Traditional media companies such as large studios and networks are facing an enormous amount of competition from newcomers to the media business. One such newcomer, Netflix, invested $13 billion last year in creating original content—something like 700 pieces of content for 21 countries around the world, most of it available only over the internet.
So, first and foremost, traditional content providers must find multiple ways to reach consumers and to establish direct connections through their own websites. A channel on cable television or direct-to-home satellite just won’t cut it anymore; it is vital also to get content onto OTT platforms and to social and digital media platforms.
There was a time that media companies could throw a signal up on satellite and tell the world to go downlink that content and take it to air. In this one-size-fits-all model, where everyone accessed the same content, costly satellite capacity wasn’t a major concern. With the recent explosion in the number of possible destinations, as well as in the ways people can consume content, the cost of satellite has become prohibitive. It has become difficult, even impossible, to attract the minimum number of eyeballs needed to make it a worthwhile transport mechanism.
OTT delivery via IP networks, however, overcomes this challenge by enabling the agglomeration of micro markets. While a single market might only contribute 10,000 pairs of eyeballs, the combination of many such markets might yield tens of millions of viewers. In fact, the only way traditional media companies can effectively reach broad audiences and compete with Netflix, Hulu, and other new giants in the market is to leverage the Internet for content distribution. It’s the only ubiquitous public resource that’s available almost anywhere in the world.
In serving many different markets, media companies face a second critical challenge: creating and delivering content that is specific to each of those markets. This means addressing differences in the types and sizes of displays commonly used to consume content. It means accommodating demographic differences and the preferences and requirements of different regions.
Neither of these two drivers—the need to distribute content across numerous destinations and the need to target content for those destinations—for IP-based content delivery is going away any time soon. There really is no choice but to leverage IP networks, and so the question becomes, “How do I do it?”
Anyone who thinks the internet was designed to tally high-value content that requires reliable and timely delivery, is in for a shock. The internet was architected to optimize one or the other, not both. In recent years, however, the shortcomings of the internet for timely media delivery have been addressed by the creation of robust transmission services built on an architecture with attributes uniquely fit to the video transport market. Providing a compelling alternative to satellite, a sophisticated managed IP network offers reliable, timely content delivery while retaining all of the ubiquity advantages of the internet. Best-in-class IP transmission services today can guarantee ultra-low latency, broadcast quality, and incomparable security.
What benefits can media companies realize when they take advantage of IP delivery? For one, they can create as many versions of content as is financially viable. Because each specific version, or strand, can be delivered to the appropriate target audience, companies gain the ability to monetize their content—programming and advertising—uniquely across all variety of platforms, destinations, and devices.
Secondly, beyond more effective monetization, media companies also gain the ability produce or customize content anywhere in the world. Whether all at a single studio, at multiple facilities around the world, or even in public clouds such as Amazon AWS or Microsoft Azure, a company can create or adapt content—load it up with specific ads, specific close captioning, specific graphics, subtitling or whatever it might be—wherever it makes the most financial and operational sense, and then send it on from any site for distribution. With this flexibility, media companies have unprecedented freedom in leveraging their resources to create and deliver content tailored for the target audience.
IP-based content delivery is compelling for a third and very important reason. When working with an IP transmission services provider, media companies needn’t take on infrastructure costs or the expense of managing that infrastructure. They can test content in various markets without risking capital and operating expenditures—millions in infrastructure. Instead, leveraging a scalable and elastic IP network, a media company can freely adjust different components of content creation and delivery to find the most economical and most effective way to produce or adapt content and to deliver it to a receptive market. Thanks to financial flexibility as well as scaled flexibility, a media company can afford to try a particular market and then decide it just isn’t a fit for its content. The company can move on, having paid only on a consumption basis rather than on a sunk cost basis that will need to be amortized over time.
Taken altogether, these benefits ultimately demonstrate that IP transmission services providers can equip media companies to get the widest possible audience and the highest or optimum level of monetization at a variable cost basis.
At this point in the evolution of the media industry, there is no question that media companies must be able to customize and deliver content to fragmented audiences watching on different platforms and devices. It is clear that the one-size-fits-all model dictated by expensive satellite capacity isn’t feasible in this fragmented media marketplace. Moreover, the development of networks and technologies to support IP-based media delivery has advanced significantly, enabling use of the internet to support highly reliable, flexible, and cost-effective distribution and monetization of content across the globe. In the current media landscape, IP-based transport is proving to be a great business decision.