Why Cloud or Why not Cloud? Is cloud the solution? The thought increasingly passes whenever there is a debate how to mitigate a challenge imposed by infrastructure, global reach, faster deployment, expanding customer base and others. Cloud represents a new business model as well as a revolution embarked as version 2.0 for platform and services. A recent study by Gartner forecasts cloud services market to grow from $68B in 2010 to $149B in 2014. Looking back, the last decade oversaw computing and connectivity becoming mobile removing location barriers and now cloud computing is extending the same for platform and services
Cloud Services – Media as the focus
Consumption of digital media is undergoing a major shift – storage is moving from a local-only environment to virtually hosted one, proliferation of network-connected devices is driving multiplatform access across the media chain – TV Everywhere and trends in social networking are influencing consumer opinion while also converging as mega platforms for digital media distribution and consumption. With the amount of content already available online and growing, Internet is by-far the principle TV platform of the future. Consumer behavior towards content consumption had a major change when DVR got introduced breaking time dependency, now the field is getting set to break location and device dependency with cloud based content services enabling consumers to realize true anywhere, anytime, any device content availability. There are several industry initiatives like Disney KeyChest and DECE (Digital Entertainment Content Ecosystem) for cloud-based VOD which are gaining ground. As we discussed in Part I , cloud media services has been centered around four main themes Data syncing services, Video and Music VOD, Content Backup and Applications. Let us extend the discussion further to view Opportunities, trends and challenges in this domain
Cloud Media Services – Opportunities
Role of Cloud in Media Services
Cloud technology offers an ecosystem which enables ubiquitous access to content, data and applications as part of an integrated, secure experience. It seeks to resolve device dependency problems like purchased content tied to a device for consumption or loss of content in event of device failure. Cloud represents as a remote virtual locker offering a number of clear advantages for consumers like ubiquity and lower cost of content ownership. Similarly cloud technology delivers real value for service providers through faster deployment times, managed data storage, lower operational and capital costs, additional channels for revenue, higher customer connect and increase portfolio of offerings. Cloud model has dramatic impact across several aspects of content journey –creation, editing, storage, transcoding, distribution, and payment collection and performance measurement. Some key benefits and opportunities include
Cost Effective: Cloud technology offers efficiency and reduced total cost of ownership (TCO) for service providers through efficient service multiplexing (video, voice, data, and mobility), common infrastructure, server utilization, data center optimization (IaaS, PaaS, SaaS, etc.), virtualization, and automation among others.
Always On and Up to date: Cloud offers an “Always On” connected ecosystem which takes care of data, software updates, security patches without manual interference. Faster start up time – minimal downloads; better version control and reduced issue resolution time are other key benefits. Connected TV platform with cloud based service seeks to offer always updated applications and streaming content access instead of local storage and download
Backup: Cloud offers an extended and reliable source of secondary backup in case of system crash expanding the realm of disaster recovery and virtual re-production.
The 3C’s – Control, Convenience and Consistency: Cloud offers convenience of anywhere any device access while in home or on the move (In Vehicle Infotainment is another emerging dimension). Automated and effortless syncing services enable syncing of data (photos, documents, e-mail, calendar, music library, video etc.) offering users option to purchase and store commercial content in their digital lockers to sync with all of their personal devices. It provides consumers offline access experience with download options assuring a consistent subscriber experience over multiple endpoints. Feature to push and share specific content with friends and family is another unique feature popularized by service providers.
Drives Application Usage and Content Consumption: Increased convenience with round the clock access across connected devices is driving higher demand and consumption among users opening newer and increased ARPU options
Lifestyle Enabler- Affordable wireless broadband connectivity and rich features in smartphones and tablets supported through cloud has brought in lifestyle platforms enabling users to manage both their professional, private, and social lives while in Office, home or on the go.
Border-less Expansion: There are increased avenues for additional value added services like video calling etc. in conjunction with new monetization models like download to own, rent, and free advertisement-supported content harnessing higher value for content. With border-less reach new generation content aggregators are emerging as global players (seeking new markets and business partnerships) of Pay TV content serving large online user base beyond their traditional territories sharing content over the web saving time, cost and logistical efforts.
Opportunities – Cloud Media Services
Ubiquity: Ability to buy content once and access it whenever, without worrying about device content bindings completes the sense of ownership and value for money for end consumer. It has enabled users to take their own, personalized TV experience with them, wherever they go, on whichever screen they choose by providing a customized streaming and download experience on un-managed devices. For premium content, cloud offers ability to access content in the format customized for the needs of target device
Cloud Media Services – Emerging trends
Migration of content from local storage and access to cloud-based consumption is changing the distribution models for existing players and creating new opportunities in network and back end infrastructure, content protection and delivery models. Cloud brings benefit of removing device ◄► content dependency and storage challenges (physical) while enabling access for connected devices e.g. smart phone, tablets, e-book readers, connected picture frames, connected TVs, in vehicle infotainment (IVI) systems among others. Some emerging trends include
Cloud Gaming:An interesting concept to enable playing games on multiple connected devices harnessing cloud based distributed processing power. It leverages unused processor time to do all the heavy processing and streams the resulting in-game action over the Internet enabling running resource hogging games even on low end devices.
Network DVR –Boasted with Cablevision legal success early this year which treats network DVR (nDVR) essentially the same as a customer owned DVR in the sky (content storage at head-end instead of consumer’s homes) a significant momentum is seen across service providers (Comcast starting trials for nDVR) to enable multi-screen delivery services. Network DVR with multi-screen access brings control and personalization for consumers and tremendous opportunity for operators to increase the value of bundled TV services with the advantage of retaining the video content within the walled gardens of their paid ecosystem accessible through authentication.
Multi-screen Experience: Cloud is ideally suited to meet the evolving, multi-screen expectations of today’s content consumers. Consumers can access the cloud for live, on-demand and real-time content transcoding to allow delivery to multiple devices while supporting wide variety of video and audio codecs, aspect ratios, and screen sizes.
Emerging Trends – Cloud Media Services
Emerging Industry Standards:Popularity of an industry wide initiate named “UltraViolet” – UV (DECE) with all major studios as participating members is working to streamline standard and compliance to enable a wide variety of platforms to access cloud media and aims to broaden industry acceptance and consumer adoption. The key principle is tied to a proposition whereby a consumer buying the physical copy of a movie (say Blu-ray), is also privileged with a digital copy that is hosted and is available for different types of UV certified connected consumer devices.
Expanding reach for Service Providers: Cloud based OTT is an exciting opportunity for Pay TV operators to expand customer base across geographic limits beyond their physical networks offering content through worldwide CDN footprint (in partnership with local vendors)in a more cost-efficient, upgradeable and scalable model. Cloud brings an alternative strategy to limit the size of in-network VOD systems (servers) and uses CDN to deliver the long-tail on-demand content instead. Cloud offers means to establish direct one-to-one relationship between the head-end and the receiver device every time content is requested, enabling faster remedy against security breaches and performance issues.
Maturity in Service Models:Service providers and networks still hold content, have delivery platforms with strong relationship with studios and unparalleled presence in consumer homes. With pure play OTT providers impending threat, service providers are re-inventing newer subscription and service offerings like skyplayer, iPlayer, Xfinity Verizon FiOS etc. enabling consumers to access on demand content delivery across devices at home and on the move in recognition of their service subscription. There is also a movement to shift modes of distribution from managed video services (DVB, ATSC etc.) to managed IP video services with gradual migration to all connected (IP) and over-the-top distribution.
Cloud Authentication Services:Authenticating services like Adobe Pass are bringing TV everywhere closer by offering single-sign-in access to content from a variety of content portals , cable and satellite television service providers for generic and premium content for hassle-free anytime, anywhere access
Extended Life of Content Ownership: Consumers are experiencing a psychological change when moving away from physical ownership of content to virtual access. As cloud based services enter mainstream and consumer gain trust that their purchased content is accessible across existing and newer devices, it will bring more confidence and acceptability. A change where consumer is not limited by the physical state in which content resides (VHS, CD, DVD, Blu-ray etc.) but has the advantage of owning the privileges to consume content as new technologies evolve or existing once become obsolete.
Challenges with Cloud Media Service
Two most significant challenges for cloud based media services are attributed to quality of services and content security for delivery and consumption of content
Quality of Service (QOS): Broadband speeds have increased significantly in last few years and new streaming technology (Adaptive Bit Rate streaming) hold lot of promise but there are still concerns for ensuring consistent quality of service (QoS) from unreliable network environments, and over long distances for majority of consumers.
Data Security and secure Access: Recent past has seen numerous instances of inadvertent leaks, security breaches and with cloud the risk become multi fold – remember Dropbox messes access control. Content has a commercial value and it holds IP and stakeholders have deeper concern when content it is not hosted or stored on their own servers. With new services providing flexibility to transfer content directly to the cloud at the source of creation itself subscribers are demanding still further level of trust and security from their service providers
Support for Offline Model:Since cloud service and delivery model is based on connected ecosystem, numerous use cases under offline mode are emerging which need to be dealt with care and to prevent access issues, data inconsistencies or accidental data loss.
Challenges – Cloud Media Services
Gross Fragmentation: In absence of universal standard there exists large number of proprietary implementations in the industry which increases the risk under circumstance of a cloud provider going out of business. In addition most of the available services today are tightly coupled within a set framework of devices and platforms e.g. Zune will work with Windows Phone 7 and Xbox, iCloud is exclusive to iOS and Mac customers, Google music beta has Android-only supporting MP3, AAC, WMA and FLAC files with no support for M4P (Apple DRM) and M4A (Apple Lossless). Since content should not be tied to a device or vendor created ecosystem, these newly created boundaries pose challenges for user acceptance
Legal Complications: Cloud media services are still new and legal compliance and liabilities are still something which has not hardened (fate of uploading pirated albums). There are further legal complications around location of content storage (e.g. servers outside the country), restrictions on content rights for multiple platforms and distribution beyond a boundary..
Clutter Confusion and Competition– With number of cloud based service launches both free and paid from TV manufacturers, mobile companies, service providers, social networks and content aggregators; there is a growing confusion and indecisiveness among consumers.
Lack of Standard and Migration Challenges – As new cloud services flourish customers will want freedom to move among the clouds based on the service plans and features offered (even mix private (local) clouds with public once). Customers will need freedom to switch providers as their computing needs diminish or expand, and the ability to move data, content and applications as their business requirements change. In current scenario each vendor is building and popularizing their own closed cloud based ecosystem based on a propriety platform stack, run-time environment and security features. In future this is bound to create obstacles for migration and interoperability.
Cloud market for content is huge and mostly untapped with consumer facing cloud based content services still in their early stages. There is a growing number of new service launches across the spectrum of players (Cable MSOs, aggregators service providers, studios and content retailers) with backing and focused role from all major technology giants (including Google, Apple, Microsoft and Amazon). In short with no major technology and service player wanting to be left behind, cloud based content services is getting set for greater innovation, exciting offerings, consolidation and higher competition which is set to benefit the end customer in days to come!