23 October 2008

Ascent has 56 facilities with 3,200 employees world-wide

CEO Jose Royo explains how Ascent Media is leading the media content industry’s rapid transition to a digital world by providing an end to end supply chain.

Consumers are beginning to take for granted the ability to view whatever they want, whenever the want and using whichever device they want. But how is this made possible? The media content supply chain is rapidly changing as content owners adapt to a world in which consumers interact with rich digital content on multiple devices. In this new era of consumer choice and content availability on demand, content producers have increased opportunities to sell content to a larger audience, but they also see threats to the perceived value of their content.

In 2000 and 2001 the forward-thinking Liberty Media Corporation purchased a range of post-production, media services and media distribution companies with the vision that content producers would need all these skills in one place as the industry embraced digital media. “How customers buy services in the supply chain has changed, and our original vision for the company has now come to fruition,” says Ascent Media CEO Jose Royo.

Ascent Media now has 56 facilities with 3,200 employees around the world delivering the vision on a grand scale. In the past, studios bought post-production services and distribution services separately. Now many customers are making purchasing decisions across the entire supply chain. And they need vendors who are able to support the supply chain end-to-end.

“We are able to provide those services globally and with real scale,” says Royo. “We are ingesting 50 terabytes a week and distributing 15,000 files a month to anything from Zune, Xbox, Playstation, through iTunes, Amazon, Netflix, Love- Film, retailers and so on.”

Ascent Media’s services are the link between producer and broadcaster. Many of the post-production and post-theatrical tasks used to be performed separately, but now the short window available for delivery to the audience demands a one-stop shop. Ascent Media transcodes content, adds metadata, provides digital rights management (DRM) and delivers it on the right media to wherever it is needed. It does this with thousands of titles and on a global scale.

Each title has a specific set of metadata to identify it and Microsoft Dynamics AX keeps track of that information and all the work processes to transform that title to the delivery point. Customers can view what is happening to their titles through customer portal technology based on Microsoft Office SharePoint. “In this way we can create a closed loop,” says Royo, “and gather information such as was the content successfully delivered, how long was it watched for, and what advertising was delivered with the content.”

What has changed dramatically is that the business is moving more towards a long-term relationship with services across what used to be distinct business lines

Jose Royo, Ascent Media CEO Royo says that Ascent Media has close to 50 per cent market share of the post-production delivery of advertising in the US for major networks and is looking at how it can help its customers successfully exploit the advertisement revenue model. He sees the advances in advertising technology as a huge opportunity and summarizes the challenge: “How do we aggregate a large number of 30 second spots that are distributed efficiently to small operators and take some of the technology that Microsoft has invested in and make sure the advertisements play and can be analyzed to give the advertisers the campaign management they require?”

Ascent Media already works with cable companies such as Charter Communications to supply content metadata and deliver advertisements to their head ends. The cable companies then apply rules to automatically insert advertising into the broadcast content. Ascent Media has built dashboards to show delivery of content, consumption of content and advertising information.

Technology is key to creating the closed loop and Ascent Media has entered into a strategic alliance with Microsoft that will result in new solutions for the media industry. Royo says: “The mission and the objective of deploying these new technologies is to bind together every aspect of our business with the right level of visibility and integration across every single process. Regardless of where a piece of content is in its lifecycle, we are able to manage it and have the right level of visibility across it. This integrated solution will touch every single one of our facilities, every line of business, every operational resource.” Royo knows that by having access to detailed operating metrics from all divisions and geographies, he will gain enhanced visibility into the short and long term profitability of the overall business.

Ascent Media is working with Avanade along with Microsoft Consulting Services for the integration of this project, ensuring that the user interfaces and back-end processes align to meet varying departmental and business needs In addition to deploying this supply chain solution internally, Ascent is also working with Microsoft to develop media industry solutions that it can resell, such as a solution for the management of visual effects assets and a way for Microsoft Silverlight to work with different time-coded files.

“What has changed dramatically is that the business is moving more towards a long-term relationship with services across what used to be distinct business lines,” says Royo. In addition, they also contain massive volume commitments that span the globe. Ascent Media used to do deals in separate territories such as the US, Spain and France. Now it is entering global sourcing deals with many customers. “In some ways it’s simpler because we now have more visibility into global services and the volume of work we have to do,” says Royo. “In other respects it’s much more complex because we have to support time windows that are a lot shorter than they used to be. In the old days you could take weeks, if not months, to work on a large volume order for distribution to an international territory. Now we have to do it in days and in some instances, hours.”

Customers also want real time visibility into the processes as part of the content lifecycle. “The customer wants to see where you are with the 20 titles going through the system,” explains Royo. “They may wish to prioritize five of the titles, or reschedule five, or change the format. It’s much more dynamic and we need to be a lot more flexible with our support and provide the scale and global services that our customers want.”

“During the transition to digital the industry has been more interested in the front end of the supply chain, the creation and repurposing of content,” explains Royo. “It has paid less attention to the back office operations and has struggled with legacy solutions.” In this new business landscape, front-end activity has to be linked to the back-end in order to create the necessary efficiency. Ascent Media has responded to its customers’ demands for more complex orders and shorter lead times by implementing a supply chain solution that can fulfill new opportunities.

Royo describes the previous, unacceptable situation in which Ascent could fulfill an order for 1,400 titles to go to a broadcast partner, say an Internet-based DVD rental library, in 48 hours but then the paperwork took two weeks to complete. Ascent’s newly deployed solution streamlines the ordering process and cuts out what was a paper-based system that relied on emailed PDFs and faxes.

Cutting out delays and cost is a requirement as the industry moves towards an all-digital delivery environment, and organizations in media and entertainment face increasing pressures to reduce costs in each step of the process. Producers and content owners are seeking ways to monetize their assets, to find new markets as established TV markets become saturated, and to do all this without repeating the mistakes of the music industry, whose main product has been devalued by illegal downloading.

As the global business scales up, Royo says Ascent Media is focused on driving out costs and this involves getting massive libraries as close to the distribution points as they need to be. At the moment, Ascent Media does this itself, with digital media distribution centers all over the world. Royo is very eager to see where Microsoft is going with its cloud computing strategy, which may introduce new efficiencies. “We’ve talked about the business becoming global for a long time but it really means something now,” asserts Royo. “The US and EMEA are relatively saturated markets but there’s an explosion of linear channels being launched all over the world. There is a myriad of new platforms and distribution channels. How do we support emerging markets and help our customers have a presence and commercial opportunities for their content?”

In order to help owners to license content, particularly when they go deeper into the library, Ascent Media is building a global media exchange, using Microsoft technology. “It’s an eBay for professional content to give owners the opportunity to post their content and make it available for licensing on a global basis—next-generation syndication,” explains Royo. “There’s a huge hunger for content and there’s a lot that hasn’t been available because of the cost. In our business it’s not the long tail but the ‘chubby tail’. We want to create an efficient marketplace to make content available on a global basis. A startup channel for example will be able to choose from category libraries with thousands of titles to put together programming in the format it needs.”

Royo adds that Ascent Media is also learning from its customers the necessity to be flexible around different business models: “Services used to be priced and paid for. Now we are being asked to figure out if we’d like to invest in the digitization of libraries, the distribution of assets or the various consumption models that are out there. We need to be more flexible around creative financing and how we can partner with customers to help them execute their vision and commercial opportunities.”

The vision that formed Ascent Media is being extended as the company develops new technology not only for its own use, but also for the use of studios and other content producers. As Royo puts it: “For us, it’s executing that vision, saying to the industry that we can do this faster and better on a much bigger scale to facilitate the emergence of new business models, whether it’s micropayments or advertisement-supported models, across any platform or geography.”

This article first appeared in the September 2008 edition of Microsoft Connections in Communications magazine.

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