What will happen to the media cloud services market in 2019?

There’s a perfect storm brewing. Numerous forecasts point toward the rapid growth of video, driven by demand for video over mobile often in tandem with breathless predictions for the rollout of 5G, the next generation wireless broadband. The choice for media companies is to build the physical infrastructure to cope, or go to the cloud.

Cloud services market 2019
Cloud services market 2019

Cisco’s latest Video Networking Index, for example, suggests video will make up 82% of all IP traffic in just three years’ time. Ericsson’s recent Mobility Report predicts mobile video will grow 35% annually through 2024 to comprise 60% of all mobile data.

Equally important is that viewers no longer distinguish between content accessible by TV or OTT regardless of screen. With more video traversing online networks than ever before, viewer expectations of quality is set to become as much a major headache for service providers and content providers as the relevance of personalized content and individual user experiences.

There’s money to be made if media organisations and service providers can capitalise on this clear trend, but to do so they need to rip and replace their approach (let alone the hardware) to production and delivery infrastructure.

Put simply, traditional approaches to video processing and delivery cannot keep pace with the changing nature of video consumption and the rising expectations that flow from it.

The new digital methodology requires retooling infrastructure, business models and, importantly, internal engineering culture for the more operationally agile software-first environment of the cloud.

Playout may have evolved less quickly to the cloud than other areas of the business, since channels requirements are more predictable over longer periods than the bursty nature of processes like postproduction.

What broadcasters want is the ability to launch new channels quickly – such as a temporary channel around a quadrennial sports event - and to adapt services for existing ones to target different audiences or regions for a short period of time.

That isn’t possible with a traditional playout model reliant on single-purpose machines which need purchasing and installing many months in advance.

The functions for channel deployment from video servers to compliance recorders have been discrete appliances taking up (heating, cooling, real estate) space in racks. These tools are being re-tuned by vendors across the piece to work on commodity storage and compute systems using standard IP/IT protocols to interoperate with each other at a micro-services level.

As more and more elements of the chain from automation to graphics, logo insertion and transcoding become virtualized, the potential for pop-up or localized or trial channels and even just-in-time broadcasting come closer to being realised.

The trick – and it’s by no means an easy feat – is to bring broadcast-grade capabilities into the cloud at a rental or pay-as-you-go price with no upfront expenditure. A successful transition will enable video providers to tap into a number of opportunities to improve the performance, efficiency, and costs of their video workflows.

In this context we need to see the Rohde & Schwarz acquisition of Pixel Power. Its software-based IP solutions enable dynamic content to be delivered more efficiently for linear TV, mobile, online and OTT/VOD. Its solutions are virtualizable for either private or public cloud and deliver on the new OPEX business models which are core to the broadcast technology transformation.

A perfect solution for a perfect storm? The market will decide.

Posted by Adrian Pennington, technology journalist. December 13, 2018.

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