Fully Capturing VOD Opportunity Requires the Cloud
A Thriving Market Still with Room to Grow
It is no secret that video on demand (VOD) services are a hot topic in the video market, and have been for a while. While most are familiar with the subscription business model from the likes of Amazon Video or Netflix—which raked in US$6 billion in revenues in 2015—there are three other significant markets in which VOD plays a role: Pay TV Operator VOD, pay per view (PPV) and rental content, and digital purchase. Combined, these markets are expected to grow to US$100 billion in 2021. With this kind of growth, obvious strain is put on existing infrastructure (networks, video processing, etc.) to not only keep up with climbing demand but also to deliver increasingly performance-demanding content with a high quality of service. This is where the Cloud comes into play, offering near-instant scalability, faster platform and feature roll-outs, and reduced CapEx and OpEx requirements. Players such as Amazon Web Services (after the acquisition of Elemental) and Harmonic are positioned favorably as these transitions continue.
Exciting Potential, Some Assembly Required
Video is nothing if not a quickly changing and complex content market. Bumps in resolution, currently in progress toward 4K, present challenges not only in larger files sizes and greater network requirements but also partnering technologies; in the case of 4K, new DRM schemes, and codecs, along with greater bitrate requirements, force adaptation for a system to handle it. Distribution ecosystems have been changing equally quickly, with both business and consumer supply chains shifting to utilize cloud capabilities. Workflow optimization, with single asset transferal and centralized storage, improves publication times and allows more granular control over delivery to meet customer requirements.
More on the Horizon
A swath of new OTT services hitting the market highlights this ongoing, cloud-centric necessity, while video delivery continues to grow in complexity with no hint of simplifying. 4K is closest on the horizon, bringing along high dynamic range (HDR) color specifications; 360-degree video is the next step, set to contend with another set of new specifications, device support, and network requirements. Existing media companies have been making strides to stay ahead through acquisition and/or internal investment, prioritizing strong Cloud presence and potential, with new competitors focused on the Cloud from the start.
ABI Research dives deeper into this topic, with more information on workflow shifts, service requirements, and company highlights, in our whitepaper, Cloud is the Right Fit: Capturing the Immense VOD Opportunity.