Interview: EMG Italy’s Francesco Donato on the challenges and benefits of cloud TV production

Roberto Landini speaks to EMG Italy CTO Francesco Donato about the impact of cloud on TV production and finds out where EMG Italy is at when it comes to implementing cloud operations.

What are the key considerations when it comes to choosing cloud solutions?

Before talking about the use of cloud solutions, it is important to define the reference market, the type of product to be created and the business strategy.

The market is a relevant issue, especially when it comes to designing the solution, while the product requires the adoption of certain system characteristics, whether physical or virtual. Then the workflow, as well as the applicability and effectiveness of the solution, must be considered.

The final factor is the business strategy and economies of scale. The main goal is to reduce the average cost and increase production volume until all machines are working at full capacity and for the longest possible period; therefore, the requirement is to be able to distribute the fixed costs over the greatest number of productions.

The advantages of economies of scale are clear – efficiency, cost and volume management – but this can only be achieved if there is enough demand to engage the cloud system as constantly as possible.

And, therefore, we get to the point: the television production market is not consistent with the concept of economies of scale because of its limited volumes and non-constant commitment; it is closer in dynamics to the concept of economies of scope.

Economies of scope, in essence, is the diversification of the production chain to improve efficiency and the distribution of fixed costs using the system to produce different products intended for different users and markets. This will lead to greater revenues for the same cost of production, and a consequent improvement in margin.

Cloud solutions certainly represent the best option in terms of flexibility, reduction of fixed costs and efficiency. In fact, with the adoption of these solutions, it is possible to considerably contain the level of investments, if we are willing to accept an increase in operating costs.

“In short, we are firmly convinced that the path of cloud services and private data centres is the way to go”

It must be said that cloud solutions can be justified from an economic point of view if they are used for the creation of non-continuous productions, otherwise in the long run, due to higher average cost, they do not allow an improvement in operating margin.

Therefore, in my opinion, as regards the choice between a solution based on a local data centre and a solution in the cloud, it all depends on four fundamental criteria: market, product, workflow and economic strategy.

What situations are cloud solutions best suited to?

If we talk about television products, unfortunately, even if they all deserve the same attention and quality, we must define levels.

In high-level productions, cloud solutions still do not fully deliver the operational functions and dynamics, the workflows, needed for this kind of processing. This is due to infrastructural shortcomings. I am referring to connectivity which, for the creation of high-quality and complex products, requires access to services not yet available everywhere and that come with significant costs.

If today we wanted to create the workflow needed for high-level production, replacing the traditional use of resources in the field with a totally cloud-based solution, we would encounter difficulties in replicating all the technical-operational and functional devices that our staff use every day to create television programmes.

Technological progress is visible, fast and constant; I would say that every six months we can appreciate how much closer the finish line is to transferring processes and functions from our local servers/hardware to the cloud.

In fact, all providers are moving in this direction and it is a question of waiting months, not years, to arrive at the creation of a catalogue of services.

What if the product is of an average level? Or simple or simplified?

As far as this last type of production is concerned, cloud solutions are certainly applicable and already used, sometimes implemented on local data centres. In these cases, the technical-operational functions are already widely implemented and effective, and reliable workflows are clear.

Events and TV productions which in the past would not have been economically convenient to produce and distribute, have today become not only profitable but also a tool for increasing volume and therefore a means for improving the average cost of productions. Furthermore, we have a further beneficial effect determined by the adoption of new models based on the sale of licences to access cloud services and applications on a temporary basis. These contribute to improving the economic framework of television productions on a non-continuous basis.

Where are you at with cloud operations in EMG Italy?

We have already undertaken important initiatives with excellent results, both from a technical and an economic point of view. Just recently, we used a cloud solution for the capture and distribution of content with global coverage during the 2023 FISU World University Winter Games.

In addition, thanks to the experience accumulated and to the many services that we have been providing for several years in a remote production configuration for sport in the Italian market and beyond, we are working on establishing a shared private infrastructure to guarantee our clients the best television production services.

In short, we are firmly convinced that the path of cloud services and private data centres is the way to go.

This is also because our company is based in various countries, and we are sure that this additional advantage is decisive for promoting the success of the economy of scope and scale strategy. We think of a market whose borders are no longer an obstacle but, on the contrary, an additional lever. We can make the best use of resources, generating efficiency and skills in terms of service delivery, product quality and planning, so that we can always comply with the requests of our customers, who, like us, compete in an increasingly demanding and broader market.