PLATFORMS

The traditional wisdom is that great content sells. While that may be true, research shows that an effective software-enabled business platform is a real threat to standalone products. A platform that brings together an ecosystem of consumers and business partners becomes more valuable as more people use it. It allows the business to constantly evolve and tailor offerings in response to market dynamics.

Netflix over Blockbuster, Apple and Spotify over Columbia House, Amazon over Borders. These cases all graphically illustrate the triumph of software-enabled business platforms over content alone, however excellent that content

may be. Broadcasters are subject to the same rules of disruptive innovation as have been applied to so many other industries,5 documented by Clayton Christensen in “The Innovator’s Dilemma: When New Technologies Cause Great Companies to Fail”. Christensen further advises a focus on being a learning organization when he says, “But in disruptive situations, action must be taken before careful plans are made. Because much less can be known about what markets need or how large they can become, plans must serve a very different purpose: They must be plans for learning rather than plans for implementation.”

Digital industry platforms and ecosystems are fueling the next wave of breakthrough innovation and disruptive growth across industries. The approach exemplified by the digital natives transforms IT from a back-office function to a critical enabler of business speed, innovation and competitive differentiation.

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Rather than a heavy investment in proprietary equipment and appliances, digital natives’ infrastructure is a uniform utility in the cloud. Differentiation and features are defined by software (vs. equipment), which allows for lower capital costs. More importantly, however, this allows agile changes in features and product.

Netflix offers a particularly interesting illustration. In 2007 Netflix was in the mail-order DVD business. Technology was monolithic, as it is for broadcasters today. Everything was tightly coupled and delivered in large releases. If a developer broke something, testing stopped, and all feature progress halted. The same thing happened in production, where one defect would block functionality from customers6 (where the “learning” part of the Build-Measure-Learn loop is realized).

The company has evolved dramatically. Netflix is now fully supported on Amazon’s Web Services (AWS), and has

5 2015 Accenture Technology Vision. “The Platform (R)evolution: Defining ecosystems, redefining industries” https://www.accenture.com/us-en/it-technology-trends-2015.aspx6 Adapted from “The State of the Art in Microservices” by Adrian Cockcroft 7 ibid.8 Netflix’s View: Internet TV is replacing linear TV, July 20159 Gartner: IT Key Metrics Data 2015: Key Industry Measures: Media and Entertainment Analysis: Multiyear, December 2014

FIGURE 3 | The Pace of Technology Delivery

Representative areas of optimization to improve agility and feature velocity.

From public sources and Accenture research

shifted to API’s and microservices for interfaces. This effectively decoupled components of its platform, allowing feature-independent changes and a con-tinuous deployment approach. As a result, Netflix was able to rewrite 80 percent of its code base in a 24-month period.

Software-enabled platforms generate a wealth of new usage data. According to Netflix,7 more than a billion metrics per minute flow into Atlas, its time-series telemetry platform. Using this data, the company was able to predict the success of “House of Cards”, and invest confidently in follow-on content creation.

They continue to invest in their platform, and announced plans to spend over $700 million on technology and development in 20168; 12.7% of their 2014 revenues. Compare that to 4% of revenues in the Media and Entertainment Industry and it shows the value digital natives place in technology.9

3. RELENTLESS FOCUS ON IMPROVING THE PLATFORM AND OPTIMIZING DELIVERY

High-performance technology is all about enabling business agility. It is enabled by three primary factors: frequent introduction of business requirements, lead time for change, and mean time to recover from failures.

A continuous delivery capability is key to mastering delivery and accelerating the Build-Measure-Learn cycle required for innovation. The software development process is in essence digital natives’ “manufacturing plant”. And just as a lead-ing manufacturer invests in automation to improve speed, quality, and flexibility, they have invested in automating and accelerating changes to their platform. The digital natives achieve continuous delivery via agile methods and develop-ment automation to constantly improve the platform (see Figure 3).

50% codechanges per month

DEVELOP

Approximately50,000 builds per day

BUILD

Approximately120 million auto tests

per day

TEST

Approximately10,000 code changes

per day

SUBMIT

Google created a central tools team with the sole charter of improving developer agility through faster feedback cycles. Representative areas of optimization to improve agility and feature velocity:

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“Our job is to accelerate Google; we manage everything related to writing code, testing, debugging; our tools provide a uniform experience throughout the company.” ASHISH KUMAR | Engineering Manager, Google

Google created a central tools team with the sole charter of improving developer agility through faster feedback cycles. Representative areas of optimization to improve agility and feature velocity:

4. A COLLABORATIVE CULTURE UNAFRAID TO FAIL

The culture includes a different breed of technologists who operate at the front end of enabling rapid business innovation. Technology organizations in digital natives are small, data-driven, and entrepreneurial. Their ethos and raison d’être is to support constant innovation for the business. Although there’s a long-term disruptive outlook, short-term, rapid decision-making is the norm. The crucial capabilities are speed and a data-driven approach. Small, incremental changes can be reversed or improved easily when backed with a continuous delivery infrastructure.

A number of digital natives have succeed-ed in growing a team-based culture that can deliver end-to-end without excessive handovers between teams. These companies have a significant advantage over traditional organizations with their large, often impersonal silos that focus on one specific function and don’t easily identify with the business problem to be solved and/or the solution that is being delivered.

Just as important to digital natives is the way the business interacts with technology. Integrated teams and enabled business product owners embrace rapid innovation, a learning culture and a mindset adaptive to rapidly changing customer expectations and competitive pressures.

This practice is backed by management. At Google, for example, technology teams implemented a “reliability budget” with production reliability targets. Failures lower the SLA scores, and once the budget is consumed, the teams are not allowed to push additional releases and features. This approach incentivizes developers to value stability (and not just feature changes), and it provides controls that allow testers and the business to permit changes (rather than focusing on stability).


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Accenture Video Solution 3

Given the disruptions in the broadcast industry and the market expectations for growth, the technical delivery capabilities of the broadcast industry are not fully aligned with making their business organizations successful. This can cause problematic constraints where either technology capabilities limit business agility, or worse, limit the ability for the business to confidently move into new direct-to-consumer revenue models which are more akin to those currently successfully enabled by digital natives.

The key challenges faced by traditional broadcasting companies include the following:

• Silo’ed technical organizations

• Legacy content and control supply chains

• Digital as an isolated versus enterprise enabling capability

• Lack of ‘product management’ embedded in technical delivery

SILO’ED TECHNICAL ORGANIZATIONS

Disaggregated delivery silos hinder integrated solutions and create a “quality vs. speed” mindset.

Traditional broadcaster technology organizations are highly segregated. Core media technology is the domain of Engineering, with innovation based on the latest specialized equipment created specifically to support the creation, pack-aging, and/or distribution of traditional content. While technically adept at specialized media equipment, these

organizations lack the architectural skills and systems integration rigor to manage rapidly evolving IP-based solutions.

In the same companies, the IT organiza-tion is typically restricted to running corporate functions and applications that support the media supply chain (e.g., scheduling systems, ad trafficking). While they are supporting business solutions, the amount of innovation is limited as these are generally core enterprise systems which need to support a relatively saturated business model (e.g., broadcast ad sales), and thus speed-to-market for anything disruptive or consumer-facing is not part of their remit.

To make matters even more complicated, individual business units or markets have their own semi-autonomous technology organizations driving divergent solutions—especially when they view core technical organizations not aligned to their goals . These ‘digital islands’ give the appearance of innovation, but are limited to very specific business functions. A common example is the ‘digital’ organizations within broadcasters, which deliver front-ends to existing business models—like catch-up TV and promotional sites to drive demand on traditional broadcast channels.

The nature of the work performed by these groups has created deep-rooted cultural differences. For example, engineering organizations are worried about ‘time to air’ more than standard processes, taking advantage of the more vertical nature of their distribution systems to make changes to their systems to get content product out the door with-out adding too much procedural overhead, while IT organizations are worried about not breaking critical business systems which have numerous interdependencies, leveraging best practices from enterprise systems integration. IT thus views those in engineering as ‘cowboys’ while engineer-ing views IT as ‘slow’. What’s needed is the best of both worlds—agile and high velocity with predictable quality.

CURRENT CHALLENGES OF TECHNOLOGY DELIVERY AT TRADITIONAL BROADCASTING COMPANIES


Segregated digital capabilities hinder effective feedback loops that can drive improvement in both the core and emerging business models.

LEGACY CONTENT AND CONTROL SUPPLY CHAINS

Leveraging traditional supply chain technology for purposes of economies of scale across all distribution channels contributes to an environment where new products or concepts can take multiple months to develop, trial and launch.

In broadcasting, most technology investments are understandably tied to supporting the dominant revenue model of the business. This includes media equipment which allows for higher quality content to be distributed on broadcast channels as well as business systems which enable linear advertising revenue to be optimized. When digital product requirements are introduced into these organizations, technical organizations treat them very similarly to their tradi-tional requirements and attempt to lever-age as much of the legacy investment as possible in order to fulfil those needs. While in the short-term this allows for economies of scale, as the requirements for growth are transferred more towards digital-enabled products, the legacy supply chain’s innability to support those requirements will become inhibiting. This is especially true from a technical delivery perspective as “keeping the lights on”

DIGITAL AS AN ISOLATED VERSUS ENTERPRISE ENABLING CAPABILITY

Segregated digital capabilities hinder effective feedback loops that can drive improvement in both the core and emerging business models.

In most broadcast organizations, digital capabilities have been evolved as offshoots of the traditional business, concentrated on next generation technol-ogies to enable lower-priority business models (e.g., ‘me too’ catch-up services) or to help promote their traditional business models (e.g., marketing sites for particular brands). This means that most of the output is dependent upon upstream systems where any digital innovation is highly isolated from the core business.

As consumer demand shifts to on-demand and digital engagement, it should create an opportunity where digital can better enable the traditional business—giving more insights around interests in content, providing the ability to respond quickly to feedback, and enabling a new way to communicate directly to consumers versus broad marketing. The problem is that these capabilities are not being leveraged into the traditional business—either technically or operationally.

nature of the traditional supply chain, built on on-premise hardware hosting legacy software stacks, is not aligned to the “deploy, test, and fail-or-scale fast” model of digital.

This creates a problematic culture that ranges from technology delivery to business and technology governance, where investment and innovation are geared toward solutions that are becom-ing less effective competitive barriers.

While the release strategies and invest-ments on this supply chain can be delivered in a manner that ensures that traditional business functions are not hindered, the resulting economies of scale unfortunately create an environment where dependent downstream digital products may take multiple months to develop, trial and launch. As one executive put it: “I wish I didn’t have to spend US$2m and six months to find out that my customer didn’t like something.” The lega-cy supply chain delivery approach, while adequately supporting a broadcaster’s main commodity of creative content distri-bution, is unfortunately ill-suited to the era of Digital Darwinism, where IP-based solutions, commoditized software, cloud computing, and standardization enable the digital natives to achieve learning cycles tens or hundreds of times faster.



“Project” mindset and governance hinders the ability to learn and respond quickly to the realities of a highly disrupted media industry.


The challenge here is that ‘Digital’ skills are not embedded into the traditional business and technology teams, so they do not have the experience to leverage these capabilities because they are being built out in a separate organization supporting a different business intent. These are both cultural and organizational issues as feedback loops enabled from data collected on digital channels do not make their way into the organization in a manner that is easily digested or viewed as relevant to how the traditional business operates. For example, the way audience is measured in traditional broadcast is very aligned to advertising currency (e.g., viewership by gender and age group), while on digital channels, measurement is a lot more nuanced and complicated, based on multi-dimensional context, implicit and explicit actions, and frequen-cy. Applying these standards that come from digital feedback into the traditional business becomes problematic as they can be viewed as incompatible and distracting.

If one looks to the competition in the digital natives, the opposite is true—all data collected from engagement on the digital platform is leveraged in one way or another in their core business, and the insights derived from it make their way back to their products and offerings.

LACK OF ‘PRODUCT MANAGEMENT’ EMBEDDED IN TECHNICAL DELIVERY

“Project” mindset and governance hinders the ability to learn and respond quickly to the realities of a highly disrupted media industry.

In traditional broadcast engineering and IT, projects are funded which have specific outcomes and end dates, driven generally from a CapEx budget and then moved into support mode provided by shared services. The problem with this model is that in the digital world what is known or expected at the beginning of a project can change dramatically as it is being executed. While this can be very frightening in traditional delivery models, in Agile models, this is expected and encouraged—as embracing change driven by knowledge gained throughout the delivery and deployment process creates more relevant outcomes.

This requires a digital ‘product’ mind set versus a ‘project’ mind set where the out-comes are managed over a longer period of time but benefits are created along the way. The challenge is that budget cycles, approvals, and the methodologies that measure success at traditional broadcasters, at least in the traditional

business, have not been structured in this manner. This results in a ‘project’ being delivered based on a need that was understood months and months ago versus by an accountable party who is always looking at outcomes of the ‘product’ over its lifecycle and adjusting over time.

Moving to a ‘product’ model is not only challenging from a budgeting perspective but also from an operating model per-spective, as this model requires constant negotiation around delivery between business and technology—allowing innovated results to be delivered based on consistantly balancing value, cost, and risk. In traditional broadcasters, this type of business engagement is rare as projects are generally executed by collecting requirements upfront, where ambiguity at the time of planning and estimating is not part of the methodology or commitment strategy. This unfortunately leads to many projects stalling due to lack of information or worse, projects moving forward with very incorrect assumptions which are eventually disproven. In digital native organizations, product managers embedded into the technical delivery team help guide outputs in shorter releases of value, measure effectiveness, and adjust the needs for a next release.


If these digital native software companies are the new benchmark, how can traditional broadcasters match their pace given legacy architectures, investments, and skills?

What’s needed is an evolution in organization, practice, technology and culture. In short, a new technology operating model that enables new service rollout in weeks rather than months or years.

THE FUTURE FOR BROADCASTING: A NEXT GENERATION TECHNOLOGY OPERATING MODEL

FIGURE 4 | Broadcast Architecture Evolution

As in other industries, software-enabled business platforms are replacing purpose-built hardware in broadcasting (see figure 4 above). As they do, the need for software engineering disciplines begins to displace traditional engineering. As broadcasters make the shift, they can achieve and sustain high performance through the following approach:

1. Know where to start… and start fast

2. Enable multi-speed delivery in core applications

3. Align for long-term success

4. Foster new skills and culture

1. KNOW WHERE TO START… AND START FAST

Prioritize accelerated innovation and new practices where they differentiate the most: the digital systems of engagement.

Driving change of this scale can be a daunting task; knowing where to start is half the battle. It’s important to identify areas of the business where higher pace is necessary and other areas where a more moderated approach would best manage risks. A strong integration strategy is required to link the two approaches.

FROM LEGACY MEDIA COMPANY…

CONSUMPTION DEVICES NETWORK CORE MEDIA TECHNOLOGY INFORMATION TECHNOLOGY

...TO MODERNMEDIA COMPANY

TV Appliance(HARDWARE + SOFTWARE)

Newspaper Proprietary Network

Multiservice Network

+

Hardware

Database

Software

Software

CustomerAnalytics

Internal APIs

Third Party APIs

EnterpriseData

Third PartyData

PlatformsAny Connected Device

Software Software

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As digital video products become more sophisticated and consumers become more demanding, significant pressures are put on video product development.

FIGURE 5 | Accenture’s Digital Delivery Factory for Media Companies

An obvious place to start is with the digital systems, and digital video in particular. As digital video products become more sophisticated and consumers become more demanding, significant pressures are put on video product development. These pressures are exacerbated by time-to-market and budget constraints—meaning that development needs to become more efficient while the technology becomes more diverse and complex.

Traditional long-cycle development processes, which have been heavily water-fall—and specification-based—especially when leveraging legacy technology such as set-top boxes and content supply chains—are becoming less and less relevant to successfully launching such products. These products must be evolved continuously. The expectation is that every couple of weeks, more features and more fixes can be shipped to continue making the product fresh, relevant, and reliable.

To respond to these challenges, Accenture has developed an offering called “Digital Delivery Factory for Media Companies”. This is a collection of skilled product delivery teams, processes and methodolo-gies, and supporting tools that allow broadcast and media companies to efficiently build media-based products to respond to the demands of the market.

The offering allows a number of different internal and external implementation teams to build and operate, using next-generation technology delivery techniques and integrated solutions which can be shipped and iterated as product requirements are generated. Accenture has successfully launched this highly con-figurable model for a number of different clients—all of which have been under very tight pressure to get to market and require continued innovation post launch to accelerate the Build-Measure-Learn loop to meet evolving consumer demands.

The process of launching the offering not only provides short-term tangible benefit, but is in itself a Build-Measure-Learn exercise for the rest of the technology organization. Evolution must not be restricted to an organization’s digital systems. Innovation and agility have to be quickly and meaningfully applied to the core business capabilities supporting these channels in order to truly unlock the value of the content organization.

THE FACTORYContinuous Development and Integration

EXTERNAL DEPENDENCIES AND PROVIDERS(May include additional bespoke inputs as required, e.g. ISPs/infrastructure)

OPERATIONSPRODUCT & UX

UI/Front-end Teams

Arch Delivery Test

Middleware

Device/Firmware

Back-end Services

Infrastructure

User Stories

ReleaseMgmt

Ops/DevOps

APIs and Services

Operational Tools

Complex Tech Stories

Security

Data Management

Content Development Support Device Integration

Content Providers Device Manufacturers

DevOps/Continuous DeliveryLocal Industry

Experts forProduct Management

Embedded SystemsEngineering

Best-of-breedTechnology Partners

Nearshore Delivery Models

Automated Testing

Metadata and Content for Simulationand Prototypes

Data Managementand AdvancedAnalytics



TRADITIONAL BUSINESS EVOLVING BUSINESS

Scalability, efficiency, safety and accuracy—what a traditional engineering organization does best.

• GOAL: Reliability

• VALUE: Price for performance

• APPROACH: Waterfall, V-model

• GOVERNANCE: Plan-driven, approvals

• SOURCING: Enterprise suppliers, long-term deals

• CULTURE: Engineering-centric, removed from customer

• CYCLE TIME: Long (months)

Non-sequential, agility and speed, like a digital native.

• GOAL: Agility

• VALUE: Price for performance

• APPROACH: Agile, kanban

• GOVERNANCE: Empirical, continuous, process-based

• SOURCING: Small, new vendors, short-term deals

• CULTURE: Business-centric, close to customer

• CYCLE TIME: Short (days, weeks)

Support for core business activities of the organization, with opportunities for greater flexibility and responsiveness

Manage Risk Pursue Opportunity

DIGITAL BUSINESS

TECHNOLOGY OPERATING SPECTRUM

FIGURE 6 | Technology Operating Spectrum

2. ENABLE MULTI-SPEED DELIVERY IN CORE APPLICATIONS

Decoupling core systems to allow speed where it’s needed by adopting new practices: agile, continuous delivery and flexible architectures based on APIs, microservices, and virtualized cloud solutions.

Traditional broadcast and supporting business systems are complex and tightly coupled, with many interfaces and depen-dencies—a reflection of the organizations that created them. The technology complexities are compounded by a culture of perfection via extensive testing

and handoffs between the silo’ed organi-zations. The result is a long and expensive enterprise release process as dependencies across many delivery silos are managed.

The future technology operating model for broadcasters must enable “multi-speed delivery”, combining broadcast availability with broadband flexibility. Different parts of the technology portfolio will have different appetites for risk vs opportunity, and the operating model must be capable of responding to many types of demand simultaneously across this. See Figure 6.

From a technical perspective, changes are required across four key pillars to enable multi-speed delivery: Architecture, Cloud Infrastructure, Software Engineering Practices, and Technology Governance.

FIGURE 7 | Enabling multi-speed delivery in core applications

Enable a multi-speed application architecture: It’s not feasible to throw out an entire legacy system and start from scratch. But it is possible to decouple systems of record and systems of engagement via open service architec-tures. Abstraction to decouple systems—especially those that need to move at different speeds—is a requirement for multi-speed delivery. This initial step will help manage the ability to balance high-opportunity changes and high-risk changes in parallel.

Broadcasters can achieve this through extensive use of APIs and microservices to expose core system data to faster-moving digital channels and ecosystem partners. This requires an extremely strong integration strategy, which relies on “isolation and emulation” to allow parallel development while controlling the risk of incompatibility. This is especially effective

in solutions that rely on the transaction of metadata and media, as many of the resulting digital solutions rely heavily on the separation of media flow and control flow, with metadata being the only way to link them. By using simulated metadata strategies, components of a digital media solution can be built and certified in iso-lation, and when they are integrated into a wider solution, the chances of incom-patibility are heavily decreased. For exam-ple, think of a VOD catalog and all the different combinations there are that could trigger different content discovery, transaction, consumption, and reporting logic for an OTT solution . With a strong simulator for both media and metadata, one could certify a full consumer product without the underlining supply chain being built.

Legacy simplification also plays a part in enabling speed and reducing overall costs. Simpler architectures enable faster change, reduce pressure on resources with scarce skills and reduce costs.

Simplified and decoupled architectures are critical enablers of multi-speed delivery, and emphasize the importance of having a strong, centralized enterprise architecture organization (as noted in the next section).

ARCHITECTURECLOUD INFRASTRUCTURE

SOFTWARE ENGINEERING PRACTICES

TECHNOLOGY GOVERNANCE

FROM

TO

Monolithic and tightly coupled across appliances and applications.

Digital, core applications, and ecosystem partners loosely coupled via APIs and microservers.

FROM

TO

Waterfall delivery in large periodic releases; Environmental constraints hampering flexibility and responsiveness; Manual processes.

Multiple integrated fit-for-purpose methods; continuous delivery in digital and frequent delivery for core applications. Automation everywhere.

FROM

TO

Premise-based and functionally specific and unique solutions

Cloud-first approach with standard technology platforms to support rapid development, scalability, and lower cost.

FROM

TO

Stage-gate based capital planning and approvals aligned to waterfall deliveryand periodic releases.

Multiple governance including the addition of capacity and business outcome based models to support continuous delivery and innovation.


“Engineering teams should be able to concentrate a maximum of their time on quality and innovation. At Google that time is achieved, at least in part, by making the hard and the mundane simple and automatic.”PATRICK COPELAND | Engineering Director, Google


Software engineering practices: Agile and iterative methods can support changing user demands, while traditional waterfall methods are still relevant to core systems. In some media product develop-ment, such as platforms that support set-top boxes, the line blurs. In these cases, specification-based development is still required for core functionality, while product development needs to support greater flexibility in user experience and non-device based capabilities. Enabling multiple integrated delivery methods is the essence of multi-speed delivery.

Different methods require different levels of business participation. With Agile, interaction with the business via the product owner is more frequent. With Waterfall, it is less so, and care is needed to ensure that what is being delivered remains market relevant. The varying

models for engagement highlight the importance of the business engagement function (as noted in the next section).

Enabling continuous delivery via automation of the software factory is another key aspect of leading software engineering practices. Development and test automation via “DevOps” practices enables frequent deployment to produc-tion, where the real Build-Measure-Learn loop takes place. This solves the “time to market” vs “predictability and quality” conflict between engineering and IT organizations—as it allows both to be bal-anced using the same enabling capability. To give an indication of how important this is in the new media ecosystem, some digital natives invest up to 20-25 percent of their R&D budget in this capability.

Embrace the cloud: Standardized and automated platforms enable accelerated delivery—and cloud is a key component of that. Lead-times to install and configure infrastructure, operating systems and test environments are simply not considerations for developers within digital natives. Automation and virtualiza-tion are used to insulate and accelerate development. Traditional technology organizations spend more time testing, deploying and releasing software than designing and building it.10 Contrast that to the digital natives who use standardized platforms to keep developers focused on innovation and new features.

FIGURE 8 | Multi-Speed Delivery Framework

TECHNOLOGY NEEDS TO RUN DELIVERY AT MULTIPLE SPEEDS—from agile and continuous for the parts of the business at the “opportunity” end of the Technology Operating Spectrum to traditional waterfall approach for core legacy back end systems.

AGIL

E +

DEV

OPS

WAT

ERFA

LL

STRATEGIC ARCHITECTURE ROADMAPS

DIGITAL

CORE

SYSTEMSOF RECORD

RELEASE PROGRAM MANAGEMENT COORDINATION

Support digital iterations Support digital iterations

ER1602

RELEASE N RELEASE N+1

ER1603 ER1604

10 Adapted from “The State of the Art in Microservices” by Adrian Cockcroft


For future solutions, technology organizations should adopt a “cloud-first” mentality. Cloud platforms have evolved to provide better performance and resiliency than most traditional companies can afford to build on their own. The shift away from capital investments for infrastructure allows OpEx expenditures to be aligned specifically to evolving business needs—and the rapid “scale or fail” required with platform innovation.

The Star case noted on page 21 is a great example. Star acquired the rights to the Cricket World Cup championships and demand exploded. With a solution built on Amazon Web Services, it took just four people, working overnight, to double the system’s capacity. In a traditional model, that would have taken months of order-ing, installing, and testing equipment and software.

Technology governance: Achieving rapid agility also requires velocity in fund-ing models, business engagement and corporate governance models. Stage-gate based capital approval requests don’t work well for the accelerated Build-Measure-Learn loops required for innovation. Capacity needs to be reserved with appropriate measurements and success checkpoints in place in order to support velocity while properly measuring value and reacting to challenges, including market failure.

“What we’ve built is a PaaS over the top of the AWS infrastructure… leveraging as many Amazon features as seemed interesting and useful. Then we put a thin layer over that to isolate our developers from it.”ADRIAN COCKCROFT | Former Cloud Architect, Netflix

3. ALIGN FOR LONG-TERM SUCCESS

Traditional barriers between Engineering and IT must fall as broadcasters shift to an interactive, software-enabled future.

The solutions developed by a technology organization tend to reflect the organiza-tion that creates them. In broadcast com-panies, silo’ed technology organizations were ideal when media product could be easily separated from supporting business solutions due to a one-way distribution pipeline.

Digital software-enabled solutions require the dismantling of those walls to create an open ecosystem that allows viewers, con-tent, business capabilities, engagement partners and providers to move across a number of mediums with a feedback chan-nel incorporated into the product develop-ment process.

Successful broadcasters of the future will have a ubiquitous technology organization that is able to manage consistency across converging technology environments. While there will be changes unique to each company, there are three key common ele-ments of organizational alignment in this new model:

1 Holistic enterprise architecture: The technology shift from hardware and equipment to software platforms requires a holistic view of the business, informa-tion, process and technology to drive the evolution of the technology landscape and align the organization’s needs to this strategy.

2 Strong technology/business relation-ship: As the technology / business rela-tionship changes, all are well served by a strong business-unit advocate within technology. These people get the best from technology for the business and help to transform business practices. This requires a more collaborative approach to business problem solving and minimizes time-consuming traditional requirements collection.

3 Integrated technology delivery: A combined Engineering and IT organiza-tion is required to deliver and sustain solutions across engineering and IT. As software dominates new features, this organization will bring the best of engi-neering and IT practices.

Getting these three areas right will help keep the business and innovation agenda up front and maintain focus on the migration toward integrated software-enabled business platforms.

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Technology leadership teams must adapt the culture of the technology organization to attract and source the right talent and strategically upskill, augmenting the industry know-how in the current organization.

4. FOSTER NEW SKILLS AND CULTURE

The Build-Measure-Learn model needed to support accelerated innovation requires a different corporate culture and capability from broadcast’s heritage.

Accelerating delivery and innovation is fundamentally a cultural and skills problem—not a tooling problem.11 Enabling and incentivizing new behaviors and growing next-generation software skills are both critical.

Be ready to fail: Today, the engrained ethos of perfection results in repeated testing until a solution is flawless. This is the antithesis of the accelerated Build-Measure-Learn loop required for innovation. The “Opportunity” end of the Technology Operating Spectrum requires considerable experimentation to figure out what will or will not work. The digital era affords much more room to try new things as long as they lead to the goal of a better experience for the consumer. This is completely contrary to the worldview of traditional broadcasters where a second of outage could do irrevocable damage to their market standing. In the future operating model, incremental changes are rolled out to a subset of customers, limiting the

effect of a change that may impact the consumer experience. By taking this approach the business can quickly respond to consumer feedback, resulting in increased engagement and brand loyalty—essential currency in the disrupting media marketplace. Broadcast companies need to adopt a very different cultural mindset where experimentation and even failure is simply a springboard to success. That requires buy-in from executive leadership, giving employees the tools to experiment and bringing in new talent willing to take risks for higher rewards.

Develop new talent: The technology and delivery skills needed for today are different and will change in the future. Future solutions will deliver via an ecosystem of partners, with open collaboration instead of in-house, silo’ed solutions. Technologists of the future will understand the business processes and technology ecosystems. And they’ll know how to leverage them for competitive advantage.

Introducing talent from outside companies and industries can help to infuse the ‘why not?‘ ethos needed to adopt a continuous IT delivery capability that enables rapid innovation and a learning business opera-tion. However, competition is fierce for the technical skills that are now required for success. When a 2013 survey asked US-based executives at large companies

if a skills gap persists in their businesses, nearly half expressed concerns that they will not have the skills they need in the next two years—with the greatest demand being for IT skills (44 percent).12

The answer? Technology leadership teams must adapt the culture of the technology organization to attract and source the right talent and strategically upskill—aug-menting industry know-how in the cur-rent organization.

Traditional broadcasters need to think transformation rather than incremental fixes. They need to create a workforce plan that will match the digital demands of the business and technology, including the use of analytics, mobility, cloud and other emerging technologies—coupled with strong digital systems integration skills. It will be critical to develop new digital career paths and roles, such as service design strategists, product owners, data scientists or scrum masters who can serve as catalysts to convert traditional ‘analog‘ approaches to digital ones. Roles need to be created that are shared with the business and are sourced from the larger ecosystem. They’ll need to establish the incentives for employees, promote the value proposition and use the organi-zation’s brand and culture to offer key differentiators that influence and attract.

11 Adapted from “The State of the Art in Microservices” by Adrian Cockcroft12 Skills and Employment Trends Survey, Accenture 2013, http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-2013-Skills-And-Employment-Trends-Survey-Perspectives-On-Training.pdf>

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With a platform 100 percent in the cloud, the hotstar implementation was completed in three months, launching in January 2015. It took only six days to exceed one million app downloads, and 17 million in three months. No digital service anywhere in the world has seen such a ramp-up, including Twitter, Instagram and Spotify. Hotstar, in conjunction with starsports.com, created history by scoring 25 mil-lion views of the India vs Pakistan cricket match in the ICC World Cup 2015—only two months after launch. This is amongst the most ever digital views for a single game in a sporting event across the globe in one country.

Constantly evolving how it operates to match fast-changing consumer behavior, Star India was focused on providing consumers with seamless access to content from a single online destination. A successful outcome would help it to reinforce its status as India’s most compelling storyteller, as well as shape how content is consumed in a new world with new screens and new habits. Star India launched hotstar, a convergent web and mobile platform, to bring its powerful content portfolio to a single online destination. Based on Accenture Video Solution (AVS), hotstar offers one of the country’s most popular content catalogs to a population of more than 1.2 billion with general entertainment, movies and sports.

WHAT DOES SUCCESS LOOK LIKE?

India’s leading media company, Star, is at the epicenter of the convergence of the telecoms, electronics and media sectors. A subsidiary of the global major 21st Century Fox, Star is a market maker with breakthrough initiatives in content, distribution and monetization, reaching 720 million people in India each week with 42 channels in seven different languages.

Built on Akamai & Amazon Web Services, Star provided only VoD mezzanine files and live feeds. There was no need for a transcoding infrastructure farm, because that function was performed in the cloud, on a just-in-time basis.


1. Embed a Build-Measure-Learn loop into your nascent or evolving digital capabilities.

Innovation isn’t about being fast, it’s about learning fast. Efficiently responding to feedback is the key to continuously learning and adapting to digital consum-ers’ often unspoken and subtle needs. This agile learning loop increases customer engagement and new product success, allowing broadcasters to pilot and adapt new products and content experiences quickly for a multi-channel audience. Broadcast and media currently have a tremendous asset in great content and curation. By following the digital natives’ example on agile software-enabled platforms, broadcasters can iterate and innovate—optimizing how they create, promote and fulfil content to their audience.

2. Build a “digital mindset” in the traditional technology and business teams.

Don’t let the learning stop at the consumer engagement layer. Harnessed properly, the feedback loops enabled by digital channels can unlock new value to traditional business models around planning, scheduling, segmentation, and optimization. This requires merging the traditional engineering and content supply chain skills with next-generation software engineering and digital. This is fundamentally a cultural and skills challenge—more than a methods or tooling problem.

3. Attract and grow software architecture and engineering skills.

As software-based solutions continue to displace purpose-build appliances or legacy on-premise business applications in the broadcast and media value chain, traditional engineering must evolve. Next generation technology skills are not broadly available—and the digital natives currently have the upper hand in attracting top talent. Develop a workforce strategy to attract and grow the leader-ship and delivery skills needed for the ongoing evolution of your business.

4. Pilot then accelerate multi-speed technology delivery capabilities.

Increasingly, technology is your business. The digital natives treat the software development process as one of their key assets and have invested in automation and architectures for speed, quality, and cost. Follow the lead, investing in creating next-generation technology delivery capabilities in your organization. The defacto goal for all future solutions should be open API-enabled architectures, automation, data-driven capabilities, and cloud-based continuous delivery models to build toward the software-dominated future. Develop a roadmap for your organization for where speed is needed, find the burning platform project to rally both next generation and traditional engineering around for the new practices and process…and make it happen. As these practices become the new way of working, both broadcast reliability and broadband flexibility are achievable.

The B2C media industry is no longer one-directional, and by actively planning and adopting these changes, the broadcast and media C-suite can develop these capabilities to complement their content. In doing so, they place their organizations in a position to thrive in the era of Digital Darwinism.

Summary Broadcast and media are not immune to technology disruption. The advantage of great content alone is not sustainable. As recent research and industry experience have shown, software-enabled business platforms enable rapid innovation and the ability to optimize consumer engagement while producing and distributing content that is even more relevant to their demands. To take advantage of these capabilities, broadcasters must transform their technology operating model.


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Copyright © 2015 Accenture All rights reserved.

Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

Authors

Mark MillerManaging DirectorAccenture Communications, Media, and Technology [email protected]

Youssef TumaManaging DirectorAccenture Media & [email protected]

Peter McSharry Senior Manager Accenture Communications, Media, and Technology [email protected]

To learn more, please visit www.accenture.com/pulseofmedia

Join the conversation: #pulseofmedia

About Accenture

Accenture is a global management consulting, technology services and outsourcing company, with approximately 336,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$30.0 billion for the fiscal year ended Aug. 31, 2015. Its home page is www.accenture.com.