Cloud Computing in M&E Industry

Growth of Cloud Computing
 

Per Kevin Newport (2011), the market for cloud services is estimated to grow from $46.6 billion in 2008 to $150.1 in 2013, with an overall compound annual growth rate of 26.5%. Much of the growth represents a transfer of traditional IT services to the new cloud model. At the same time, it also reflects substantial opportunity for creation of new businesses and revenue streams.

Media & Entertainment x Cloud Computing

Due to the mobile and broadband technologies advanced, plus consumers are more demanding than before, Media & Entertainment companies need to focus on the effectiveness of digital supply chains instead of just simply raise prices or sell more advertising to gain profit.

After Cloud Computing launched to the market, there is an increasingly demand of this technology to the Media & Entertainment industry e.g. studios, networks, cable operators, program originators, and distributors are all trying to identify and capitalize on emerging.

Benefit by using Cloud Computing

1. Faster time to market (available to the right consumer anywhere and anytime)

2. Increased sales by increasing exposure to content

3. A richer flow of information to adapt quickly to changing consumer interests and demand

4. Decreased labor cost 
5. Decreased working capital e.g. infrastructure cost and management overhead

Cloud Computing create business value in Media & Entertainment Industry

 

Three Service Models of Cloud Computing vs. Traditional IT

 

How Cloud Computing Changing the Movie Industry 

IBM’s New Centers for Cloud Computing to support the fast-growing M&E Industry

In 24 June, 2008, IBM opened cloud computing centers in South Africa and China so as to allow them to deliver personal and business services from remote, centralized servers that share computing resources and bandwidth to any device, anywhere.

Per IBM’s news, the shift to cloud computing is fueled by the dramatic growth in business collaboration, connected devices, real-time data streams, and Web 2.0 applications such as streaming media and entertainment, social networking and mobile commerce. Cloud computing represents a major step up in computing -- as it enables governments, businesses and individuals to access super-computing power, analysis of massive amounts of data, and applications five to 10-times more cost effectively.

[IBM-New release, 24Jun, 2008]

 

 

(Evolution of media clouds - IBM Corporation, 2010 Cloud Computing for the Media and Entertainment Industry)

  

 

(Media and entertainment cloud use cases- IBM Corporation, 2010 Cloud Computing for the Media and Entertainment Industry)

  

Emerging Cloud Computing Practices

A new way of doing business

By using digital supply chain, media companies can use their core competencies with cloud computing to enhance the supply chain. IBM’s Cloud could help the companies to store, process, distribute and support exposure of content in an elastic fashion. For example, Amazon allows the customer to rent a movie soon after it comes out on DVD. This change has extended to the film industry as well. Film companies used to own all the capital assets needed to make a film including storing media files and transcending them for delivery but now Cloud providers can help to handle this task which helps the companies to be more flexible with costs, stopping expenses when production ends.

Reduced data center footprint and IT resource 

20^th Century Fox also partnership with HP to cloud-enable its supply chain and migrate the traditional IT to the cloud platform. By using Cloud, Fox is able to provide agile, cost-effective services on top of its EMF that is currently used by various business units to manage and distribute its media assets globally. It expects this could help to reduce its data center footprint by 70%, cut traditional compute and storage resources provisioning cycle time from 5 weeks to 15 minutes.

Regaining visibility

Cloud computing makes information wherever and whenever the partners and customer wants which could help better collaboration.

For example, Warner Bros. has streamlined their digital supply chain with cloud-based solution to provide visibility into the critical path of new file releases across international digital physical media supply chains e.g. trailers of movie

Impact of Globalization on M&E Industry

Globalization of Production

Media and Entertainment industry is strongly affected by globalization with the support of cloud computing as it allows the information and services to be delivered all over the world less costly. All people can be easily access the resources without a restriction.

For the entertainment developer / marker, due to the data and information could be transfer freely and less costly via Cloud Computing, it is easier to allocate resource to prepare the production. For example, to produce a movie and distribute all over the world, the production company could send the film to Hong Kong and USA for post-production and consolidated the film together and ask another company that is good at advertisement to arrange the activities that help to launch the movie to other countries, etc. 

Globalization of Market

Today, we can view TV from across the nation. The movie makers can distribute their movie to other nations easier that could help to increase the visibility and noises to the movie that makes it become more attractive for the audiences. Any sharing about the movie could be easily 

distributed by using blogs, social network, etc.

Per the report, the spending on media and entertainment activities in China is stacking up to $109 billion in 2011 which is become the third largest market in the world. Per PricewaterhouseCoopers report, it is expected to grow 12% annually to $192.5 billion by end of 2016. Revenue from online advertising in China is expected to expand 32.1% annually to $31 billion by end of 2016. [Yin Guang, 2012. The China Perspective]

This is huge opportunity for M&E industry to expand its market especially if they are partnering with right channels. Some Apps developers would like to test the market or the App before officially release to the market so as to see if any bugs or concerns that need to be fixed. Thus, with the aid of cloud computing, it is very easy for the developers to gather market information from nations and analysis and establish its market strategies.

[Refer to Week 4 Lecture: Innovation and Managing Innovation under Globalization]

Conclusion

Cloud Computing will play an increasingly and important role in delivery of content-rich services to multiple devices as well as act as a basic to gather customer preferences for analysis in Media and Entertainment. With the benefits of Cloud Computing such as low cost, flexibility, etc. the barrier of entry will be much lower than before which can help to bring more innovative services to customers.

Reference:

Merrill Lynch, 2008. IBM Opens Africa’s First “Cloud Computing” Center, Second Cloud Center in China. Refer to http://www-03.ibm.com/press/us/en/pressrelease/24508.wss

IMDEA Networks Institute, 2014. Refer to http://www.scientificcomputing.com/blogs/2014/08/cloud-computing-last-step-toward-technological-globalization

IBM, 2010. Cloud Computing for the Media and Entertainment Industry http://www-935.ibm.com/services/multimedia/fr_FR_Cloud_Computing_for_Media.pdf