Pixel Power: Is it time for OPEX?

By Mike O'Connell | Pixel Power | Published 21st July 2020

Having lived with COVID-19 for a few months now, what have we in the broadcast industry learned? I can offer two take-home lessons.

First: we have to be a whole lot more agile than we ever thought. As broadcast engineers we have lived with the idea that a project takes a couple of years, from deciding what we want to do, through meeting vendors, maybe a proof of concept or two, then on to a final spec, installation, testing, training and rehearsals.

In 2020 we have had to roll out emergency solutions to keep our stations on the air in hours, not months or years.

Second, we have to have a much more flexible and perhaps bolder attitude to finance. An important part of that two year project timescale would have included an outline budget for first stage approval, then refining the project costs through to final contract.

But if we need a solution up and running this afternoon, we need to be able to pay for it by tomorrow – or maybe even this morning. The death of the capital budget is another transformative change that COVID-19 has brought to our lives. Opex is another of those buzzwords that has been around the industry for a while, without ever gaining too much traction. Inertia ruled and since broadcasters have always worked on capex it was felt no reason to change. Well now there is a reason.

First and foremost, Opex provides a tight alignment to output. Whether it is 3D graphics or a virtualized software only playout channel, an enlightened vendor and pay-as-you-play cloud hosting, you should pay for only the functions you need, when you need them. Pixel Power has allowed you to buy licenses outright, or by time, or by output for several years – a pure Opex model right here and right now.

Capex encourages you to have equipment sitting in the rack in case you need the facilities. While sitting in the rack that equipment is taking up space, power and air-conditioning even if it is not giving you an output and earning you money. If you only use 3D graphics for Saturday sport, why pay for the machine to be running the other six and a half days when it’s not working?

That principle applies on a bigger scale. We have a presidential election this coming November (although thanks to the pandemic, it is going to be a strange one). Do we really want to spend a lot of capital on facilities that, after November 3rd, we are going to have to find work for?

The other advantage of Opex is that the money can be found from multiple sources. If you need specific functionality – like complex graphics for an election – you can fund the licenses, for precisely when you need them, through the production budget.

The consensus of opinion during this pandemic seems to be that we may run out of content in August. To fill the gap, we are going to have to do things differently because we simply can’t have people working physically closely together any more.

If we need new equipment and techniques for a short time (we all sincerely hope that the pandemic will be over soon) then it makes no sense to spend capital on temporary equipment and facilities. And if it makes no sense now, is it not time to make Opex the primary way forward?

FULL ARTICLE AVAILABLE HERE