MediaTech Radar is a bi-weekly newsletter put together by IABM’s Head of Knowledge Lorenzo Zanni. It focuses on a spotlight topic in MediaTech and reflects on a series of past, present, and future business developments in the industry. In this edition, our spotlight topic is Backlight’s launch and investment in MediaTech.

MediaTech Spotlight: Analysis of Backlight’s launch and investment in MediaTech

A spotlight topic in MediaTech.

On 12 April 2022, Backlight, a newly formed media technology company, announced a strategic $200m+ investment backed by growth equity firm PSG in five SaaS media tech businesses: ftrack, iconik, Celtx, Wildmoka and Zype. I had the pleasure of interviewing Backlight and Wildmoka before NAB Show. As I mentioned in the previous newsletter, I wanted to share my reflections on the significance of this investment and the trends it reflects. These reflections were turned into the questions I asked both Backlight and Wildmoka’s executives in the interview – do watch the interview if you want to have a full picture of how they answered. However, if you want to read some thoughts about it first, here’s some bullet points:

• This is a significant investment uniting a set of specific technology tools from content creation to distribution under one common umbrella, as well illustrated by ftrack’s graphics accompanying its announcement of the acquisition, which I have shared below:



• The obvious driver behind this investment is the accelerated demand for cloud-based and SaaS technology in media because of pandemic-induced restrictions between 2020 and 2021. This has been well documented by IABM research, which has, though, also highlighted how trends such as cloud adoption and the move to remote production models have created additional complexities and dilemmas for media businesses intending to move their workflows to the cloud.
• In December 2021, I interviewed ZDF’s Robert Amlung about some of the economic and operational challenges posed by cloud. During the interview, he mentioned that his business didn’t want to become dependent on one cloud provider though required integration between the services it used – he suggested that increasing standardization in cloud could be a way to address this. In the Media Factory Economics report published in partnership with Dell last year, we selected some of the unresolved dilemmas regarding the deployment of cloud operating models in media, one of which was trading off between lock-in and complexity: “Some media companies are still pondering about best-of-breed vs end-to-end in the cloud. While most prefer complexity over lock-in, they are still working on minimizing this complexity to make a solid business case for the cloud. As evidenced earlier, this is a major area of focus for media companies going forward, which will likely attract investment.” The disconnect between demand and supply in this area remains arguably unresolved.
• Some of the dilemmas reported above echoed in the press release announcing the acquisitions. Ben Kaplan, President and CEO of Backlight, said of the investment: “I believe the explosion and democratization of content creation, combined with the incredible growth and fragmentation of consumption, have created massive complexity and new opportunities for creatives and content owners. The market is demanding innovative, flexible, cloud-based solutions to modernize media workflows. With five incredible business units, each led by visionary CEOs delivering compelling, differentiated solutions, Backlight is well positioned to be a trusted partner for customers with mission-critical creative processes and video pipelines.” Note the focus on complexity, flexibility, and differentiation. I was keen to see how these technology tools were going to be organized under the same holding company which is why I asked Ben about it. He said that individual businesses will preserve independence (consistent with the use of the expression “business units”) to maintain their best-of-breed focuses, while delegating support functions such as human resource management to Backlight. It will be interesting to see how this umbrella organization will develop in the future and whether there’ll be any integration at the technology level.
• Another obvious driver is represented by the fragmentation of the media technology solutions market vis-à-vis the financial scale required by SaaS models. This investment includes talent, which has become scarce as of late, as well as continued technology development to meet users’ changing needs. With this investment by Backlight, the acquired companies will be able to maintain their specificities while being able to grow their offerings at scale, consistent with the point made above as well.
• I forgot to mention the content boom, which is ultimately the origin of the cause-effect logic exposed in the quote above (“the explosion and democratization of content creation”). IABM research has well documented this. Moreover, we published a Briefing on the potential opportunity provided by the growth of the creator economy. This is a trend potentially broadening the market for cloud-based content creation.
• The creator economy leads me to yet another potential driver behind these acquisitions, which is again provided by words included at the end of the press release announcing the deal. “There is a large market opportunity to improve the way content producers, owners and distributors create value, starting with the media and entertainment industry but extending to any enterprise investing in rich media and video,” said Matt Stone, managing director at PSG. Note that they envisage the start of their growth curve to be media, but the extension to be enterprise. As we wrote in the MediaTech Spotlight on MediaTech Convergence in a past newsletter, this is becoming a principal target for many media tech suppliers. There’s a catch here though. As we reported, many media tech suppliers are going after the enterprise market with an end-to-end strategy, while this deal highlights a more nuanced approach to do so. This topic was covered at the end of the interview.

MediaTech Watchlist: Avid, PSBs, Discovery and more…

A watchlist of selected past, present and future business developments in MediaTech.

• Avid announced in March that it had reached a multi-year subscription agreement with Arab Telemedia Group (ATG). Avid said in the press release that: “Numerous post-production houses, broadcasters and other content creators are ending their reliance on perpetual license software and are turning to Avid’s subscription-based creative tools and content platforms,” consistent with the progression in the move to subscription-based models in media technology. ATG is: “fully upgrading its state-of-the-art production infrastructure to go beyond 4K to deliver 8K content, one of the first production houses in the Levant region to do so.” This follows their first deal with Avid and move to 4K in 2015.
• In a previous newsletter, we talked about the disadvantages of public broadcasting in the transition to direct-to-consumer (DTC) platforms. This article from Variety cites a European Audiovisual Observatory’s report that found that US-based SVOD operators have gained ground in the European market in recent years: “Looking specifically at all SVOD subscriptions in Europe, however, Netflix, Amazon, Apple, and Disney dominate, accounting for 72% in 2020,” while public broadcasting funding was cut: “Between 2015 and 2020, funding in Europe contracted by $881.48 million.”
• Discovery will produce over 600 individual broadcasts during 2022 cycling season, relying on remote production for most of its coverage. The linked article from TVBEurope also says: “The broadcaster said it is planning to offer its largest commentary line-up of 70 commentators providing commentary in 21 languages.” Scott Young, SVP content and production at Discovery Sports, told TVBEurope: “The advantage of remote production is not just cost containment, which is what most people think it lends to, but it allows us to be far more agile, it allows us to move less technical equipment as well as people around the world. That allows us to put most of the budget spent on the logistics back into editorial content creation.” While technical resources will be common across different markets, editorial and commentary will be localized, according to Young.
• Consolidation in MediaTech continues. In May 2022, LiveU acquired easylive.io and Telestream acquired Encoding.com. Both moves reflect the increasing interest and investment in cloud-based media workflows, as well reported by the linked articles from TVNewsCheck.
• Synamedia acquired Utelly in the same month, in an acquisition highlighting the importance of metadata aggregation for content discovery.
• On the demand side of MediaTech, consolidation continues as well. In May 2022, BT inked a deal with Warner Bros. Discovery to create a new premium sport offering for the UK & Ireland through a 50:50 joint venture. BT Sport and Eurosport brands will continue to operate in the UK market “before being brought together under a single brand in the future.”
• In the last newsletter, I shared some data points on the growth of virtual production. At NAB Show 2022, this topic was covered in a very interesting session run by Versatile Media – this was part of the DELL TALKS @ NAB 22, hosted by Dell Technologies, NVIDIA and IABM. I participated in the event as well, presenting the latest IABM research on M&E convergence.

Thank you for reading this newsletter. If there are topics you would like me to cover, or have information/ideas you’d like to share, please get in touch with me.

Lorenzo Zanni

Head of Knowledge

IABM