NEEDHAM, Mass.—Worldwide spending on telecommunications and pay TV services will hit $1.591 trillion in 2022, up 1.9% from 2021, according to new forecasts from the International Data Corporation (IDC) Worldwide Semiannual Telecom Services Tracker. 

That forecast is 0.5 percentage points higher than the IDC estimate issued in May, largely because inflationary pressures have forced telecom operators to increase prices. 

This trend, the researchers noted, is a global one with their forecast for the Americas up by 0.3 percentage points, in Asia/Pacific by 0.5 percentage points, and in EMEA by 0.9 percentage points from their May estimate. 

The increase in EMEA comes mostly from Europe, a region that is witnessing higher-than-average inflation while struggling to find a replacement for cheap Russian energy. 

In the Americas, IDC is predicting that telecommunications and pay TV revenue will grow 1.2% from $579 billion in 2021 to $586 billion in 2022. 

The inflationary pressures put “telecom operators in an uncomfortable position," said Kresimir Alic, research director, Worldwide Telecom Services at IDC. "Maintaining healthy margins will require additional rounds of price increases and their ability to carefully balance between the two forces will determine the future development of telco markets in individual countries, regions, and the whole world."

As an industry, we talk a lot about “business continuity” or “disaster recovery.” But what we actually mean is “revenue protection.”

If you are a broadcaster and cannot transmit the commercials you’re contracted to transmit, you cannot invoice for them, and you’ve lost money. For a mid-market station, you might expect to bill around $10,000 dollars for a single commercial break in general programming. Going off air for a break during a live weekend football game might cost $400k or more in lost advertising revenue. This is likely to be a seven-figure sum for a 30-second spot in a major sport event. Can you afford to risk that loss of income?

Outages also affect brand value. You work to ensure a premium viewing experience for your viewers, because going off-air negatively impacts your brand. This has the potential to impact your ratings and market share, as audiences switch to more reliable competitor channels.

Threats to revenue can come from anywhere, and we’re tracking more every day. Natural disasters, human error and now pandemics are all legitimate threats to the bottom line. A new and growing risk now comes in the form of cybercrime. According to Cybersecurity Ventures, global cybercrime costs are set to reach $10.5 trillion a year by 2025. Cybercrooks attack any size business, large or small.

Researcher Sophos says that the average ransomware attack costs the victim $1.85 million. And even if you pay the ransom, typically you typically see only two-thirds of your data restored.

Can your business sustain a seven-figure loss through cybercrime? Very few could. So, along with all the other threats to your business driving us towards increasingly decentralized, remote working architectures, protection against cybercrime must be at the top of the list. It is vital to build the tightest security into everything you do, and the cloud can play a pivotal and practical role in doing just this.    

Availability in the cloud
Broadcast engineers have been brought up with on-premises, hardware solutions. They know from experience and knowledge how to deploy and architect this hardware to achieve the reliability and touchpoint-level control they want. More so, because these legacy systems are isolated both physically and connectedly, content and control security is easy to impose.

It is important to understand, first and foremost, that business continuity in the cloud provides the scrutinizing levels of security you demand. With the right supplier, the cloud delivers the necessary reliability, resilience and security to meet your revenue protection needs.

Let’s talk about playout. For premium channels at least, broadcasters expect very high availability. A channel that is off air is not making money. Engineers have always seen “five nines” ― 99.999% up time ― as a minimum requirement. That sounds like very high availability, but arithmetic tells us that 0.001% equates to about 5 ¼ minutes of dead air a year ― potentially an entire lost break and more.

A cloud provider’s entire business model is to deliver computing services for its clients the instant it’s needed. In broadcast terms this means unimagined availability ― maybe nine nines, or a fraction of a second of downtime a year, assuming, of course, that you have designed a robust solution. And this high availability also comes with value-add features. Routine maintenance, upgrades and replacements are someone else’s job! Someone entirely focused on those tasks.

A broadcaster never needs to check the SMART status of disk drives in servers, or clean the air conditioning, or manage load transfers to allow for software upgrades. The cloud provider will also handle business continuity with geographically diverse server farms, each with multiple power feeds.

Just as broadcasters can leverage the cloud’s effectively infinite scalability to spin up pop-up channels for special events, it can also be used to spin up a disaster recovery channel. The channel remains cost-effectively dormant — not consuming resources — waiting to be initialized should a crisis arise. 

The cloud is also an ideal environment for remote working. Indeed, every connection is a remote connection, even if it is in your machine room, because the storage and processing are somewhere else. Given a reasonable internet connection, your master control operator could be anywhere in the world and still have exactly the same capabilities, response and user experience as if they were on site. A channel controller can monitor and manage playout from home as easily as from the network operations center (NOC).

Despite the common misconception, this also applies to live channels. All the playout requirements — including the unpredictable interventions associated with fitting commercial breaks into live sports programming — can be hosted in the cloud, with operators sitting wherever it’s convenient and safe. 

Outsourcing security
Just as it is the cloud provider’s business to ensure very high availability without intervention from the client, so too is security. With cyberattacks now an all too familiar headline, no broadcaster wants to risk the output due to incursions and ransom demands leading to loss of revenue and brand reputation, as well as the direct and indirect costs of mitigating the attack and the potential loss of critical assets.

This is all part of the broadening of scope in broadcast business continuity and revenue protection. We used to think a disaster recovery system was there in case of fire or flood. Now we have to add to the list pandemics keeping staff at home and cyberattacks robbing you of control of your own assets.

Building your own data security team means recruiting and managing a whole new category of workforce. That is a business and financial overhead you do not need.

But this is part of the core offering of a cloud provider: no business, in any sector, should trust their data and processing if they can’t be sure it’s completely secure. Big cloud providers have a win-win: they can afford to put together the best possible team, and software security experts will want to work for a big cloud provider because that is where the challenges are.

Moving to the cloud requires investment and careful decision-making on the part of the broadcaster. Relying on the right technology partners will help. But get your architecture right and the cloud will deliver processing power and storage that always flexes to your demands, gives you unimagined reliability, and provides data security that’s even good enough for the U.S. Secret Service. As we move to decentralized platforms and remote access, the cloud can comfortably provide the level of service the media industry expects. 

LONDON—The pandemic pushed the media and entertainment into its worst performance since PwC began tracking global revenues in the 1990s, with 2020 seeing a 3.8% decline of about $81 billion in revenue.  

The new edition of PwC’s annual “Global Entertainment and Media Outlook, 2021-25” predicts a 6.5% rebound of revenue in 2021. But the recovery is coming from a lower base and the compound average growth rate (CAGR) growth rate for a six-year period to 2025 will be “a less optimistic picture with a rate of just 3.5%.”

“More than a year into the most globally disruptive event of most consumers’ lifetimes, COVID-19 remains the unavoidable force driving the dynamics of the media and entertainment industry,” the Global Entertainment and Media Outlook, 2021-2015 explained. “Although uncertainty persists due to varied vaccination rates and the risk of resurgent waves of infection from new variants of the disease, we forecast that the combination of vaccines and more developed virus control systems should support a tentative return to normal for most developed nations in the second half of the year.”

The outlook varies, however, by sector. “While sectors like cinema, live music, and trade shows suffered unprecedented setbacks, the persistent growth of digitization softened the blow for the broader industry,” the report noted.

This was particularly good for OTT video and internet access. Globally, about 1.1 billion households had fixed broadband in 2020 and there were an additional 4.6 billion smartphone connections, with total data consumption increasing by 30% during 2020.

In contrast to the whole industry, the new PwC report found that 2020 “was a year of extreme growth for OTT video,” with global revenues growing by more than $12 billion in 2020. 

Total OTT video revenue will be nearly $94 billion by 2025, PWC predicts, a 60% pop in the five-year period beginning in 2021. But PwC sees slower growth in 2021, “due to a combination of a reduction in demand and an exhaustion of the customer conversion pipeline.” Globally, growth in OTT will decrease from 29.4% in 2020 to 13.2% in 2021.

Traditional TV and home video will however 1.2% CAGR decline to 2025, with ongoing declines in TV subscription revenue.

TV advertising also faces challenges, with PwC predicting that “broadcast revenue will not recover to pre-pandemic levels until 2025.” A bright spot is that online ads for TV content and connected TV advertising will grow by $22.6 billion to nearly the same level as multichannel advertising by 2025.  

Meanwhile, total internet access revenues will increase at a 4.9% CAGR to $880 billion in 2025, “as consumer demand and increasingly ubiquitous access drives growth,” the report noted. 

Mobile internet advertising will hit $332.3bn, or 67.9% of total internet advertising revenue by 2025.

LOS GATOS, Calif.—Roku is reaping the benefits of the streaming revolution with major increases in its number of subscribers and total revenue, as made clear by the company’s earnings report for the second quarter of 2019. Among the milestones that Roku hit in this most recent quarter was surpassing 30 million active accounts and exceeding expectations for platform and player revenue, which totaled more than $250 million.

Overall, the total net revenue for the Roku hit $250.1 million in Q2, a 59% year-over-year increase, with platform revenue jumping from $90.3 million a year ago to $167.7 million (86% year-over-year). The gross profit for the most recent quarter came in at $114.2 million, a 47% year-over-year growth.

Roku says that the increase in revenue was primarily driven by its growth in advertising, specifically the company’s monetizing of video ad impressions. Increases in the estimated value of content distribution agreements also helped drive revenue growth.

As a result of the exceeded revenue marks, Roku has raised its entire 2019 outlook to a total net revenue between $1.075-$1.095 billion and a gross profit between $480-$490 million.

Beyond its boom in revenue, reports and also finding that Roku is continuing to grow as a leader of streaming devices. A recent report from Strategy Analytics found that the Roku operating system powers 41 million OTT devices and smart TVs in the U.S., 36% more than the next closest competitor (Sony PlayStation).

More information on Roku’s Q2 results are available here.

LONDON—Online TV episode and movie revenues are expected to reach $83 billion by 2022 according to the Global OTT TV & Video Forecasts Report.

It estimates revenues will double in the next five years, with $9 billion being added in 2017 alone.

The report suggests the U.S. will remain the dominant territory for online TV and video revenues by some distance. But it predicts the U.S. share of the global market will fall from 51 percent in 2016 to 40 percent in 2022.

SVoD will generate half of the OTT revenues by 2022; adding $24 billion in revenues between 2016 and 2022.

Simon Murray, principal analyst at Digital TV Research, said: “OTT revenues will exceed $1 billion in 14 countries by 2022; double the count at end-2017. The top five nations will command two-thirds of global revenues.”

This story originally appeared on TVT's sister publication TVB Europe.