Transition to Cloud Picks Up Pace
What is driving media companies to transition to cloud-based video processing and delivery solutions for streaming and broadcast? Of course, a major catalyst is the COVID-19 global health crisis. Video consumption skyrocketed, and when global lockdowns went into effect, the cloud materialized as an exceptionally resilient infrastructure.
The video streaming surge was unprecedented, but the trend in consumption is here to stay. Research shows that global cloud market spending already hit $142 billion.
Cloud-based solutions have demonstrated great resilience in terms of scalability. Consumers watched 44% more videos in Q4 of last year than in the previous year. The number of minutes Americans spent streaming video increased by nearly 75%.
As video streaming usage soars, the cloud gives service providers the capacity, agility, and flexibility to handle massive fluctuations in traffic, without infrastructure expansion. Cloud adoption is set to continue on an impressive growth course. Let’s explore why.
Drivers for Cloud-Based Video Streaming Platforms and Services
1. Pay as You Go
Strategy Analytics found that by 2024, U.S. viewers will spend more time and money on streaming video than pay-TV, setting streaming on a path to be the No. 1 type of media consumption. Legacy pay-TV will account for $74.47 billion in consumer spending in 2024 vs. $76.3 billion for streaming.
Since cloud services are based on a pay-as-you-go business model, it is a natural fit for video streaming. With a cloud infrastructure, you have little to no upfront investment. You only pay for the processing and content delivery network (CDN) resources used. This approach eliminates the need to predetermine expected capacity.
2. Service Continuity & High Availability
Live events can draw massive viewership and require the highest levels of service continuity to avoid outages at the most crucial moments.
The cloud has proven to be incredibly robust for live streaming, thanks to cloud-neutral solutions that can run on any of the major cloud platforms, simultaneously. The cloud also unlocks the power of geo-redundancy, so no matter the size of the event, your service is always up and running.
3. Scalability to Adapt to Shifts in Traffic on the Fly
On-premises infrastructure requires you to pre-estimate the peak usage of your live streaming service, including how much compute and storage you think you’ll need.
With the cloud, you can stream an infinite number of live events and channels to fluctuating numbers of viewers, without pre-estimations. If viewership suddenly skyrockets you can adapt with the agility of cloud-native solutions able to scale in real-time.
Harmonic’s VOS®360 platform currently powers global sports service providers, such as Peacock, Bally’s Regional Sports Network, GolTV, Premier League, and many others to stream live events to millions of viewers, taking advantage of on the fly scaling capabilities powered by cloud technology.
4. Demand for Personalized Content & Targeted Advertising
Research shows that more than 80% of the TV shows people watch on Netflix are discovered through the platform’s recommendation system. Personalized video content is becoming a must-have for both viewers and advertisers.
Service providers are choosing the cloud to deliver their video services because cloud-based video solutions offer a rich feature set to deliver personalized content directly to consumers and across multiple platforms, including social media and free ad-supported TV (FAST) platforms.
You can offer local and regionalized sports, as well as channel variants for different demographic groups, direct to consumers or to affiliates. With little to no additional investment you can create new revenue opportunities with advertisers.
Targeted advertising plays an important role in content personalization and is a multi-billion-dollar market. In the near future, targeted advertising will be the key pillar of the video streaming business model. Without the cloud, targeted ads would not exist. Targeted ads are powered by dynamic ad insertion (DAI) technology, which resides in the cloud, with server-side ad insertion (SSAI).
Leveraging cloud computes technology, machine learning, and AI, you can collect and process an enormous amount of consumer data. Data is key to determining which ad is the best match for an individual viewer and will help you create monetization opportunities.
5. Feature Velocity & Simplified Upgrades
Viewers have an increasing number of streaming platforms and content choices, as more streaming services enter the market. It’s become imperative to differentiate your service and provide engaging content to win eyeballs and keep viewers on screen for longer periods of time. Personalization helps, but it takes more than just customizing content to grow your subscriber base and gain loyalty.
Features that can differentiate your service include UHD channels, multiview and watch together services, just to name a few. Cloud-based solutions not only enable you to test new services and features without fully investing, but you can also simplify your upgrades.
Instead of an entire headend refresh that is costly in terms of resources and equipment, the cloud is software-based. You can easily upgrade your entire service without ever leaving your desk.
6. Reliability with Cloud Streaming Platforms
When the cloud was in the early adoption phase, there were concerns about reliability compared to on-premises broadcast infrastructures.
When you look at the success and reliability of large-scale streaming platforms such as Netflix and Amazon Prime, which operate predominantly on the cloud, it’s clear that the cloud is able to handle the workflow requirements for today’s video streaming market.
7. Savings & Core Business Activities
Cost is always a factor when you are making a video infrastructure investment. Recent comparisons have shown that the expense of operating a video workflow in the cloud vs. on-premises is often equivalent.
With a fully managed cloud service, you’re reducing hardware resources, costs, and maintenance. You can then leverage those gains to invest in your core business, user experience, or other value-added services for your subscribers.
Cloud Technology Is Giving the Video Streaming Industry Room to Grow
We are seeing an unparalleled adoption of cloud-based infrastructure for video streaming. The cloud is empowering video service providers to stream personalized content and monetize their offerings via targeted advertising.
Cloud infrastructure is a dependable architecture for video streaming that increases service providers' efficiencies and enables a simple source to screen delivery. As live video streaming grows, the cloud will scale in real-time to match the demand.
Harmonic’s VOS360 platform, with support for dynamic ad insertion, personalized services such as multiview and watch together, multi-cloud capabilities, and real-time scaling, is enabling outstanding viewing experiences and more sustainable, revenue-driving video streaming offerings for service providers.
Looking for more information about cloud-based solutions for video streaming? Check out Harmonic’s VOS360 platform today or contact a Harmonic team member directly with your questions.