A Q&A with A+E: changing the model
Don Jarvis, Senior Vice President Global Engineering and Technology at A+E Networks shares his insights on the business case for adopting cloud-based media supply chains, fundamentally "changing the model", and what it takes to get there.
How has the content delivery requirements changed over the past few years?
The fulfillment demand for non-linear (VOD, AVOD, SVOD etc.) outlets continues to increase dramatically for A+E Networks. We’ve grown from delivering 1,500 assets a year to our linear playout of A&E, History, Lifetime, LMN, FYI and Viceland to now distributing 150,000 packages a year to over 200 end points. As you can imagine, this has put a lot of stress on our on-prem facilities that were originally designed for consistently low-volume, high-touch workflows. We had to change the model.
How was the media supply chain model presented to leadership in order to obtain all required approvals?
The on-prem media factory was past due for a tech refresh. We put a budget together to do a brick-and-mortar buildout with a 5-year depreciation plan that would have resulted in approximately the same throughput capacity our current plant has. We then did a second budget for a cloud-based virtualized media supply chain with costs based on estimated volumes 5 years out. The totals for each, which included both CapEx and OpEx, were very close. The discerning factor was that the on-prem model is in a fixed location with a fixed capacity that would always have times of being either underutilized or oversubscribed. The virtualized model allows us always to be right-sized. The “renting” of a geographically agnostic factory and tools, which have the ability to scale up and down, only paying for what you consume, proves out to be a better model. This is especially true in the dynamic, fluid climate our industry is in today.
By virtualizing the media supply chain are you trying to solve a technical problem or a business problem?
We are solving for an effectiveness problem. We had to find a solution that helps the same operational teams deliver ever-increasing volumes in shorter time frames to more end points with minimal “retooling” time whenever a new distribution package is needed.
Are the challenges technical, business, or cultural?
Installing a new technology that requires different operational practices into a facility refresh is going to result in challenges along the way.
Fundamentally, the engineering team need to evolve from the SDI/IP world to a software development one. We are no longer simply configuring purchased components into a comprehensive system. We are now actually creating those components in software. This requires a whole new set of disciplines that were foreign to our engineering team. Finding talent for this is challenging. We have a great nucleus under [A+E VP of Media Infrastructure] David Klee’s direction, but we are looking to expand this team year-over-year.
The main business challenge is one of growth. New distribution deals are being added constantly, which is good for the A+E bottom line. However, in areas where fully virtualized media supply chain is not yet implemented, we’re adding onto legacy systems and creating workarounds for fulfillment. This results in engineering having to support and update the on-prem environment while simultaneously designing and building the new virtualized one.
Culturally, most of the teams are eager for the change. They understand the vision because their requirements drove the design. But with any change comes uncertainty. What will my role be? What do I need to learn? You need to be transparent that roles will change – they have to in order to be more effective.
What does the media supply chain model mean to A+E? How does it impact your business?