For Ten, good partners become good friends

IT managers often speak anecdotally about the challenges of scaling up their systems to meet demand, but Damian Smith faced this challenge head on after the exploding popularity of Big Brother sent demand for Network Ten online videos soaring.

Smith, Ten's general manager for digital media, attributes the site's ability to cope with the huge demand to the outsourcing-based approach he embraced after joining the network last year.

A longtime holdout in the online video space, Network Ten finally kicked off its online video offerings in March, during which the broadcaster only served up around 150,000 video streams.

During April, however, 800,000 Big Brother-related hits augmented 225,000 other served videos, putting far greater pressure on the company's ability to deliver. By May, 1.125 million BB related videos alone contributed to a total of 1.5 million videos served.

Such growth would bring out night sweats in most IT executives, since video streams consume large amounts of bandwidth and high video volumes completely change the dynamics of delivering online content.

By shifting responsibility for meeting demand to hosting giant Hostworks, Network Ten was able to let that company's technical experts work out just how they would meet the service level agreements (SLAs) associated with the AU$2.5 million hosting contract the companies signed last October. This agreement let Smith's 25-strong content and IT team keep focusing on their jobs, without having to call an all-hands-on-deck to cope with the sudden surge in BB-related videos.

This outsourcing deal is just one stage in a long philosophical evolution that Smith says was adopted as a cost-containment measure by a financially strapped Network Ten years ago. Now that online content has changed the game considerably in recent years, he says the service's strong performance has more than vindicated that philosophy.

"More and more corporations who aren't technology centric, but for whom tech is an absolutely vital enabler of the business, are going to be thinking of this [outsourcing] as they see benefits from allowing people who specialise in this, to do it very well," Smith told attendees at Microsoft's recent ReMix07 content conference.

Smith is no stranger to the challenges of scale. Formerly the chief executive of onetime Aussie global dot-com success story LookSmart, he found himself scrambling to manage after Microsoft's non-renewal of a key contract caused LookSmart's rapid contraction -- a major change for a company that was once mentioned with the same breathless expectations as a then-nascent Google and search engine market leader AltaVista.

Outsourcing is key
Of all the lessons Smith took with him from that experience, one is particularly relevant to his current role: "We should have specialised more", so the company was less reliant on any single revenue stream. Making this happen in his current job, however, will come not by adding large numbers of specialised staff but through a concerted focus on expanding Network Ten's outsourcing relationships.

This approach fits in with the channel's historical effort to minimise production outlays and rely on independent content producers. In the long term, he said: "Our vision is of a platform based on having literally dozens of different software vendors supplying smart, small pieces of functionality to our end user consumers. This requires that we have people who bring conformity to the table, and who can develop a framework in which hundreds if not thousands of developers can work."

Building this framework will be critical to supporting what is expected to ultimately be more than 50 online content channels. With just 600,000 unique users a month, Smith conceded that the network is far from dominating the streaming video space -- but with that framework in place, he plans to grow the Network Ten online presence considerably but incrementally.

"There's certainly no aspiration of Ten becoming an all-singing, all-dancing technology company," he said. "But in the last few years we've seen a genuine shift in the minimum scale required to build B2B apps; we've tried hard to build a business where the marginal costs of that 600,000 becoming two, three or even four million will be relatively low."

This scalability will come from the ability to quickly add on, and work with, partners over common infrastructure. "We're now in a world where more and more people can work together, and where their technical expertise can be rewarded in ways that traditional media won't be able to do," he added.

"We just need a bedrock level of certainty about having partners we can trust and work with, since we know the alternative to that is doing more for ourselves than we are capable of doing."