Technology and Consumer Behaviour
Advances in technology and consumer behaviour are driving a transformation in the way video content is delivered to consumers. The change involves a migration away from traditional broadcasting models and platforms towards digital distribution over the Internet to a widening array of connected devices. This fundamental shift is triggering three major disruptions for broadcasters, each calling for the scalability, cost flexibility and agility of cloud computing.
Three Challenges for Broadcasters
This shifting media and entertainment environment brings three major disruptive forces that threaten to overwhelm the legacy technology infrastructures of traditional broadcast companies: consumer demand, pressure to develop new offerings, and cost competition.
Consumers now demand more choices than ever before, requiring far more computing power and flexible infrastructures resources that can accommodate a proliferation of devices and channels. Additionally, new over-the-top (OTT) providers are entering the market that have a digital advantage over traditional broadcasters. This is putting pressure on broadcasters to accelerate the pace by which they bring new solutions to market. Finally, there are greater cost pressures on technology sourcing and operations. Factors including rising prices for content rights, intensifying competition from lower-cost agile entrants and strains on legacy technologies are creating a need to reduce up-front technology investments and align costs more closely with usage and revenues.
Broadcasters that are experiencing these major disruptions are gravitating towards the scale and flexibility of cloud computing.
Changing the Game with Cloud
At its most basic level, cloud computing allows users to obtain computing capabilities through the Internet, regardless of their physical location. There are four distinct advantages in the cloud that makes it ideal as a cornerstone in a digital distribution platform.
1) Faster speed to market – The cloud provides a platform to invent, test and roll out innovation to the marketplace. Through the cloud, broadcasters can more readily roll out new services in weeks or months rather than years. It delivers a service delivery cycle on par with their OTT competitors..
2) Increased scalability – The cloud gives broadcasters the scalability to handle spikes in workload, including live events, and surges in the popularity of new services. With a cloud model, infrastructure availability expands or contracts to handle peak usage requirements, and cloud clients pay only for what they use—much the way that we pay for water, telephone or electricity. In terms of live events delivered online, the capabilities brought by cloud are having a transformational effect on the ability to stream live events
3) Improved Customer Insights – Revenues are tied to engaging customer experiences, particularly ones where the consumer can easily find and choose the content they want on the device of their choice.. With the cloud, broadcasters can collect, store and conduct analytics on vast amounts of data, generating insights to drive personalization, service development, customer experience and one-to-one relationships.
4) Ongoing Service Innovation – Cloud computing is provided as an externally managed service. The ability to instantly obtain access to computing resources through a third party can greatly reduce the need that new entrants have had to build an IT infrastructure in-house. Therefore, cloud computing allows broadcasters to pilot, trial and experiment with different types of services to test their potential to engage consumers and drive revenues, without putting significant investment at risk. If managed correctly, this approach means incumbent broadcasters can emulate the “fail fast” culture of start-ups and accelerate the speed, agility and effectiveness of their service innovation efforts – putting them ahead of the curve relative to their peers.
Predictions for the Future of Cloud in Media and Entertainment
The use of cloud solutions by broadcasters and new startups will progress on several fronts over the next few years. First, the cloud will play an increasingly pivotal role in the delivery of content-rich services to multiple devices, whether on an ad-funded or subscription basis. The cloud will also increasingly be used to analyze customer preferences and add more data capacity during peak workloads.
On the backend, the cloud offers a strong business case for realizing an end-to-end digital supply. The burden of such an integrated workflow was previously hampered by in-house systems operating in silos, huge costs, and high server requirements. The cloud circumvents those obstacles through virtualized resources available on an on-demand basis. This digital supply chain will make it possible to rapidly create and deliver more innovative services to the customer.
Finally, with cloud solutions lowering the barriers to entry, the stage is set for all types of brands, from retailers to consumer goods, to move into video distribution.
Staying agile amidst changes in the media and entertainment industry is a critical element for success. The cloud presents tremendous opportunities for keeping pace and driving high performance.
By Francesco Venturini