The Media and Entertainment (M&E) industry has undergone a real evolution in recent years, and it has turned to the cloud to meet new demands. The pandemic was a key catalyst for change, ushering in the ascent of Over-The-Top (OTT) platforms as global lockdowns stilted production while simultaneously fanning consumer appetite for newer, fresher content.
Incumbents in the M&E sector have needed to keep pace
Incumbents in the M&E sector have needed to keep pace with these developments in consumer preferences and expectations for more personalised, relevant content. They have also had to expand the delivery of content to digital platforms. Now with social media facilitating the rise of the creator economy, competition has only gotten steeper as more players vie for a slice of the pie.
Unsurprisingly, M&E businesses are turning to the cloud to meet this demand. The industry is showing no signs of slowing down either, with the Asia-Pacific M&E industry alone estimated to hit $150 billion by 2027 – growing at a CAGR of more than 7%. While this should mean success for cloud storage providers here, the reality is that many are missing the mark. M&E players need faster, more secure, more cost-efficient, transparent, and scalable solutions to store an exponentially growing library of data and the ability to leverage resources as their digital needs deem fit. Without recognising these needs, cloud storage providers miss losing out on this multi-billion-sized opportunity in Asia.
Catalysing cloud storage needs
The pandemic has permanently changed consumers’ content consumption habits, disrupting incumbent M&E players’ business models. For one, home-bound consumers, alongside halted blockbuster movie productions, contributed to a 60% increase in the amount of video content watched globally during the pandemic. This surge in content consumption has set the streaming business on a new growth trajectory, with Streaming Video-On-Demand (SVOD) revenues expected to grow at a 10.6% CAGR through 2025, making SVOD a US$81.3billion industry.
The creator economy, an industry that grew by over 165 million people globally, has also emerged as a significant rival to traditional M&E businesses. Enabled by digital platforms and social media, individuals have leveraged their skills, talents, and their personalities to create and distribute content directly to their audiences. An increase in the overall volume of content being generated by these creators forces traditional M&E businesses to adapt and produce more content to compete for audience attention.
With that, there is an urgency for remote collaboration between editors, artists and vendors to ensure maximum efficiency to meet the demand for more content. This mandates access to large high-resolution media files at different geographical locations and distributed teams, resulting in an even heavier reliance on the cloud for data access and egress and ingress to facilitate efficient workflows and expedite time-to-market of media content.
M&E businesses’ storage needs extend
Additionally, M&E businesses’ storage needs extend to ensuring even older archives have long-term and resilient storage. While this has traditionally taken the form of physical, legacy tapes, the exponentially growing size and quality of media today necessitates transitioning to the cloud as a more modern, secure, and disaster-proof alternative. What incentivises businesses further is that tape-to-cloud solutions add to the seamlessness of file transfers. This allows for applications like remastered content, which add new life to old classics.
Propelled by these drivers, a recent survey found that 30% of M&E businesses first turned their eye to the cloud in 2019. After all, the cloud excels at capacity at scale, and no industry has a need quite like M&E, where content is produced at a fast and furious rate at higher resolutions for more types of devices. That all spells bigger and bigger amounts of data for short and long-term storage, and the cloud is where that’s going to happen for M&E. Today, 74% of M&E respondents anticipate that their cloud storage use would increase in the next year – a resounding consensus and indicator of where the industry is putting its focus.
Falling short of expectations
Even still, while data needs are increasing, M&E players find their cloud migration halted by several obstacles. For one, complex fees are a major challenge for M&E organisations globally. In fact, nearly half of M&E businesses’ bills today are not spent on storage – the service they are ostensibly paying for, but on ancillary charges they can’t predict and must abide by. This is especially dangerous for M&E businesses, whose large files are regularly being moved in and out of the cloud, tagged by media asset managers, and even edited from the cloud. All of these operations incur costs from hyperscale clouds and have led to a significant majority of organisations exceeding their planned cloud storage budgets.
On top of the complex fee structures that are resulting in higher API call fees already being a significant obstacle, the reliability of cloud storage has also been a major problem for many M&E players. The same survey earlier found data loss, lack of backup recovery and native security services to be top concerns of M&E players today. In fact, 99% of M&E respondents have experienced cloud storage outages, and 32% of them indicated they have lost data as a result of these outages.
These concerns pose added risks for M&E players that handle vast amounts of sensitive and valuable data, including intellectual property, unreleased content, financial information, and personal data breach. Any breach or unauthorised access to this data could have far-extending consequences such as piracy, financial losses, and legal liabilities. Especially in Asia, M&E players cannot afford to forsake security and data protection, given that the region is one of the most targeted by cyberattacks – Singapore itself experienced 54% increase in ransomware in 2021.
Making the cloud business case clear
It is clear that M&E players have significant growing pains with their cloud storage deployments – overdrawn budgets due to hidden fees, alongside data loss concerns. While most have the right strategy in place with hybrid storage – which provides an even greater measure of flexibility, allowing workloads to be shifted seamlessly across public and private infrastructure – their baseline needs must first be met for the cloud to be optimised truly.
For cloud providers to seize the opportunity in Asia’s M&E sector, considerations can include reconsidering the elimination of additional fees for egress or API operations and ensuring that the budgeting process is simple and predictable month-to-month. Incorporating security/backup options such as immutable storage that protect businesses from data loss, with backups that can be immediately deployed back after a ransomware attack or accidental alteration, will also go a long way.
Maturation of the M&E sector
The maturation of the M&E sector presents an equal opportunity for cloud service providers. As M&E players assess the potential of the cloud, cloud providers that can ensure an effective partnership with the capacity to accelerate the digital transformation journey while also ensuring healthy margins will be the ones to pave the transition forward. Being cloud-native is, after all, the only way ahead.
Related article: Most Asia businesses plan full cloud migration by 2024
By Sunny Chua, Singapore General Manager, Wasabi Technologies