Apple Pitches Revamped Apple TV as One-Stop Content Aggregator

Streaming Media

Apple was the first to crack digital music. Can it repeat its success with video? In what is billed as Cupertino's biggest strategy change since the iPhone in 2007, Apple has announced its long anticipated move into streaming video subscription. It also launched a bundled news and mobile games service.

https://www.streamingmedia.com/Articles/News/Online-Video-News/Apple-Pitches-Revamped-Apple-TV-as-One-Stop-Content-Aggregator-130791.aspx

"This represents a landmark moment for Apple with a major event solely focused on services," says Paolo Pescatore, PP Foresight, Tech, Media & Telco Analyst. "It underlines a growing and strong focus on services as a future source of revenue growth. In essence Apple is seeking to become a Netflix of everything in services: music, news and magazines, video, and games."

Its video approach is two-pronged. Populated with original content, new subscription service AppleTV+ will be available inside a revamped Apple TV app that is already pre-installed on Apple devices. AppleTV+ is due in the autumn and will feature new shows from top directors and actors including Oprah Winfrey, Steven Spielberg, Jennifer Aniston, Octavia Spencer, J.J. Abrams, and others.

The revamped Apple TV app's Apple TV Channels feature will now allow you to subscribe to any channel individually, instead of via a cable service. Significantly, partners include Hulu and Amazon Prime as well as Showtime, Epix, HBO, and BritBox.

"The Apple TV app and Apple TV+ will effectively become the largest single SVOD catalogue available in the U.S.; acting as content aggregator for selected cable and SVOD platforms alongside Apple's iTunes," says Richard Cooper, Research Director, Ampere Analysis. "The combination of Amazon Prime and Hulu's subscriber base alone gives the service the potential to become largest single VOD platform in the U.S."

Apple TV will display premium movie and TV titles from all the services it encompasses alongside each other, along with AppleTV+ original content, making Apple TV+ far greater than the sum of its parts.

"The stronger revamped video service somewhat mirrors the strategy of rivals," says Pescatore. "These latest moves take Apple TV closer to a one-stop-shop destination for consumers with live TV, on-demand, and Apple's own original shows in one place."

The new look Apple TV will be available from May via a software update across iOS and MacOS devices, in addition to distribution on smart TVs from Samsung, Sony, LG, and Vizio, as well as Amazon FireTV and Roku.

On the plus side, Apple will look to take advantage of a massive 1.4 billion install base of its devices and can plug the revamped app into this ready market.

As Oprah Winfrey said at the event, "The Apple platform allows me to do what I do in a whole new way—because they're in a billion pockets, y'all. A billion pockets—that represents a genuine opportunity to make a genuine impact."

On the downside, of course, Apple has given rivals like Netflix—which is not part of the service, along with Disney—a huge head start. It launches into a market in which content production and acquisition costs are already stratospheric. Netflix, Amazon, Hulu, Disney,, and AT&T (WarnerMedia) are investing a combined $20 billion this year alone on content, while Apple's spend is reckoned to be about $1 billion.

While Apple sits atop a $245 billion cash reserve, analysts believe it will have to dig deeper to fund originals or even acquire a major video content company.

"Apple will spend a metric ton of cash on this endeavor, and unless they can turn Apple TV+ into a hit-making machine, will have to buy a library, an MSO, a wireless carrier, or successful SVOD business to win here," said Ian Greenblatt, head of TMT at marketing services house J.D. Power.

Fragmentation or Consolidation?

Apple's pitch to consumers for AppleTV+ was premium content and innovative first-class storytelling endorsed by the likes of Abrams and Spielberg.

Analysts seem split on whether this will impact Netflix. Pescatore thinks more content and media owners will pull programming off Netflix and that "Apple represents a key partner for them in reaching new audiences at scale across numerous devices."

On the other hand, while the service wants to be a one-stop SVOD shop, it's likely that the service will become one of many SVOD services from which consumers will pick and choose.

The propensity for this is quite high, particularly in the U.S., such that Apple's service won't impact the growth of Netflix and Amazon Prime Video. According to Futuresource Consulting, in the U.S., there are nearly 80 million households with SVOD services, and on average each of these households takes two services.

The analyst predicts a trend towards consumers taking three SVOD services in future, particularly in the U.S. and that the figure will be "marginally lower" in Europe.

Ampere's analysis has the average U.S. SVOD household paying for 2.6 subscription services. "The creation of a single point of access for such catalogues once again offers a compelling reason for US consumers buy into Apple's service ecosystem," Cooper suggests. (nScreenMedia puts the number of services per household even higher, at 3.4.)

Futuresource also predicted users will take out trial memberships and special offers, "dipping in for short periods and then cancelling subscriptions" as choice in the market continues to grow.

The rollout paves the way for the introduction of new business models: "In the future we might even see users pay for a service bundle and receive a new iPhone every year," suggested Pescatore.

No pricing was shared for the new streaming service. "Apple has the bankroll to undercut all other market participants with somewhat predatory pricing in order to build an audience and constrain competitor's cash flow," added Greenblatt.

One reason Apple is making this move is because the smartphone and overall devices market is stagnating. Lower than expected sales of the iPhone in the last quarter were blamed on the economic slowdown in China, but the issue is more chronic. People aren't replacing their devices as fast as they used to (in part because of the price levels for models like iPhone XS Max at $1,250). Reliance on iPhone sales is not considered a sound strategy, hence the need to ramp-up its subscription services business.

Apple News

Also announced is a subscription news service combining stories from newspapers, websites, and magazines into a new tab in the existing Apple News app.

Participants include The Wall Street Journal with media organizations expected to hand over a 50% cut of the revenue to Apple.

Apple Arcade

As prelude to launching Apple Arcade, a games subscription service for mobile desktop and Apple TV, Cook said 1 billion games had been downloaded from Apple's app store making games its most popular app category and iOS the most popular gaming platform.

Apple Arcade will feature 100 exclusive new games on launch and is accessed via a new tab in the app store. This service won't take on new cloud-based streaming offerings like Google Stadia. Instead, it will focus on iPhones and iPads and bundle together paid games from different developers that consumers can access for a monthly fee. No pricing was released.

Google Stadia: Why 5G, cloud computing and the edge could be the future of media

IBC

Far more than a game streaming service, Google Stadia represents a transformative shift in digital communication.

https://www.ibc.org/tech-advances/google-stadia-not-just-for-gamers/3682.article

Google’s announcement of a cloud gaming service does far more than shake-up the video games industry. It’s part of a global shift in computing technology, in which in Google’s own terms, the data centre becomes the platform.

“This is a huge evolution for digital services, cloud computing and for digital communication,” said Ed Barton, chief analyst for entertainment at Ovum.

“The idea of the data centre becoming the platform shifts the compute demands away from personal devices to the network and the cloud meaning that developers are no longer bound by the limits of silicon at the end user. Instead, the amount of resource you can draw on is of Google scale. That, potentially, is extraordinarily powerful.”

Edge computing relocates computer processing from hardware devices in the home or mobile devices into data centres hosting massive compute firepower with data relayed over fibre networks or to one of the billions of new 5G cellular sites being installed worldwide (or combination of both) back to the user’s screen in next to no time.

Edge computing could reduce the workload and battery drain on mobile devices while providing a superior end user experience.

For applications like games but also future media experiences in virtual reality and augmented reality that require astronomical levels of computing power, edge computing moves the heavy lifting to the cloud. The geographic proximity and low-latency network access to a 5G connection mean a souped-up mobile experience.

Intel, Verizon, Fox, Facebook, AT&T all have innovation labs intent on exploiting the edge.

Paolo Pescatore, media and telco analyst, PP Foresight explained that “more devices connected to the network allows users to access more bandwidth hungry applications and will lead to a proliferation of data traffic”.

He added: “The need for more computing power closer to the edge is paramount. Networks will become more efficient leading to the emergence of new business models.”

Google’s hard-hitting announcement places Stadia as a direct competitor to rivals Microsoft, Sony and Steam. When it launches later this year, in North America, the UK and most of Europe, subscribers can stream blockbuster games to any smartphone, tablet, laptop or TV running Alphabet’s Chrome web browser.

It would be possible for a user to start playing on their TV and resume playing on their phone when they leave the house. There’s no need for any console or set-top-box style hardware to buy or upgrade, just a familiar joystick controller which links to the device by WiFi.

On launch, it will support the streaming of games in high dynamic range at 60 frames per second and in 4K resolution with 8K and frame rates of 120 anticipated.

It is being primed for multi-player video gaming, a trend which has recently gained mass popularity with Fortnite in which players using Xbox One and PlayStation 4 consoles can compete together.

Google will look to capitalise on the 4 billion smartphones in the market worldwide, a significant increase on the number of active home gaming consoles, expected to reach 170m in 2019, according to Futuresource.

One of Stadia’s features is the ability for players to record sequences of gameplay which they can then share as a link over YouTube for other players anywhere to join.

Crucially, all this will have minimal lag in processing the interactions of gamers round-tripping to the cloud and back over the internet.

That’s because Stadia uses Google’s data centres housed in more than 200 countries and territories, to power the service and rely on the 7,500 edge node locations of Google’s Edge Network.

Its data centres will make use of GPUs built by AMD that are claimed more powerful than those in Sony PlayStation 4 and Microsoft’s Xbox One X consoles. AMD’s custom chips can ship 10.7 teraflops of power compared to the 6 teraflops delivered by an Xbox One. Each Stadia computing instance is powered by a 2.7GHz x86 processor with 16GB of RAM, according to the company.

Combined with custom CPUs which, Google says, are “elastic” in that the cloud-hosted hardware can be multiplied to create more visually ambitious (data-intensive) games.

While Stadia will work over 4G mobile networks, the service is primed for the launch of 5G for which between 1 Gbps and 5 Gbps speeds are promised even in 5G’s early phases.

“The ability for Stadia to compete against console or PC gaming processing power is reliant on the user having access to a strong internet connection, otherwise gamers may choose to stick with their existing console or PC set up,” says Futuresource analyst, Morris Garrard.

“With the imminent adoption of 5G and Wi-Fi 6, some latency issues will be solved, however the roll out of these next generation connectivity technologies will be slow. China has committed to the rollout of highspeed 5G networks, and as the largest mobile gaming network worldwide, there is certainly a lot of opportunity for the uptake of Stadia.”

The latest flagship smartphones set for release this year from Sony, Samsung, LG and Huawei are 5G-enabled. These devices also come with multiple cameras and larger (flexible) screens. Sony’s Xperia 1 has a 4K cinemascope-style display. All of which points to video as the driver for consumer use.

Cisco predicts that by 2021, more traffic will created in one year than in every year since the inception of the internet combined. The vast bulk of that data will be video.

“The video space is ripe for innovation with the transition to 5G,” says Barton. “Rather than supplementing viewing experiences native to other screens, mobile is set to come into its own as a primary video entertainment distribution channel.”

Over 5G, an entire box set could be downloaded in UHD quality within seconds. Cristiano Amon, president at chipmaker Qualcomm says that 95% of the time 4K video will be streamed at full bitrate over 5G.

The Tokyo 2020 Olympics will be a showcase for 5G applications including Virtual Reality in 8K resolution (probably 4K per eye) in a demonstration organised by Japan’s NTT Docomo. RYOT Lab, Verizon’s innovation hub, is experimenting with holographic presence over 5G.

Stadia is also well placed to push 8K gaming content, Futuresource feels, despite the current installed base of capable screens being a major sticking point for its usage.

The name Stadia, according to Google, is meant to reflect that it will be a collection of entertainment, of which the viewer can choose to sit back and watch, or take an active part in.

Many observers believe gaming will be the killer app to entice consumers to subscribe to 5G services. Niantic, makers of mobile AR game phenomenon Pokemon Go, is shortly releasing a new multi-player realtime AR game Harry Potter: Wizards Unite to maximise the low latency and edge computing aspects of 5G.

“We’re at the beginning of a whole new era of digital interactive experiences for information and entertainment,” founder & chief executive John Hanke said at MWC2019. “A paradigm change like this happens once every couple of decades.”

Hanke began Niantic as a start-up within Google that helped build the apps that became Google Maps and Google Earth. The developer has now built a games-engine that maps the physical world around users of its games via their mobile phone cameras. It is doing this with a machine learning algorithm able to calculate the pixel depth of people and objects in real-time.

“That means we can photograph and analyse a user’s immediate environment and their positional data to create an AR map in the cloud and serve it back to share with other users,” explained Hanke.

It means that virtual characters or objects and all interactions with them will be visible to all game-players at the same time.

“Edge computing allows us to perform compute intensive work such as arbitrating the real-time interactions of a thousand individuals playing in a small geographic area.”

The other Achilles’ heel of AR is the latency of data being sent over the network in response to user actions. “Even good latency times today are 100 milliseconds. With 5G we can get that to a near instantaneous 10ms,” Hanke said.

New applications like this will still put a huge strain on congested networks. Analyst Pescatore says that telcos need to deploy ultra-fast broadband connectivity far more quickly.

“5G combined with the cloud powered by artificial intelligence and computing distributed from the cloud to the edge will enable the vision of services like Google Stadia and other mixed reality content to come to life.”

Digital players like YouTube, Tencent and Facebook benefitted hugely from the transition to 4G as they and not the telcos capitalised on the rich video services that faster broadband enabled. The dilemma for telcos this time around is to avoid becoming a dumb pipe.

“5G and edge computing will further empower the already awesomely powerful digital networks,” warns Barton. “There is no simple answer for telcos who must invest heavily but somehow generate revenues from next-gen services like Stadia.”

Futuresource expects mixed or extended reality to be on Google Stadia’s roadmap. “AR and VR are certainly technologies Google continues to back [and] thanks to the popularity of the Android operating system, it has one of the largest AR ecosystems, through ARCore,” says Garrard.

“As a content platform Stadia, may negate some of the entry costs for consumers to access VR content. This, however, will require further investment and high bandwidth internet connections.”

Brexit: A Disaster in Waiting or Y2K All Over?

StreamingMedia

The British streaming media community will be largely unaffected by the UK's (eventual) departure from the EU but the damage may already be done, and the effect on the associated creative industries could be significant.
http://www.streamingmediaglobal.com/Articles/News/Featured-News/Brexit-A-Disaster-in-Waiting-or-Y2K-All-Over-130595.aspx

As the UK's parliament dallies daily over whether or how to sever political and trade ties with the European Union, the uncertainty has put doing business with UK-based companies at some risk. There's evidence too that investment by companies, foreign or British, has been delayed. However it eventually falls, the impact of Brexit will be felt in terms of tariffs, visas, and potentially on the cultural and earnings power of the UK's creative industries. 

D-day for exit long been considered March 29, but even that is up for grabs with a short or more lengthy delay increasingly likely. In the meantime, UK-based streaming media businesses, have had time to take stock.

Tariffs: Impact Minimal

Deal or no deal, import and export duties are likely to change, but an industry committed to software means software producers are minimally affected by a no-deal scenario. 

"Software pretty much sells the world over without tariffs, albeit with a few notable exceptions," says Jonathan Morgan, CEO, Object Matrix CEO, maker of cloud and hybrid object-based storage.

The Cardiff-based company also sells the hardware servers to go with its asset management software. On that side of things, the company says it has taken precautionary measures to ensure that it can get its hardware builds made inside and outside of the EU. 

"The whole Brexit situation has already devalued the GBP, making our goods less expensive the world over," Morgan says.

In terms of risk mitigation, London-based social streaming and webcasting specialist Groovy Gecko has already deployed encoding equipment to two sites in Europe, "so traveling will be easy and quick without any potential customs," says Craig Moehl, CEO. "In addition, we anticipate that more events will be broadcast via LiveU or satellite to our UK hub if there are any issues. We are duplicating and housing essential equipment outside of the UK. This enhances our scale and disaster recovery capabilities so it's good practice."

Moehl doesn't expect Brexit's impact to be great unless budgets are affected. "If the pound crashes, we will be a lot cheaper than Europe and gain more business," he says. "In addition, we provide our clients with the option to transact with a EU-registered company should they prefer."

Sarah Platt, director and co-founder London-based live streaming producer Kinura says "It feels like no-one really knows what the long-term impact will be. It's the uncertainty that is the worst thing. One of the ironies is that we've produced livestreams of quite a few Brexit debates, so on that side of things you could say it's good for business, but actually we feel that no deal will negatively affect many of the global businesses we deal with and make the UK worse off."

Visa Change: Red Tape

The visa issue is more problematic regardless of a deal or a hard Brexit scenario. In the case of a deal, free movement ends at midnight on 31 December 2020, after which a new visa system will come into force. In the event of no deal and until 31 December 2020, EU citizens can enter the UK to live and work for up to 90 days without a visa. After 90 days they can apply for European Temporary Permission (probably costing between £250 - £500) to live and work which, will last for three years. Thereafter they will need to apply for the skilled workers visa. The costs of a five-year skilled work visa could be as high as £9,000 (US $11,900). Either way, red tape may be a particular problem for small companies that don't have the ability to scale up their human resources. 

Impact will be most keenly felt by those UK based companies that employ a significant number of people from the EU or rely on being able to ramp up quickly with freelance talent from the EU. Neither of these scenarios is as likely to impact the streaming media production sector as much as it will do for adjacent creative industries such as animation and visual effects postproduction, where up to a third of the UK's 6,000 employees are from member states.

"Obviously, with Brexit, the rules on immigration will change," says Morgan. "In theory, some politicians say that this will mean we can get the best talent from anywhere, but in practice we just don't know yet how that is going to work or how quickly the changes will come about. 

"We take the view that things are unlikely to fundamentally change in the short term, and that good quality software developers will always be able to work in the UK. When we travel abroad to the EU, I can already imagine standing in the 'other passports' line, grumbling about the stupidity of it all … but in reality, that won't change things too much for us as a company."

For businesses like Kinura's tied up in the world of media and marketing, a lot of the impact will be around legal overhead for things like EU data. 

"We've already had to spend so much time on updating processes and documentation because of GDPR," Platt reports. "There are concerns about added bureaucracy of employing staff from the EU, but to any sensible company that isn't going to be the greatest concern. We have lots of crew on our roster who are EU nationals and they don't seem to concerned about applying for 'settled status.' Everyone is just waiting to find out the final decision."

Creative Industries: Dented

Wider hard to the UK's creative industries is perhaps the more significant cause for concern over the long term. 

"Impacts to the broader ecosystem could be felt," says Moehl. "If there are price increases (due to tariffs and duties) to the broadcast, AV, and production industries then we may feel that impact. However, innovations to provide substitute workflows where possible and moving production functionality (such as graphics generation and overlays) will mitigate some of that risk in the medium term."

The UK creative industries generate more than £100 billion (US $132 billion) a year to the UK economy and 3.12 million jobs, according to the Creative Industries Council, a joint forum between the creative and digital industries (including TV, computer games, music, and publishing) and government. It accounted for £27 billion (US $35.7 billion) of export services in 2016, the latest available year of data or 11% of all UK service exports.

"The success of the creative industries should never be taken for granted by the government," warns Morgan. "Other governments have targeted that and will try and strike while the UK is in transition. The UK needs to ensure that it prioritises its successful industries and Creatives should be top of that list."

The UK, specifically the area around London, is the most significant hub in the EU for linear and on-demand services targeting other countries. Around 500 pan-European channels currently use an Ofcom-endorsed licence, but this is under threat post-Brexit when such licenses might become invalid.

Discovery was among the first to announce plans to shut its UK playout hub. AMC and other networks like Turner Broadcasting are also mulling overseas options in Dublin, Madrid, Warsaw, or Amsterdam for an EU-wide licence, which also means physical relocation of some staff and services like satellite uplinks. 

 "If there's a no-deal scenario and creative companies ship out, then we could definitely lose business with some of the creative agencies we work for," says Platt. "You can see how there might be a knock-on effect for smaller production or tech companies if there are freezes on hiring or lengthy contract negotiations with EU partners. 

Like many UK citizens—and don't forget 48% did vote to remain with our friends in the EU –Platt finds it "pretty depressing" that people with talent or the right skills "may have a harder time working in the UK because of changes in the laws on free movement. 

"We are all having to push to remain positive in this climate. The trouble is there are so many scenarios, who has time to wrangle all of that in between delivering projects and day-to-day business?"

Technological convergence promises breakthrough for sports coverage

content marketing for Rohde Schwarz

At the NAB Show in Las Vegas (April 6-11,2019), it is apparent that there is not just one technology but a convergence of several. The technologies are advancing the industry at a breakneck pace. Nowhere is this more evident than in the arena of live sports.Here you will see developments in IP, Cloud, 5G and AI combining to transform the fundamentals of production, delivery and experience.

https://www.rohde-schwarz.com/uk/solutions/broadcast-and-media/always-on-blog/posts/03-19-sports-coverage_250866.html

CTOs can see tremendous potential in the convergence of these technologies. At the same time, they must also feel that the foundations of which their existing business is based on, is changing right underneath them.

The increasing demand for live events has burst wide open, thanks to new technology enabling reliable, high-quality, at-home or remote production, over the internet. In turn, broadcasters are finding the flexibility to produce and distribute more video content with fewer resources.

If implemented correctly, remote production can reduce the movement of people and OB equipment; increase the utilisation of kit; reduce on-site setup times and maximise the efficiency of production teams. Many factors stop this being realised completely. Among the most pressing is the amount of bandwidth required to transport uncompressed video; varying bandwidth availability, and QoS at each venue as well as different workflows for different events requiring different equipment.

Ultimately, the aim is to move all the equipment to a centralised production centre except for robotic cameras. This would mean replacing OB hardware with replay servers, switchers and graphics in the Cloud.

We are quite a few years away from this happening at Tier one events. Satellite and dedicated fibres remain the quickest and most reliable means of delivering high-quality signals. For the time being it trumps the internet only route.

Manufacturers are keen to steady the pace at which they must transition from box-shifting vendors to purveyors of software-defined tools offered on a pay as you go rate.

The introduction of 5G broadband could transform contribution links in the next few years. Initially, costs are likely to be high, and networks will be rolled out in limited urban areas. There will also be networks built for major events like the 2020 Tokyo Olympics. Cellular link vendors are preparing to outfit their transmission kit with 5G chips.

5G will be significant for delivery, with bitrates of 1 Gigabit to 10 Gigabit and millisecond latency promised. This should make 4K live streaming and interactive (personalised) user experience as well as Virtual Reality (at 4K per eye) commercial propositions.

4G is already at breaking point with the amount of data it is handling; the majority of which is video. 5G unlocks this and more. The capacity of an end to end 5G chain (blending wireless and fixed-line technologies) will enable delivery of vast amounts of data, unlocking an era of content personalisation.

On the production side, machine learning algorithms are being adapted to automate live sports production and publishing. Some systems already do this, using remote, and automated camera feeds incorporating AI-triggered graphics and virtual ad tools. Others apply the AI/ML brain on the cache of just recorded material to pump out highlights’ packages in next to no time. The core of these is automated tagging and analysis of metadata for slicing the media into. Eventually producing individual viewer experiences.

Such on-demand curated editorial is underpinned by object-based delivery. BT Sport has plans to advance in this area, a move that will enable viewers the chance to personalise and control aspects of programme output. These could include; controlling stadium crowd noise levels and different live commentary. The BBC, also an OBB pioneer, is pondering how audiences in 2022 might create their own personalised streams for Match of the Day.

It is worth mentioning that camera arrays are being installed in major club stadiums. They will be primed for 360-degree real-time augmented reality as well as unlimited viewing choices.

In the next phase of UHD rollout, we may factor in 8K HDR and 60-120-240fps, this will appease the growing interest in gathering data from sensors on athletes during play.

There is an astonishing range of technologies coming forward, all breaking the conventional frame of broadcast action and bringing an even greater immediacy and intimacy to our sporting experience.

UK VFX industry weighs the cost of Brexit

IBC

The UK’s VFX houses warn that cost of visas under current Brexit proposals risks the sector’s global competitiveness.

https://www.ibc.org/production/uk-vfx-industry-weighs-the-cost-of-brexit/3652.article

Whichever way you cut it, Brexit will curtail the competitiveness of the UK’s VFX business.

Not immediately - there is no cliff-edge awaiting firms after March 29.

But in either a deal or no deal scenario the cost of the government’s current immigration proposals could see work relocated away from Soho, denting the health of the wider creative industries.

“If there is a down-turn in the UK VFX industry as a result of a restricted talent pool, I believe the loss will not only be an economic one,” says Antony Hunt, CEO of the Cinesite Group. “The UK film industry will also lose some of the ‘soft power’ – or cultural influence –we currently have in the world. That loss cannot be quantified but will be hard felt.”

Sir William Sargent, Co-founder and CEO at Framestore, says, “We take it for granted that everyone in the UK and Europe works on projects together. We need to draw on European talent because the UK’s pool is not big enough. Add in more expense and frictions where there were none before and there is inevitable risk to our industry even if the impact is felt 3-5 years down the line.”

The VFX and animation industry is particularly sensitive to changes in immigration policy because a third of the 6000 artists employed at UK houses are from the EU or EEA (excluding UK and Ireland) and 13% from the rest of the world.

Framestore, which worked on two films shortlisted for the Best Visual Effects Oscar, employs over 1000 staff in London, including 300 representing every member state.

UK VFX and animation companies are putting their arguments to the government via trade body UK Screen Alliance. CEO Neil Hatton says, “It’s bound to mean more bureaucracy, more people employed to manage the red tape and a huge problem for small companies that don’t have the ability to scale up the HR to deal with that.”

Transitionary arrangement

The building blocks of a visa and skilled migrant worker scheme have emerged, but detail is still lacking in the case of the transitionary arrangements in the event of no deal.

The Settlement Scheme for EU citizens already in the UK by March 29 will run regardless of whether there is a deal or not. EU workers with either Settled or Pre-Settled status can live and work in UK as they do now and will not require a visa once free movement of people ends.

“There’s lots of flexibility in the settlement scheme as EU citizens can be out of the UK for up to six months in any 12-month qualifying period and still retain pre-settled status, allowing them to build up the five continuous years necessary to achieve Settled status,” explains Hatton.

EU citizens can apply for the settlement scheme from now until the end of 2020 (and potentially to June 2021).

The main difference in the Settlement scheme between deal or no deal is the effective date of the end of free movement.

In the case of a deal, free movement ends at midnight on 31 Dec 2020, after which the new visa system proposed in the Immigration White paper will come into force.

If it’s no deal, free movement ends on 29 March 2019. EU citizens who are not in the UK prior to that point would not be eligible to apply for settlement.

“I don’t believe the UK VFX industry is going to come to a juddering halt,” says Hunt. “We have good people here. However, Brexit is a real concern to us because Cinesite is growing exponentially.”

In the event of no deal and until 31 December 2020, EU citizens can enter the UK to live and work for up to 90 days without a visa. After 90 days they can apply for European Temporary Permission (probably costing between £250 - £500) to live and work which will last for three years. Thereafter they will need to apply for a skilled workers visa under the new system.

“While this avoids a cliff edge for recruitment it creates difficult and potentially impossible obligations on employers when checking documentation for the right to work, as EU passports are not stamped on entry to the UK,” explains Hatton.

For example, it would be impossible to tell the difference between an EU citizen who had been in the UK for over five years and had the right to Settled status but had not yet applied and an EU citizen who had been in the UK for more than 90 days after March 29 and therefore needs to apply for European Temporary Permission to continue to remain and work.

Skilled Worker visa

It is the proposed new skilled worker visa, due to be introduced in 2021, which remains the major cause of concern for VFX companies. The costs are expected to be severe.

“Whilst there will be no quota restrictions, it is clear that the lever of control on migration will be the visa cost and the salary threshold,” says Hatton. “The system will allow companies to attract, in the PM’s words, ‘the brightest and the best’, but only if you can afford them.”

A five-year skilled worker visa - the preferred route for companies wanting to retain and develop promising talent - could cost around £9000, but the cost to the company of running the bureaucracy of visa compliance is even higher.

“It will place a considerable burden on HR and recruitment departments who will need more staff,” Hatton says. “This is also a barrier for smaller companies that may not be able to afford the overhead. If the visa application process is outsourced [to a lawyer] it can cost £2,500 per visa.”

Hunt says, “A more flexible, affordable regime will be particularly important for VFX studios as we’re particularly reliant on EU talent and are unlikely to have the resources to cope with complex visa applications.”

With a third of current EU workers in VFX on permanent contracts and therefore likely to stay (as Settled status citizens), UK Screen Alliance estimates at least 500 Skilled Worker Visas will be required every year, adding up to £4.5m across the sector (more if the initial application is for two years then renewed for three). This is because the proposed minimum salary threshold of £30,000 is considered too high. Currently, 7% of the VFX and animation workforce hired from the EU are paid less than this.

“To increase salary levels above £30k would cause significant wage inflation as it would need to be offered to all workers at that level and not just those from the EU and would also erode the differentials with pay grade that are immediately above,” Hatton says.

UK Screen estimates that this could add 3-5% on payroll costs, “seriously impacting competitiveness.”

The Alliance is lobbying the government to reduce the minimum threshold to £20k or, failing that, link the threshold to appropriate rates defined for Shortage Occupation List roles identified as compositor, animator and technical director among others.

“In the long-term the current visa programme will fall short,” asserts Hunt. “Cinesite will need non-UK VFX artists for many years to come, we will always benefit from highly-skilled overseas artists with the knowledge they bring and share. We must be able to continue to attract the very best talent and make hiring decisions based on artistic talent and merit rather than on sovereignty.

He adds, “Expensive visas with unrealistic minimum salary thresholds would significantly add to our operating costs and impact the UK’s wider VFX sector’s competitiveness in the global market.”

UK workforce

Balanced against the need for skilled migration from the EU is the need to develop a home-grown workforce. The VFX industry has made considerable efforts to build a coherent pipeline for UK talent. The NextGen Skills Academy is industry supported and provides specialist courses for 16-18 year-olds in VFX, games and animation.

“There have been some significant individual successes with apprentices, but scalability of the scheme remains a problem,” says Hatton. “There remains a significant sum of unspent Apprenticeship Levy that is all but impossible to deploy. The Levy needs to become more flexible to cover all training needs and not just apprenticeships. There also needs to be a more coordinated partnership approach between industry and universities to ensure that UK graduates are more work-ready.”

While investment by UK facilities is on hold amid the uncertainty, few believe the industry will stall post-Brexit. Neither does the sector appear to have experienced a reduction in demand for its services. This reflects recent BFI figures that show the UK’s high-end television and film production benefitting from £3.1 billion spend last year.

Total VFX spend in 2016 was £510.7m generating £1.043bn in GVA for the UK economy and supporting 17,940 direct and indirect jobs, according to the UK Screen Alliance.

Powerhouse facilities like DNeg, MPC, Cinesite and Framestore could potentially shift work to their divisions in Canada or India, but Sargent dismisses the idea. “We already spread work round. Some work has to be done in the UK. There are all sorts of logistics and reasons why you’d locate jobs in one part of the world or another and much of it does come down to talent. Adding friction into the system where it doesn’t exist now will take competitiveness out of the UK.”

The government has promised a year-long consultation around some contentious elements of the visa but if greater flexibility toward creative industries is not forthcoming the impact on facility operating costs would undermine the UK’s wider VFX competitiveness in the global market.

 “The UK has strength and depth across the film industry, with access to some of the best creative talent, as well as world-leading financial, legal and professional services,” says Hunt. “I think it’s unlikely that any other EU centre will strongly challenge us in the short-term. In reality, the precise impact of Brexit won’t be clear to Cinesite for some time yet – much will depend on the type of Brexit we get.”

Production work has already become global with tax incentives, regional low labour costs and lower computing costs, which put pressure on houses to reduce costs and set up sister facilities in tax advantaged or low-cost regions. This is a model which is increasingly being tapped by content producers.

“In the long-term, the most effective action the government could take to safeguard UK VFX jobs would be to make the UK comparable to other tax advantage regions,” urges Hunt, citing Montreal as the strongest example. There, rebates are as high as 40% which is why UK companies such as Cinesite, Framestore, MPC and DNeg have established studios there.

There has been an increase in facilities opening in Montreal and Australia, a trend set to continue but not necessarily as a direct impact of a no-deal Brexit. Cinesite last year bought German VFX house Trixter for clients to tap rebates as high as 45% for animated and visual fx.

Framestore, which has Chinese investment, came in at the ground floor of UK post a quarter of a century ago and has helped build itself along with the whole of UK VFX into a world class location to do place the highest profile work.

“It took us 25 years to get where we are and if we start to dilute it, it will not be easy to maintain our dominance of the sector in Europe,” Sargent says.

Would Brexit affect UK film and TV tax relief?

The UK screen sector tax reliefs are written in UK law and will therefore be untouched by Brexit. However, these reliefs are constrained by EU state aid law.

“The boom in inward investment production shows that for productions conducting principal photography, the tax credits are very effective at attracting work to the UK,” says Hatton.

“That success means that productions shooting in the UK often reach the EU state aid cap which is set at 80% of the budget. This was supposedly designed to spread work around the EU but often drives post and VFX work to Canada, as once capped-out in the UK, the effective tax credit here is 0%.”

Reliefs of 40% are available for VFX in Montreal and Germany has also increased their available relief to 40% in Stuttgart and Munich.

Larger VFX companies that have international operations can simply switch the work overseas, typically to Canada, where the production can receive still receive the 40% incentive. This option is not open to smaller VFX companies that only operate in the UK, who then miss out if the bulk of shooting has already occurred in the UK.

“Only in the hardest of Brexits is the UK likely to be entirely unshackled from EU state aid regulations, which could allow the freedoms that other states like Canada have when legislating their tax incentives,” says Hatton. “Even then there would need to be careful analysis of the political risks and financial impacts, both positive and negative, before proposing any adjustment to the UK tax credits for film and TV.”

The £9000 cost of a Skilled Work Visa under current UK government proposals breaks down as:

Certificate of sponsorship £199; Application £464 (if less than three years or £928 if more than three years); Biometric Residence Permit £56; Biometric enrolment £19.20; English Language test – approx. £200; Immigration Skills Charge - £1000 per year payable up front - £5000 for five years; Immigration Health Surcharge £400 per year payable up front (£2000 for five years which is also payable for each dependant of an artist if they come over with them (and facilities don’t usually cover dependent’s costs).

To this, UK Screen Alliance have added an allowance of £1000 for in-house admin. It costs between £536 and £1476 to have a licence to sponsor Tier 2 visas plus the staff overhead to ensure compliance.

The future of media

InBroadcast

Object based broadcasting, cloud post production, ultra high frame rate cinema and entertainment on wheels

p42 http://europe.nxtbook.com/nxteu/lesommet/inbroadcast_201903/index.php?startid=42

Cloud lift off

Cloud is coming of age lifting post production out of the restrictions of physical location. Long theorised, the technology is rapidly maturing. Late last year vfx house Untold Studios launched in Shoreditch as the world’s first cloud-based studio. It has Sohonet links for super-fast connectivity to AWS Cloud where all processing and rendering take place. From Linux-based workstations artists can open 3D design, animation, compositing and paint software. All storage, creative applications and processing takes place in the cloud.

“What we’re doing is putting technology back at the forefront of what a creative studio can be,” says Sam Reid, Head of Technology. “Instead of being a brake to the creativity of artists we want the technology to enable anything they want to do.”

The set-up enables the facility to ramp up or scale down really quickly just paying for the compute and storage it uses with no capex outlay.

As data demands have grown the pressure on finite on-premise storage space has grown. Companies like BASE Media Cloud offer facilities a managed way of outsourcing their requirements to the cloud. Aframe is in the business of facilitating cloud-based production. Forbidden Technologies has developed a cloud-based remote production suite based on its codec Blackbird and continues to develop browser-accessed editing tools. VFX tools developer Foundry markets a cloud-based pop-up vfx pipeline for smaller houses wanting to take on large projects.

Ultimately, it will be a matter of the virtual facility coming to the talent rather than the talent having to move to a central location. Vfx house Jellyfish has already armed itself for a bordered post-Brexit world by investing in a cloud-based infrastructure. In theory, artists could work from Paris or Berlin with all the material accessible and secured online.

“The technology has now evolved to a point where any filmmaker with any VFX project or theatrical, TV or spot editorial can call on the cloud to operate at scale when needed — and still stay affordable,” says Chuck Parker, Sohonet CEO. “The ability to collaborate in realtime with teams in multiple geographic locations is a reality that is altering the post production landscape for enterprises of all sizes.”

InCartainment

With connectivity for mobile phones saturated in many markets, attention is turning to joining everything online from self-driving cars to high-performing industrial robots.

The dual trends of 5G networks and the explosion in sensor-laden products are the enabling forces for what mobile operator’s lobby group GSMA calls ‘the era of Intelligent Connectivity’  

This year the first consumer handsets with Qualcomm’s Snapdragon 855 chip will be released. These will be capable of two-way Gigabit speeds, computer vision and neural network capabilities to support the surge of AI voice, gaming and extended reality experiences over 5G networks.

The telecom network is evolving and is quickly becoming integrated into every kind of industry. According to Ericsson’s November 2018 Mobility Report [https://www.ericsson.com/assets/local/mobility-report/documents/2018/ericsson-mobility-report-november-2018.pdf

Ericsson Mobility Report November 2018 Ericsson Mobility Report | November 2018 Contents Articles 20 Making fixed wireless access a reality 24 Streaming video – from megabits to gigabytes www.ericsson.com

] by 2024, the number of connected devices will exceed 22 billion. 

Connected vehicles are the current fastest growing connected vertical outside of phones. AT&T already has the most number of connected cars “in history” at 27 million, according to research firm Chetan Sharma Consulting.

The introduction of driverless cars over the next few decades is predicted to open up an infotainment market worth anywhere from $800 billion in 2035 to $7 trillion by 2050, according to Strategy Analytics. Computer, internet and consumer electronics companies are jockeying for a piece of the pie. None more so than Intel, which coined the term Passenger Economy for the explosive growth in yet-to-be-realised economic potential when today’s drivers become idle passengers.

Intel partnered with Warner Bros. to mock-up an autonomous BMW X5 with an experience based on the DC Comics universe. The vehicle’s interior was fitted with a large-screen TV and projectors spanning 270-degrees, mobile devices, sensory and haptic feedback, and immersive audio and lights to offer passengers a virtual ride moderated by Batman’s trusted butler, Alfred.  Both companies have vowed to continue R&D on the vehicle at the Warner Bros. lot in Hollywood.

The future of in-cabin entertainment is a focus of Amazon and Samsung which are integrating their voice assistants into future car models. Other companies with automotive ambitions advancing AI-driven autopilot systems include Nvidia, LG and Microsoft.

Car manufacturers are wanting in on the game too. Audi is developing Holoride that enables VR experiences from the backseat. The tech is designed to solve the major hiccup in watching VR content while on the move - motion sickness.

Object Based Broadcasting

Of all the technology initiatives that broadcasters are exploring the one with arguably the most profound impact is not UHD-HDR or virtual reality. It is the ability to slice and dice content into a personalised feed delivered just to you on-demand, with customised editorial, length and quality of experience that fits the device you are using and the environment where you watch. This is all underpinned by object-based delivery over an end-to-end IP acquisition-to-distribution chain.

BT Sport recently revealed that it is developing plans for OBB, a move that will enable it to offer viewers the chance to personalise and control some aspects of programme output such as the audio or graphics. Example applications include controlling stadium and crowd noise levels versus commentary, and, for blind or partially sighted viewers, allowing access to Audio Description of live sport.

By breaking down a piece of media (a frame, a piece of audio, an object in the frame) into separate ‘objects’, attaching meaning to them and describing how they can be rearranged, a programme can change to reflect the context of an individual viewer. The individual would, in effect, be allowed to curate their own programme.

The BBC imagines how audiences in 2022 might create their own personalised streams for Match of the Day, the weather forecast or even EastEnders. There could be interactive drama producers who use automatically marked-up rushes of actors to offer bespoke packages, and who have access to all camera streams (from the cloud), with rushes classified automatically from AI-powered transcription.

“It’s about moving the whole industry away from thinking of video and audio as being hermetically sealed, and towards a place where we are no longer broadcasters but datacasters,” explained the BBC’s CTO, Matthew Postgate.

The next step for object-based media pioneers is to find ways of making this concept scale, and making it infinitely repeatable and standardised.  The BBC, for example, has devised a media composition protocol to help drive scale and standardisation.

There is a maze of complexities to solve. An object-based workflow will need to manage rights for new versions of content that are assembled from many existing content parts. Then there is the IP infrastructure needed to efficiently narrowcast different versions of, say, Match of the Day to millions of viewers at a time.

Despite the challenges, this is the way forward – content tailored just for me and you. The more sophisticated this becomes, the more personal the service will be, as the User Interface itself will be different for each individual.

High Frame Rates

The artistic merits of high frame rates have divided audiences and critics but some filmmakers are intent on breaking out of the arbitrary 24 frames a second speeds adopted to accommodate the synchronisation of sound reels a century ago.

While director James Cameron appears to be prepping his Avatar sequels in HFR, the format has a less likely champion in Ang Lee, maker of Brokeback Mountain. His previous film, Iraqi wartime drama Billy Lynn’s Long Half Time Walk, was a box office dud, but its production in 4K, stereo 3D and 120fps was unprecedented. So much so that it was only able to be shown in its full fat glory in five theatres (two in the US, two in China, one in Taiwan) outfitted with specially customised projection equipment.

Later this year Lee will release the sci-fi thriller Gemini Man which was also shot at 4K 3D and 120. The film’s cinematographer Dion Beebe suggests that HFR is “without question part of the future language of cinema” particularly tuned for younger audiences more used to seeing crystal clear images at 60 up to 240fps from computer gaming.

Lee is using the high frame rate largely because he wants to shoot natively in 3D – a brave move on its own considering how few filmmakers are doing this. The speed of playback erases the judder and blur inherent in capturing fast action stereoscopically or when panning the dual cameras.

HFR also lends the film a unique look that some describe as like a window on the world and another grand step toward immersion in the story. Others think that its ultra video quality is alienating and somehow removes us from the innate comfort of viewing a story as a sequence of flickering images on a screen.

Beebe describes the extreme clarity of Gemini Man’s visuals as “incredibly vivid and confronting” and talks of alternating the speed for different scenes to convey different story moods, much in the way one would light or compose a scene.

Special effects legend Douglas Trumbull as been trying to get HFR to go mainstream for decades and the format did find a niche as a short form attraction in theme parks. It could be that the technology has yet to find the right story. It wasn’t The Hobbit: An Unexpected Journey, but it could be the super bright CGI space opera of Avatar or maybe the Mohammad Ali biopic that Lee plans for his next project.

HFR is the next stage of the roll out of UHD on TV. With high dynamic range coming in this year attention will turn to upping the frame rates to 60 then 120p which would be incredible for sports like soccer. Audiences would welcome that, but seem to have a problem suspending disbelief watching HFR narrative drama. Just as Cameron kick-started the entire 3D cinema craze with Avatar, my bet is that his sequels will also prompt exhibitors to buy into LED cinema screens which are capable of playing back 8K 120p and beyond.