An IP-based broadcasting is finally on the horizon

I spoke with Takuya Watanabe of the Japan Commercial Broadcasters Association’s Digital Internet Research Society about American broadcasters.

American broadcasters are currently facing the three problems of maintaining advertisement revenue, monetizing digital distribution, and overseas developments. Japan is no different.

Internet Protocol (IP) was this year’s keyword for the National Association of Broadcasters. “IP-based broadcasting” is finally on the horizon.

To switch to IP-based broadcasting is done on many levels, including the broadcast system (production/distribution), digital distribution, marketing, business, and operating model. It is finally time for the broadcast system, the true crux, to change.

TV shows are traditionally transmitted using a video signal format known as Serial Digital Interface (SDI), but there will be a complete switch over to IP. This will make a system that integrates both broadcasting and distribution into one package. The movement is to have TV become cloud-based.

Over the past 20 years, the world of telecommunications has seen the total switch from phones to the internet, from switchboards to routers, and from circuit switching to packets. This change will be just like those of the past.

One particular example is US’ ABC making the switch to IP and cloud-based broadcasting. A great deal of capital investment will be required for the initial transition, but costs will later decrease dramatically. Some even theorize that the total costs involved will be halved. If ABC succeeds with the transition, then other broadcasters are expected to follow like an avalanche.

When a broadcast system becomes IP-based and is outsourced to the cloud, broadcasting, distribution, VOD, and social media interaction are integrated into a single package. This turns the traditional broadcasting station into a station for the production and editing of content. The question is whether or not broadcasts have the resolve and strategies to handle this change.

There is also the alternative strategy of operating the system without outsourcing, keeping the intangibles and tangibles in balance. However, this is more expensive than outsourcing to specialists and threatens to be a security risk.

Of course, this trend wave will also reach Japan. It is a tsunami compared to the telecommunications/broadcast fusion 20 years ago, the internet fusion of 10 years ago, and the advent of smart TVs 5 years ago. How will Japanese broadcasters face this wave?

There has actually been a great amount of research done by Japanese broadcasters on the theme, and manufacturers are taking a serious marketing stance. The matter comes up from time to time at the IPDC Forum, which I am a representative of.

For the telecommunications/broadcast fusion, the digital distribution of TV shows was a major theme. Though we take it for granted now, it was originally feared to destroy the traditional broadcaster business model, and even discussing it was almost considered taboo.

And now, the switch to IP-based broadcasting will bring another sweeping change to the system. At the Ministry of Internal Affairs and Communications’ Takenaka  committee 12 years ago, there was a strong opposition from the TV industry regarding the hot topic of an “All-IP Broadcasting Era.” Even though the industry was making strides in internet development, they foresaw the All-IP Broadcasting Era as a disastrous  future.

However, changes in system technology like these are unavoidable, and like the case of the internet was for telecommunications, the change will be swift. For the time being, we should keep a careful eye on the situation.