Content and the Cloud

How cloud computing will help the broadcast

and entertainment industry innovate, adapt,
and achieve high performance
There is a power shift occurring in broadcast
and entertainment, as consumers now live in
an on-demand world and content producers
are stealing the spotlight from distributors.
New device, delivery, and workflow technologies
offer opportunities for high performance
companies of all sizes to take the lead, and
cloud computing is poised to make an impact
by supporting the next round of breakthroughs.

The transformation currently underway
in the media market is as profound and
impactful as the reinvention of the
music industry by Apple. In that scenar-
io, a nontraditional player leveraged an
innovative platform to drive incredible
change. Apple’s iPod device and iTunes
delivery system set a standard that
captured consumers and completely
altered the business model.
The banking sector in the final decades
of the 20th century stands as another
example. In that industry, electronic
capabilities brought new trading
techniques on the business side, while
ATMs and online access freed consumers
to conduct transactions on their own
schedule. The business model dramati-
cally changed and continues to be
built around that electronic platform.
From a broadcast perspective, similar
changes accelerated by cloud comput-
ing may soon inspire the same type of
disruption and open doors for fierce
competition. The industry faces a
number of intriguing challenges that
can be addressed by cloud technologies:
• Viewers are consuming content
through a wide variety of channels.
Television, PC, mobile, tablet—the
proliferation of devices demands a
more flexible business model that
can recoup revenue from a highly
segmented audience.
• Because of the focus on consumer
access, the digital value chain is being
turned on its head. The power that
used to lie with distributors is now
owned by content producers, further
disrupting the delivery model.
• Adapting to a new environment takes
speed and innovation. Companies need
more computing power to improve
workflow, business analytics and to
input customer feedback into sales
and service cycles.
Cloud computing creates a platform on
which companies of all sizes can com-
pete on storage, distribution of digital
content and computing capacity for
business solutions. In the face of these
new challenges, it enables companies
to apply a new set of dynamics that can
launch them into a leadership position.
Just as important, sitting idle while
others test the technology will leave
companies on the sidelines as competi-
tors capitalize on the tremendous
potential offered by the cloud.

• Technical requirements are changing;

content providers and distributors
alike need scalable IT solutions to
keep pace. With millions of users
demanding an entirely new level of
capacity, current IT infrastructure is
simply not up to the task.
Content and the Cloud 1
 The Power of the Cloud
Figure 1. In-house operation vs. Cloud operation
Customer’s risk & cost
In-house operated platform
Customer’s risk & cost
In-house operated platform
At its most basic level, cloud computing
allows users—from consumers to con-
tent providers to distributors—to obtain
computing capabilities through the
Internet, regardless of their physical
location. Computing clouds are in
essence online, supersized data centers
containing tens of thousands of servers
hosting web applications. Cloud services
from raw infrastructure to complete
business processes can be purchased
through web interfaces and turned on
and off as they are needed.
Cloud computing is still in early stages
but has the potential for rapid, wide-
spread adoption as executives across
all industries begin to understand its
applications. The list of providers is also
growing, with players like Amazon,
2 Content and the Cloud
Cloud operated platform
Cloud operated platform
Google and Microsoft leading the field
and other entrants like salesforce.com
focusing on specific business functions.
Using the cloud, computing resources
can be acquired faster and less expen-
sively than through traditional hardware
procurement. The cloud can scale up
and be put in play in mere minutes,
as opposed to the months it takes to
procure and configure hardware needed
to process peak data loads. The avail-
ability of nearly unlimited infrastructure
resources means that a digital supply
chain can adapt much faster to changes
in demand.
In addition to low cost and ease of
access, a cloud computing platform
improves the customer experience
1 Not just blue-sky thinking: Cloud computing and the digital supply chain, C. David Wolf, Thomas Van de Velde,
Ross Sonnabend, Accenture Point of View, 2009
Software
Operating System, programs
Hardware
Software CPUs, storage, switches, cabling, memory
Operating System, programs
Physical facility
Hardware Electricity, cooling, floor space, security
CPUs, storage, switches, cabling, memory
Physical facility
Electricity, cooling, floor space, security
and workforce productivity; companies
can focus on managing content and
business operations and let the cloud
provider handle hardware maintenance,
upgrades and other issues that
accompany running a data center.
Workflow and analytics solutions
also become more easily managed, as
software and computing power can be
supplied by the cloud, allowing workers
to gain access to enterprise enabling
software anywhere, anytime. This hides
complexity from the customer, shifts
the operational and risk burdens to the
cloud provider and brings significant
infrastructure savings made possible
by scalable utilization of the cloud
(See Figure 1).1
Content and the Cloud 3
 Four reasons that cloud will make an
impact on broadcast & entertainment
The 2009 Accenture Global Content
Study surveyed industry executives who
pointed to a common conclusion: future
revenue growth in the multi-device
world depends on delivering the right
quality and genre of content to the right
consumers over the right platform. This
requires, firstly, deep customer insight to
develop and target offerings across the
relevant delivery channels; and secondly,
the ability to serve those channels at
low marginal cost.2
These two needs can be directly
addressed in the cloud, giving companies
a low cost option to achieve high perfor-
mance goals. With this in mind, there
are four key reasons that broadcast and
entertainment will innovate and grow
with cloud computing.
1. Consumers demand
digital freedom
Consumer need is a clear driver for cloud
adoption. Viewing habits are changing
from month to month, and the delivery
methods are constantly advancing to
keep pace. With new distribution
avenues forming the primary source of
future revenue growth, business leaders
believe the channels most threatened
by change are traditional television,
print and retail (see Figure 2). In
contrast, online portals, streaming,
social media and eCommerce are the
least threatened.3
The assessment reflects tangible trends,
as mobile devices and PCs become more
ingrained in everyday—and everynight—
use. This constant connectivity is a
crucial area of evolution that under-
scores the need for cloud. People are
more and more frequently accessing
content via networks, which translates
2 This time, it’s personal: Engaging and interacting with consumers is the content industry’s new battleground,
the Accenture Global Content Study 2009, Mark Vernocchi, David Wolf, James Scott, Ross Sonnabend. Accenture 2009
3 Ibid
4 Content and the Cloud
Figure 2. Which is the most vulnerable distribution channel used by consumers to
access content? (Choice ranked in top three.)
Traditional TV
Print
Retail
1st choice
into an increase in IP usage that requires
greater hardware access.
In fact, as broadband connectivity at
home becomes a standard for most U.S.
households, consumers are calling for
more flexibility in concurrent viewing
options. People want content available
on multiple platforms and through any
device—watching television in one room,
gaming in another, and listening to
online radio in another demands a
centralized system and an upgrade in
IP-based processing that can only be
efficiently achieved with cloud technology.
2. Businesses need the cloud
physically to accommodate
content demands
Broadcast and entertainment companies
are well aware that consumers are now
calling the shots. With digital demand
that rises and falls in unpredictable
cycles, distribution demands are surpass-
ing realistic hardware capacity. This is
particularly evident in the case of User
Generated Content—especially video—
whose storage requirements dwarf
professionally produced content. At the
52%
43%
40%
2nd choice 3rd choice
same time, the task of reformatting
content, whether from analog to digital
or for a new digital distribution channel,
is a time consuming manual task that
could be automated with the right
amount of on-demand computing power.
Social networking and online events are
yet another area that battles against
bandwidth during processing and band-
width peak usage. Online communities
become active in waves around events
such as Fantasy Sports drafts and
Facebook holiday photo posting or, even
more harrowing, an update in social
network privacy setting options. When
millions of people reconfigure specific
settings in their online community, the
changes touch their many contacts and
the demand for computing power
explodes exponentially.
Cloud computing is uniquely suited to
address these challenges, as its “pay
for use” model allows clients to simply
add or subtract server units from their
account; in times of significant activity
they need only to ramp up their cloud
space to meet demand for computing
power.
Content and the Cloud 5
The business response to consumer
demand is giving rise to a repositioning
of the value chain. A chain that used to
rely on giants of the industry to bring
media from the cinema, to DVDs, to
pay per view is now flipping around to
emphasize on-demand access. Content
providers that can use inexpensive
means to provide viewers with real-time
authorization and high-quality, fast
delivery will ultimately gain the trust
of the user community—and with that
trust, a great deal of leverage to control
market share.
3. Businesses need the cloud
to compete on analytics
In addition to helping with storage
and delivery, cloud computing opens a
gateway to improved business intelli-
gence and workflow. By providing more
computing power as needed, the cloud
enables companies to gather intelli-
gence on the fly and adapt to findings
just as quickly. This application should
earn high consideration from marketing
executives, as according to the 2009
Content Study, over 70 percent of inter-
viewees believe that robust consumer
data capabilities are an enabler of
competitive advantage.4
Such deep customer insight will pave
the way to a higher success rate in
capturing and retaining viewers; tailor-
ing advertising and content is a complex
process made simpler in the cloud.
Customers that can more easily locate
what they want to watch translates into
satisfied viewers who are likely to return
to the distributor, presenting a win-win
situation from the back end all the way
through the viewing screen.
4 This time, it’s personal: Engaging and interacting with consumers is the content industry’s new battleground, the
6 Content and the Cloud
Analytics also play a critical and practi-
cal role in interacting with consumers
in a real-time environment. Ratings and
usage trends provided by consumers
provide immediate direction for the
relationship. For example, online radio
leader Pandora has secured a devoted
following in large part because of its
ability to track user behavior and provide
playlists that closely correlate with
demonstrated musical tastes. This model
is fully dependant on aggregating and
analyzing user feedback, a task that calls
for significant computing power supplied
by the cloud. In a similar vein, Apple’s
Genius feature for iTunes takes a snap-
shot of listener selections and sends
the information to the cloud. The results
return to the listener in the form of a
specialized playlist that reflects the
data. While these applications provide
advanced functionality for listeners,
they also provide the basis for accurate
sales recommendations of songs and
products.
4. Workplace and consumer
innovators are seeking an
accelerant in the clouds
One of the most intriguing benefits
of cloud computing is the incredible
flexibility it offers to players of any size.
Early users will surely center on storage
issues, but this could quickly evolve into
a hybrid model that enables experimen-
tation with limited risk and reduced
time to market. For companies that
are more interested in pioneering new
business strategies, the cloud provides
a platform to invent, test and roll out
innovation to the marketplace.
Accenture Global Content Study 2009, Mark Vernocchi, David Wolf, James Scott, Ross Sonnabend. Accenture 2009
At a minimum, the broadcast and
entertainment industry is ripe for the
move of current workflow applications
to a software as a service (Saas) model,
in which players large and small can
access needed applications via the web
as they need them. In a traditionally
fragmented industry, using a shared
resource is an ideal approach for large
firms that have employees spread across
the country and boutiques that are
working on a limited budget.
Using the additional freedoms opened up
by cloud can also inspire innovation to
create new software suites that provide
competitive advantage. For example,
demands on distributors are exploding
with the development of devices on
which consumers can view content.
Adjusting content to meet widely
varied formatting requirements calls for
tremendous manual labor, but cloud
computing boosts the development of
new applications that can help automate
the process and can be accessed from
any online location. A world of possibility
will be open to companies that capitalize
on technology to complete tasks using a
better, faster and cheaper solution.
Looking to the future, cloud technolo-
gies will provide a forum for established
companies and startups alike to engage
in healthy competition for the “next big
thing.” Remember, Apple was not in the
music business before iTunes.
Content and the Cloud 7
 Taking steps towards cloud computing
Companies are already feeling the pull of
cloud computing, but recognize that an
immediate wholesale shift is unlikely.
Business leaders should take a few steps
to be certain that cloud is the right fit:
Appoint a cloud leadership
team
Driving change across an organization
requires a concerted, coordinated effort
that should be led by a team of both
business and IT leaders. The team should
be fully briefed on the objectives of test-
ing or implementing cloud, the scope of
the process, the benefits expected and
clear deadlines. Once in a position to take
action, communication can be aggressive-
ly pushed to individual stakeholders and
the broader organization to ensure com-
plete buy-in.
Understand the “size of the
prize” and the immediate
priorities
Cloud computing has potential to disrupt
the industry and individual businesses,
both positively and negatively. The team
should develop a position on how the
technology will impact business. From a
strategic standpoint, that means consid-
ering how cloud can create new business
opportunities, new competitive rivalries,
new channels to market and how the
technology can accelerate existing needs.
On the tactics side, companies should
assess where the cost savings will be
gained, how business processes will be
enhanced and how technology will be
streamlined and standardized.
Identify candidate processes
There may be too much change associat-
ed with a move to cloud computing to
contemplate making a wholesale shift.
Companies need to understand which
changes are going to have the most
profound impact and prioritize isolated
initiatives based on business benefits,
5 TV Web Site Opts For Cloud Servers, Information Week, October 30, 2009
8 Content and the Cloud
difficulty of migration and associated
investments. Selecting the right processes
to test in the cloud requires an internal
check to identify non-core processes that
are ripe for technical automation and can
be run in the cloud.
Keeping data private and secure is a key
issue and should be given strong consid-
eration during the selection process.
Protecting assets that are uploaded to the
cloud is the single more pressing concern
for broadcast and entertainment execu-
tives know the consequences of poor
security; lost or pirated content translates
into a significant loss of revenue.
Users must sort out what level of control
they have over assets that enter the
cloud. Some vendors provide reasonable
assurances and use internationally
accepted practices for holding data.
However, organizations should still
engage in “threat modeling” to determine
the real versus perceived risks. For
example, a company that takes on sole
responsibility for protecting assets should
ensure its cloud provider accepts some
level of liability while data is in its control.
Analyze demand cycles
With the business operation identified,
companies can then profile how their
operations change during peaks and
valleys of consumption. For example, the
year-end holiday season may bring more
media distribution demand, providing
an opportunity to expand use of cloud
computing instead of overbuying hard-
ware to service that narrow window.
When putting together a business case,
cloud technology should be able to signif-
icantly improve the operation in terms of
manpower, hardware and ease of use.
Test at peak times
Leaders should tap into the high-demand
period to test a minor operation with a
cloud provider. From a cost perspective,
companies can then extrapolate the
results to gauge the impact on other
systems and active business periods.
For example, the ABC television show
Extreme Makeover, Home Edition, experi-
enced sizable spikes in website visitation
for each of its unique episode pages.
Sites regularly crashed and the bandwidth
required over 100 servers during peak
periods and 50 to 60 updates per day to
prevent prolonged outages. When cloud
computing was implemented, services
automatically scaled to accommodate the
peaks and valleys of demand, eradicating
the need to dedicate significant manpow-
er and energy to future spikes.5
The broadcast and entertainment revolu-
tion shows no signs of slowing—Apple’s
release of the iPad, a Netflix deal with
Nintendo to stream video through home
consoles and the rapid advances of mobile
technology all typify the rapid release of
new options.
Industry shifts that address the rapid
evolutionary pace are already apparent,
as evidenced by the recent inclusion of
Content Delivery Networks (CDNs) by
major cloud providers. CDNs allow for a
faster, front end delivery of high band-
width items such as professionally pro-
duced content. By adding this feature,
companies like Amazon (with CloudFront)
and Microsoft ( with Azure) are improving
their ability to offer their cloud clients the
ability to deliver high quality content
quickly, while delivering content accessed
less frequently in less expensive, large
scale areas of their cloud data centers.
Staying agile amidst these changes is
critical for large or traditional distributors,
while the even playing field provided by
cloud computing presents tremendous
opportunities for young innovators. For
every pocket of the industry and for the
customers it serves, the cloud has the
potential to support a new era of content
and distribution.
Content and the Cloud 9
Copyright © 2010 Accenture About Accenture
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