Apr 19, 2004  •  Post A Comment

When technologist Gavin Schutz attended his first NAB convention a little more than two decades ago, the big controversy was over which videotape format would overtake film as the medium of choice for most TV stations, television producers and post-production facilities. “You’d go there and buy tape machines and then bring them back and put the tape machines in,” Mr. Schutz recalled last week. “Now the vendors are asking more questions about how our goods-and-services offerings are evolving. What do the clients need? What are our needs? It’s more of a collaborative environment now rather than just a simple one-way trade show.”
For the thousands who will be in Las Vegas this year, the NAB exhibition hall has become a much more complex challenge. The rapid advances in the technology of television, as well as changes in the content and delivery of programming, have raised the cost of doing business and blurred the lines between buyers and sellers. One of this year’s big challenges is the rapid elimination of all tape, even digital, as a medium for storing information. It is being replaced by file servers offering greater flexibility and much more memory.
Consider Ascent Media, where Mr. Schutz is now executive VP and chief technology officer, based in Los Angeles, in addition to his role as president of the Society of Motion Picture and Television Engineers.
Ascent is a collection of high-end post-production and professional service companies that since the end of last year has been a wholly owned subsidiary of Liberty Media. In 2002, when it was still a public company, it had sales of $593.3 million and 3,825 employees. It has a shelf full of Oscars, Emmys and other awards for its work on top movies and TV shows.
It is the successor to a string of acquired operations including, just in Mr. Schutz’s case, Image Transform, Compact Video, Four Media and Liberty Livewire. It also includes highly regarded post-production companies such as Todd-AO, Level 3 Post, Soundelux and Group W Network Services. In past years, Mr. Schutz and others attended NAB primarily as buyers. This year they will be exhibitors and sellers as well as buyers, according to President and CEO Kenneth Williams: “This show has changed dramatically and radically. It’s gone from being very much of a box solution, hardware-based show to an extremely wide-ranging show dealing in rich-content creation and delivery.”
They will be there offering broadcast integration services (such as designing and building TV station facilities) and in a newer role as a vendor of services related to the new file-sharing environment.
“It used to be that the delineation between the buyers and sellers was clear,” said Mr. Williams, who previously spent 18 years in studio operations at Columbia Pictures and Sony Pictures Entertainment. “Today it’s not just about buying product. It is shopping for partnerships and alliances as well. There are very few companies who look at the entire digital media space and believe they have all the answers, all the solutions, for all of their customers.”
“As you walk up and down the aisles you’ve got lots of vendors with lots of solutions,” Mr. Schutz added. “Some of those solutions don’t have problems yet and some of them, while interesting, are not economically or technologically viable. What we do with our customers today is more of a partnership. We collaborate to put the pieces together and make goods and services out of them in a way that optimizes use for our clients as well as being economically viable for us.”
It isn’t just a different way of doing business. “If you compare this year’s exhibitor list to 10 years ago I would bet three quarters of the exhibitors weren’t even at that show,” said Mr. Williams. “Probably half of those companies did not even exist in the form they take today. The show has morphed radically over the years.”
Today Microsoft and IBM, offering software and file-based systems, are as important as Avid and other manufacturers of production hardware. And the exhibits are not just for sales. Most of the major vendors also set aside “partner” areas where they meet with business allies.
When Mr. Schutz first attended NAB, companies had to choose a manufacturer and buy into a format standard, such as Sony’s Betamax. Today there is software that allows one machine to talk to another, and the key is to be part of an open architecture whith lots of options. “Part and parcel of the partnership strategy is that the industry is insisting on open standards as opposed to allowing themselves to be hooked by a proprietary technology that then commits them to a certain sole source provider for the evolution of that technology,” Mr. Williams said. “In an open standard environment you really have to go out and recruit the industry to adopt your standard. You have to make it available to them in some fashion.”
Another factor has been the change-over to high definition. While it may be lagging as a consumer product, the post-production industry has gone through a hugely expensive change in the past two years as it adopted HD. “A couple of years ago you had a handful of [long-form] shows produced in high definition,” Mr. Williams said. “Two years later, I would say 80 percent or more were produced or post-produced in high definition.”
This year’s added wrinkle involves replacing film as the medium to first capture the show. Even those who have stuck by film through all the changes are now moving a lot of TV production to high definition, not only to save money, but also because it offers a lot of flexibility in terms of special effects and other creative tools.
Of course the change is also driven by the coming of digital TV and high-definition TV. Programs shot in hi-def can always be transferred back to standard video, but not vice versa.
For a company like Ascent, the decisions made at NAB can make or cost millions. “You really need to make the right choices in this environment,” Mr. Williams said. “You are looking for interoperability, cost efficiency and longevity.”
Longevity, of course, is no longer as long as it once was. New technology comes so fast that there isn’t time to amortize the cost over a period of years. “We have shortened our useful-life assumptions on equipment and software because with only a few exceptions … you don’t see a 10-year life anymore. You don’t see an eight-year life. You are really dealing in a three- to five-year world on a lot of this stuff. The stakes are much higher.”