Paragon Bank: When Is Best To Invest?

Samantha Arlow, Divisional Director, Paragon Bank Technology Finance, gives her review of NAB 2016...

NAB 2016, and it's clear that the technology cycle is turning ever faster. HD is becoming UHD, Tapeless workflows have progressed to transferring files over the internet; storage is often 'in the cloud', cameras can fly, sets can be virtual, and remote production is a reality.

Now even virtual is a reality! (with a whole VR Zone at the show dedicated to demonstrating how immersive VR content can be, not just in gaming, but in documentary and drama storytelling too.) The speed at which technology changes, and is being adopted, is becoming ever faster. It feels like exciting times.

So, as we hit the show floor, HDR, VR and IP are the acronyms of change amid further rapid advances in camera resolutions, cloud based applications, Media Asset Management and screen technology. Canon dazzled show goers with working £8k cameras and displays meaning production models can't be very far off. The speed of technological development never ceases to amaze us and NAB is the perfect showcase, but as we walk the halls we inevitably wonder: what will these rapid changes mean for early adopters and the industry in general?

As we immerse ourselves in the moving and shaking of the show, networking Las Vegas style, our wide and varied conversations confirmed two things: firstly, there were a huge number of projects under discussion (as the moneymen this means we had perhaps the most exciting tradeshow ever!); but secondly, and more importantly, those with a need to invest in kit now are finding themselves in a quandary – torn between building for a contract whilst knowing that the kit available today will be unrecognizable in just a few years' time (or sooner!), drastically limiting their ability to make a commercial return on their investment.

Let's take IP live production as a case in point. We are in the midst of a challenging time. Today, off the shelf IP hardware is still more expensive and does not quite fit the needs of the dynamic and mission-critical reliance that its baseband equivalent provides, although new products are constantly hitting the market. Sony was showing a slick 1RU IP video switcher and router that can do the job of nearly 2 racks worth of baseband kit, SAM had a new record/replay server that can edit to social media as live, and the show presented a plethora of glue recreating functions in IP that would formerly have been handled in baseband.

Yet with no formal standardisation and limited collaboration between manufacturers it is difficult to build a fully end to end live production solution, and almost impossible to build one that is future-proof. A hybrid truck with a baseband backbone seems to be the immediate answer, but how do you make this work from a financial viewpoint when a truck should be revenue generating for at least 15 years; nevertheless it appears to be generally accepted that OB trucks will be fully IP (and correspondingly smaller) within the next 5 years.

Some manufacturers are actively trying to make adoption of their new technology as seamless as possible. In the world of post-production Avid and its new Nexis storage is a great example. Nexis has been billed as the world’s first software-defined storage platform, allowing the user to mix and match engines to form pools of storage to streamline, expand, and accelerate workflows. It is all about intelligent workflow and connectivity, negating the need to manually copy media between separate storage silos as it collaboratively connects people to an integrated shared storage platform. Fully scalable it can grow with your business. However, if you already own an Avid ISIS system, Avid has ensured you can add NEXIS storage right alongside your existing ISIS and seamlessly access both systems from the updated NEXIS client.

Unfortunately, however, in many cases technology has just moved on too far or too fast for anything other than a complete infrastructure or equipment overhaul.

So, in a departure from our usual tradeshow round up of what we saw as we walked the halls; we thought we'd try to address the question everyone was asking us: "When is it best to invest?"

Dare we say now??

Obviously we don't mean right now, this minute. There's a good argument for holding off implementing something that requires 25 steps now when, in 2 years' time, you will probably be able to do it in 10 – that is, if you have the time to wait. What we mean by 'now' is when you have a particular client or contract that makes the investment commercially viable, the kit is sufficiently available for you to provide your client the solution they are looking for and you have accepted, and factored in, the commercial imperative that you won't have 15 years to see a return on your investment.

At this point the time is right to adopt. The kit will generate revenue now and for some time to come, your client will be happy, likely leading to further business and you shouldn't need 15 years to recoup your investment if you are creative in how you fund the kit in the first place.
And that's where we come in.

Early adopters can often negotiate greater discounts as the manufacturer is keen to get new products in use in the marketplace. In addition using a finance company is akin to paying cash and also encourages further discounts as 30day+ terms bear a cost.

But you don't have to buy the kit outright. Have you thought of leasing it? Much like a car you can then return it after a primary term and get the latest/greatest/newest version.

Alternatively, HP finance can be used to match the cost to the cashflow of the contract/project/useful life. If you suspect it might be all change in 5 years' time, finance those assets over 5 years. The monthly cost can be lower than the monthly income, ensuring profitability from day one and, once the term has ended, you can have the flexibility to choose to continue to sweat the assets, trade them in for something newer, or undertake a partial upgrade in order to keep them current.

In an exciting and ever changing industry it's hard to pinpoint when will be the 'right time' to invest, so let's see how we can make it work right now.

www.pbtf.co.uk

This article is also available to read at BFV online here.

(JP/LM)