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The Cloud Roadmap: Advancing Innovation in Media Technology

(Image credit: iStock)

Over-the-top (OTT) streaming services are reshaping and underpinning the rapid industry transformation we have seen amass in recent years and accelerate throughout 2020. The shift in consumer viewing habits has led to a spike in the usage of cloud-based OTT services. In fact, according to Parks Associates, 76% of U.S. broadband households subscribed to an OTT video service in Q1 of 2020, with a total churn rate for streaming services at approximately 41%. Compared with traditional pay-tv services, OTT had a higher penetration, with only 62% of 10,000 survey respondents saying they subscribe to a pay-tv service. 

Media and entertainment providers are increasingly adopting cloud technology solutions to experiment with new business models and workflows that can be scaled up or down, with minimal risk, and at low cost. The shift to cloud solutions requires a combination of flexible technology and a deep understanding of the industry supply chain and what solutions elicit success.

COLLABORATION IS KEY FOR CUSTOMIZATION

Today’s audiences want control over their viewing experiences, be it film, television or live events. The opportunities to personalize and increase fan engagement are all possibilities with the power of IP and cloud technology. Traditional workflows don’t offer the same infrastructural flexibility required to deliver dynamic and engaging content experiences that software-centric solutions do.   

This shift from hardware to software solutions will see a greater unity across industry vendors in creating a robust end-to-end ecosystem. The media industry is quickly moving toward a future where cloud-based technologies are part of the core integration. Cloud technology and cloud-based software-as-a-service (SaaS) models are fundamental to bandwidth-efficient, IP-centric offerings and industry collaboration. 

The adoption of cloud solutions can vary significantly—from full-scale operator deployments to smaller-scale event-based pop-ups. In the last few months, we have seen the industry decentralize several traditional business models to speed up the transition to cloud-based workflows in response to the changing demands on businesses because of the pandemic. 

A 2018 survey from Ovum forecasts a surge in cloud uptake from 10% to 34% by 2023, resulting in an even split of deployment models across on-premises, cloud and hybrid. Interestingly, 69% of media enterprises at the time of publication said they preferred on-premise hardware deployment models; however, the prediction is this will drop by more than half to around 33% in 2023. 

THE FUTURE IS IN THE CLOUD

Innovative technology solutions improve workflows and allow almost infinite, dynamic scale to cater to this escalating consumer demand. New, low-risk commercial services are emerging and enabling sports networks to leverage cloud technologies. SaaS models are becoming the most significant investment they will make. This is mainly because SaaS solutions offer enhanced product and service agility while also improving overall product robustness and reducing operational complexities. 

With sports broadcasters now beginning to migrate from satellite to terrestrial IP signal delivery, it is clear that the industry is at a tipping point. Sports broadcasters face starker competition for eyeballs than ever before, in addition to the challenges arisen by the pandemic with the cancellation of live events and the majority of viewership happening from the fan’s home. However, these limitations have driven new creativity and remote working practices. Sports leagues, including the MLB, NHL and NBA, have restarted, and cloud technologies have played a significant role in enabling live coverage to resume. Live sports experiences need to be reliable, accessible and at the highest quality possible, and this is where the power of the cloud is indeed coming into its own. 

CONTENT IS KING, AND CONSUMERS ARE QUEEN

Professional content producers and content owners are looking to adopt smarter, faster and more scalable technologies. Cloud innovation—with its unmatched flexibility, agility and cost saving —is well suited to address these industry challenges and help broadcasters, operators and service providers reach their global audiences. 

Advances in cloud technology have played a vital role in the successful and speedy deployment of new OTT players, including Disney+, Peacock and HBO Max. With an abundance of streaming services at consumers’ disposal, one thing that’s for sure is that content remains king. Satisfying consumer demands is critical to service providers remaining relevant and retaining valuable subscribers.  

We see an increased transition away from traditional media workflows, with content providers looking at ways to monetize their offerings and generate new revenue streams. The industry is adapting, and it has been a long time coming. The future is bright, and the opportunities for collaboration are significant.

INDUSTRY EVOLUTION: CAPEX TO OPEX

The industry is moving away from costly, upfront CAPEX models to flexible and cost-effective pay-as-you-grow OPEX solutions. The transition to cloud-native software-based solutions is all about creating choice for the consumers and enabling flexible workflows. 

As cloud, IP and SaaS solutions continue to move up the organizational agenda, collaboration across the industry supply chain will accelerate. The transformation of the entire media supply chain will evolve rapidly over the next 12 months as advances in and adoption of technology gains momentum. 

Allen Broome is chief technology officer for MediaKind.