Personal Note from the CEO

Wednesday, November 2, 2011

The Channel-in-a-Box concept, which is used to describe and generalize IT-based playout, is receiving increased attention from several well known broadcast vendors these days, such as Miranda, Snell, Evertz, Florical and, as of this month, Grass Valley. Welcome onboard, guys! Get ready to be patient as this is going to be a long, tough ride for you.

What PlayBox Technology has done, many years before these new competitors, is to see this IT-trend coming and design software architecture with the aim of having a modular, flexible and scalable product, quite a while ago - back in 1999. This has enabled us to drive the product development step by step, according to real-world requirements, assembled from a wide variety of different market segments. We are proud to be one of the very few vendors offering resilient and robust solutions, deliverable  today. Our customers very much appreciate the maturity of a product line that benefits from 12 years of a continual customer-driven innovation, including free 18/7 live support for the life of the product.

In the business of broadcast transmission automation, reliability is of the utmost importance, even surpassign features, in terms of importance. The PlayBox product line was first successfully deployed into a number of emerging markets, including Eastern Europe, India, Asia-Pacific, Middle East and Africa... which are the best places to prove reliability. Our multi-format AirBox playout engine excels in stress-resilience meaning that while a playout server is running, users can do all kinds of interactive changes to the playlist, such as ‘jump’, ‘next’ and ‘switch’ to live commands. This is a key differentiating factor between PlayBox Technology and several other vendors, who have struggled for several years to achieve stress-resilient multi-format playout. These vendors can offer a stable playout operation only in a pre-scheduled mode where a customer does not change the playlist at all. I am really proud of where PlayBox Technology has attained now in technological maturity and this ongoing maturation has enabled us to consistently deliver more than 30% revenue growth on a year-to-year basis, in each of the the last five years.

The PlayBox solutions are now field-proven in more than 10,500 branding and playout channels across the globe. The speed with which we grow this number every day shows more than good luck; it shows that we are riding the right technology wave. We have pioneered a concept which shines brightly today and has now become a dream for many new vendors, who join the game every month, with Harris and Harmonics maybe coming onboard too, at about NAB time next year. Some say that this IT revolution started recently but thousands of PlayBox customers know better. These customers have enjoyed the efficiency and reliability of PlayBox's integrated approach for quite a while. The PlayBox IT concept of Channel-in-a-Box, is nothing less than a powerful and radical trendsetter. It is changing workflows to file-based ones, dramatically facilitating global communications and defining new levels of cost-efficiency, which are extremely difficult for newcomer vendors to match. We have been able to set our own rules in this game, and we really enjoy playing it. New players are always welcome!

In the last two years we have seen several top-tier customers embrace early product prototypes from our competition, trying to use these for real, in a leap of faith that the size of the vendor will eventually resolve near-term reliability issues quicker. These customers have tried to remain patient for so long. They have really suffered at the end of the day and their frustration now rings the bell, that the well-recognized brand name does not bring IT engineering excellence and maturity overnight. As mentioned earlier, new players are always welcome to the game. This IT evangelization is not easy and we need powerful partners in the process!

We have learned other lessons in the course of the PlayBox product evolution. We have seen the importance of intuitive GUI interfaces. We have seen how easy it is to initially setup our Channel-in-a-Box systems, to drive them locally or to drive remotely – and to support and maintain them remotely. We believe that this game will soon become a mass business, eventually it will even become a commodity. If it takes 5-6 hours for the initial setup of system software; or if engineers have to fly onsite to fix a simple issue, then resources are limited to just a few deployments. Furthermore, starting prices will be vastly unattractive, as high as $100k for the first channel. It will be increasingly difficult to justify this price level to customers as the IT revolution continues. In sharp contrast, PlayBox Technology today has a staff of less than 150 people worldwide and we maintain a 10,500+ channel base. So the ratio of channels-per-head-of-staff is uniquely high in our case. We believe that we have a very scalable business model in hand, with the real growth opportunity still lying ahead.

PlayBox Technology Channel-in-a-Box designs vastly benefit from the TitleBox channel branding and on-screen graphics engine. This can run concurrently on the same platform as the playout server, with the support of many of the key interfaces for graphics management and live data feeds. It is no longer enough to have great content to keep the attention of the viewers. Improving the channel’s presentation with complex graphics, promos, automated “coming up next” items are all crucial parts of the on-air mix. TitleBox quality and efficiency is another reason why many customers have come onboard with PlayBox Technology.

The complexity of having a wide application Channel-in-a-Box platform involves handling not only the multi-codecs and multi-wrapper playout, the branding and the graphics, but also tape ingest, live video feeds, up/down conversion of resolution, frame rate, aspect ratio, several audio and subtitle streams, content validation, etc. Proper handling of the increased number of audio and subtitle streams, when a program has to be re-distributed to multiple regions, is a key element of the unique value proposition of PlayBox Technology.

PlayBox Technology had the right vision and implemented it at the right time. Although many other vendors saw the IT-trend coming, they have delayed in responding, so they now have a lot to catch up on. The hot competition will drive this technology to develop even faster, so customers will surely benefit from the evolution. From the very beginning we have, as a company, shifted from a focus of making money to one of satisfying customers. We enjoy and love our mission and sincerely thank our customers and dealers, whose trust has made our success possible over the last 12 years.