Real Cost of Physical Media Distribution

Proprietary and Confidential

File-Based Content Distribution Management Has Immediate ROIThe Real Cost of Physical Media Shipments

| Proprietary and Confidential©2010 Signiant Inc

Physical Media Distribution

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Physical Media

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Physical Media Capacity (minutes) Cost $/Minute

Film 9 minutes $450 $50.00

Video Tape HD (HDCAM SR) 33 minutes $100 $ 3.03

Video Tape SD (Digi Beta) 33 minutes $20 $ 0.61

DVD 120 minutes SD (4.7GB) $10 $ 0.08

DVD Blue Ray 120 minutes HD (25 GB) $20 $ 0.17

Hard Drive 4800 minutes HD (1TB) $100 $ 0.02

Solid State Memory 300 minutes HD (64 GB) $150 $ 0.50


Physical Media

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DVD 120 minutes SD (4.7GB) $10 $ 0.08





Physical Media

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DVD 120 minutes SD (4.7GB) $10 $ 0.08





Physical Media

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DVD 120 minutes SD (4.7GB) $10 $ 0.08





Why Physical Media? Why Not?

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Why?

•Price

•Portability

•Installed Infrastructure

•“The Standard”

Why Not?

•Physically shipped

-Time

-Cost

•Labor Intensive

•Price

•Security


• Cons–Failure (mechanical)–Security – theft – large capacity–Wasted Capacity

• Pros–Large Capacity – Low Cost–Data Managed with IT Policies (security, backup, etc)–Ideal for Transmission of Files over Networks from Disk-to-Disk

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Hard Disk?


Day in the Life of a “Dub”

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1. Duplication

$75

$50

$50

$25



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1. Duplication

2. Pack Ship$75

$50

$50

$25



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1. Duplication

2. Pack / Ship

3. Track / Deliver$75

$50

$50

$25



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1. Duplication

2. Pack / Ship

3. Track / Deliver

4. Ingest

$75

$50

$50

$25


Summary of Cost

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•International Shipments Can Be Substantially More

•“Bad Dubs” Can Result in Missed Deadlines and up to $700 in replacement cost

•Shipping tapes or Disks has hard costs

Total Hard Cost to Ship Tape or Disk

Duplication $75

Shipping $50

Tracking / Deliver $25

Ingest $50

Total ~$200

Range $100-500


Solution: Content Distribution Management

• Files are Moved Over Networks–Low Cost of Media - hard drive – remember $0.02/min –Low Cost of Labor – files move and are tracked automatically–Can Be Faster Than Shipping

• Perceived Barriers?–Cost of Bandwidth–Network Latency–Cost for Content Distribution Management Solution – ROI

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Theoretical Times to Transmit 1 Hour of Content

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Network speed

CD 1.5Mb/s

DVD 5Mb/s

MPEG2 50Mb/s

Std Def 270Mb/s

High def 1.2Gb/s

128Kb/s 12 hrs 39 hrs 16 days 88 days 13 mth1.5Mb/s 1 hour 3 hrs 33 hrs 8 days 33 days10Mb/s 9 min 30 min 5 hrs 27 hrs 5 days

100Mb/s 1 min 3 mins 30 min 2hr42m 12 hrs

400Mb/s 14 sec 45 sec 8 min 40 min 3 hrs

1Gb/s 5 sec 18 sec 3 mins 16 min 72 min



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Network speed

CD 1.5Mb/s

DVD 5Mb/s

MPEG2 50Mb/s

Std Def 270Mb/s

High def 1.2Gb/s







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Network speed

CD 1.5Mb/s

DVD 5Mb/s

MPEG2 50Mb/s

Std Def 270Mb/s

High def 1.2Gb/s





• What about latency? LA NY



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Network speed

CD 1.5Mb/s

DVD 5Mb/s

MPEG2 50Mb/s

Std Def 270Mb/s

High def 1.2Gb/s








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Network speed

CD 1.5Mb/s

DVD 5Mb/s

MPEG2 50Mb/s

Std Def 270Mb/s

High def 1.2Gb/s






• With Signiant?



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Network speed

CD 1.5Mb/s

DVD 5Mb/s

MPEG2 50Mb/s

Std Def 270Mb/s

High def 1.2Gb/s






• With Signiant?


Cost of Internet Bandwidth

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Network speed Price / Month

Theoretical Data

Transferred (TB) / Month $/TB

1.5Mb/s (T1) $ 300 0.5 $ 597 10Mb/s

$ 1,500 3.3 $ 448 45Mb/s (DS3)

$ 5,000 15.1 $ 332 100Mb/s

$ 7,500 33.5 $ 224 155Mb/s (OC3)

$ 10,000 51.9 $ 193 1Gb/s $ 25,000 334.8 $ 75


Measuring ROI

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Example 1:120,000 Tapes Annually: 100 Locations

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•4 Month Payback Period


Example 2:12,000 Tapes Annually: 20 Locations

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•7 Month Payback Period


Example 3: Company Owned Trucks

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Marginal Cost Savings Physical Media Shipment

Tapes Shipped Per Month between 2 locations

16,000

Truck Trips / Month 16

Cost Per Month Trucks $44,000

Cost Per Month Tapes $240,000

Total Cost Per Month $284,000

Investment: Content Distribution Management

Bandwidth (155Mb/s x2)

$20,000/ Month

Hardware $12,000

Software / Maintenance Yr1

$100,000

Implementation $50,000

Total Fixed Investment $162,000

Payback Period

Marginal Cost Savings Monthly – Physical Media Shipments

$284,000

Increment Month Expenses Bandwidth

$20,000

Monthly Savings $264,000

Fixed Investment $162,000

Payback Period 0.6 Months


Example 4: Tape Infrastructure Replacement Cost

• Aging Tape Infrastructure Requires Maintenance

• Professional Tape Machine Maintenance = $20K / Machine

• Company had 100 Machines or a $2M Expenditure

• Implementation of Content Distribution was less than $500k or ¼ Machine Maintenance cost PLUS Marginal Cost Savings of Moving Files vs. Tape

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Environmental Life Cycle of a Tape

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•Production of the plastic and metal tape - energy, pollution, waste material

•Assembly and packaging - energy, packaging waste

•Shipping to the warehouse - energy in the form of fuel for boats, planes and trucks

•Distribution to the end user - energy in the form of fuel for boats, planes and trucks

•Duplication - energy to run tape machines, pollution in the form of heavy metal due to tape heads running across metal oxide tape

•Shipping - energy in the form of fuel for boats, planes and trucks, more packaging waste

•Ingest - energy to run tape machines, pollution in the form of heavy metal due to tape heads running across metal oxide tape

•Disposal - thrown in a landfill at the end of its useful life

Imagine – multiplied by 130,000

World’s Tallest Building

130,000 Tapes 4X as tall


International Value Added Tax

• VAT on Digi BetaCam Tape–20% x $20 tape cost = $4

• VAT on “Intellectual Content”–20% x Revenue Stream Generated by Content on Tape

–20% x $100,000 = $20,000

• This is the difference between making and losing money on international distribution of content

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Time to Market

• Time to deliver a Tape is 24-48 hours–From Dub to Ingest

• Time to deliver a File is Minutes to Hours ~ 5 Hrs

• Delays cost real money:–Syndication = lost revenue – statistics show that the longer it takes to offer content from original air date – the less revenue captured

–Production = increased cost – delays in the production / post production process increase the costs to product content

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Conclusion

• Physical Media Shipment is –Deeply Entrenched–Business As Usual–Continued Use Will Actually Make You Less Responsive and Less Competitive

• Moving to File-Based Distribution offers–Faster Delivery Time–Lower Overall and Labor Cost–Immediate ROI

• Every Month You Wait is Wasted Dollars

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| Proprietary and Confidential©2010 Signiant Inc 31

For More Information Go To:www.signiant.com/tapewhitepaper

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Real Cost of Physical Media Distribution