The pressure on media companies is mounting. Rival brands and streaming service providers are not only building out new, high-quality services in the market; they are also heightening consumer expectations around the types of functions and capabilities they have access to and the speed that they are rolled out. However, there is good news for Pay-TV operators and other media companies that need to find faster and more cost-efficient means to evolve their media services – and it comes in the shape of the public cloud.
According to Markets and Markets, cloud-based streaming solutions will increase at a CAGR of 20.9 percent from 2020 to 2025. However, navigating a route to the cloud and understanding the various migration paths, deployment alternatives, and operational approaches is often a multifaceted and complicated undertaking. However, by doing so operators can experiment with and innovate their media services while redefining their interactions with customers, Cloud Service Providers (CSPs), and technology vendors. As a result, media services will become more dynamic, engaging, and operationally efficient.
Consolidation of media components
Pay-TV operators have long embraced ‘quad-play’ and ‘triple-play’ bundles that combine broadband, TV, and cellphone services because of the consumer stickiness they offer. However, media-only services aren’t always as profitable as broadband-only or telephony-only services.
To keep their media units running on a tight operation, Pay-TV operators must develop frictionless relationships between public and their private data centers. The major CSPs have robust on-premises extensions that enable operators to virtualize their on-premises data centers with their chosen CSP partner’s software stack and APIs. This allows applications to be integrated and tested once and then deployed flexibly in a hybrid on-premises/public cloud environment as required.
The challenge for Pay-TV operators in the year ahead will be to maintain customer loyalty, uphold the value of their media businesses and keep operations economically feasible. Migrating a media service to the public cloud and virtualizing its operations is a fundamental strategy to cutting operating costs. This migration is significant for Pay-TV operators who want to move their media services to streaming and multiplatform capabilities. The public cloud enables them to scale a service up and down as required. Even in instances where the public cloud is used for just a few specific functions, leveraging CSP’s on-premises extensions will simplify the process for operators for whenever the time comes to transition fully.
Investing in the public cloud
As cloud migration continues, selling and purchasing behaviors will need to change in parallel to meet the operational needs and changing relationships between operators, CSPs, and media tech vendors. In exchange for lower pricing, operators make spend commitments with CSPs. They can best utilize these commitments by working with technology suppliers to source through the CSP marketplace rather than traditional procurement methods. This allows them to apply their investment in third-party vendor solutions to their CSP spend commitment.
These evolving media economics will change everything about how operators and their technology partners handle the buy/sell relationships. One of the more radical transitions currently underway has been the shift in cloud workflows towards a different approach – ‘managed cloud applications’ (MCA). Sitting somewhere between fully hosted Software-as-a-Service (SaaS) and software subscription models, MCA deployments are a new type of commercial and deployment strategy for cloud-based software. The technology provider distributes and administers the software in the MCA model, but it remains in the customer’s own cloud account. This provides the advantage of utilizing a customer’s preferred CSP provider, which is often chosen as part of a larger organizational transformation, while also taking advantage of existing media agreements and spending commitments with that CSP. This also allows the operator to run their wider multi-vendor end to end ecosystem in one cloud domain, simplifying operations and avoiding inter-domain networking.
A final consideration for all media companies is the ongoing 5G spectrum auction, which will markedly impact the primary distribution of TV contents for how those channels are obtained for retransmission. This is particularly true of the US market and for those TV operators who are retransmitting channel content from programmers that are delivering over C-Band spectrum. This content will increasingly come from IP, and cloud-based sources rather than satellite feeds in the future. Mobile carriers will be pitching for more 5G spectrum at the upcoming World Radiocommunication Conference (WRC) in 2023 which may have similar consequences across the rest of the world.
The evolution of public cloud streaming
While public cloud migration has been in progress for some time, the pace of change with which more media companies embrace their migration will accelerate considerably in 2022. TV providers must respond to the competitive challenges of this rich and complex media landscape, and the public cloud offers a safe bet to achieve this. They must now ask themselves how quickly they migrate and what migration methodology they adopt based on their business and operational strategy. Leveraging new deployment models and working in tandem with cloud experts TV operators can strengthen their ties with CSPs while streamlining the day-to-day operations of their media divisions. Through greater advocacy of cloud adoption Pay-TV operators will build inherent flexibility to their operations and enhanced viewing experiences for their consumers.
