During the COVID-19 pandemic, media and entertainment (M&E) organizations accelerated their need to undertake a digital transformation. As we approach a post-pandemic world, M&E companies are realizing that their digital transformation is no longer just a short-term solution, but rather, it is a long-term necessity to survive the increasingly competitive and saturated landscape of content distribution and consumption. Cloud service providers play a crucial role to M&E brands as they continue their digital evolution. Throughout the pandemic, cloud solutions allowed M&E companies to adapt efficiently and effectively. Beyond the landscape of COVID-19, a cloud-based framework will continue to facilitate agility and scalability in the M&E business model.
How COVID-19 Impacted the Media and Entertainment Industry
When COVID-19 created an unprecedented environment and altered our daily operations, people and businesses had to rapidly adjust to the new circumstances. In particular, the M&E industry faced a reckoning that was imminent before the pandemic and became more acute during the pandemic.
For M&E businesses, COVID-19 forced upon them an important pivotal point in their digital strategy. The pandemic didn’t present vastly new challenges for M&E organizations, it simply accelerated and highlighted the problems they had already begun experiencing in the last five or so years. Viewer behavior is one of the biggest shake-ups in the M&E industry. Prior to 2020, audiences were already hunting for new ways to consume content. Traditional linear broadcast was waning and modern digital streaming services were booming. Media content consumption was drastically changing, as audiences streamed content on different devices, such as their smartphones, tablets, connected TVs, PCs, and gaming consoles. Now, legacy M&E brands are no longer competing just against nimble new players in the streaming space, but they are also competing against music, gaming, and esport platforms. All of these trends that were in motion pre-pandemic became more apparent after society began sheltering-in-place.
With most of the United States going remote, industry giants, like Warner Brothers and Disney, pivoted their focus to streaming content to adjust to shelter-in-place orders. In an unprecedented move, Warner Brothers began releasing new movies in theaters and via streaming platforms simultaneously. Disney’s emphasis on its streaming service, Disney Plus, paid off: it exploded during quarantine and quickly accumulated 100 million subscribers. Additionally, Disney also followed a similar cinema distribution model to Warner Brothers by releasing new hits via streaming rather than just in theaters.
The need for digital innovation was crucial for the M&E industry to adapt to the new circumstances created by the pandemic, and this need will continue long into the post-COVID world. M&E organizations faced a catalyst in their structural transformation, and the digitization of content workflows and distribution became absolutely imperative as employees went remote and content consumption hit an all-time high. Moreover, certain market trends were felt more acutely during the pandemic and represented a paradigmatic shift for the M&E industry. These trends include the rise of direct-to-consumer, content wars via mergers and acquisitions, and wavering audience loyalty. Change is ever-present, and the consequences of not adapting to the modern world became obvious and unavoidable in the face of the pandemic. Ultimately, M&E incumbents who are slow to modernize their technology, production, and monetization strategies will be left behind by more agile competitors
How M&E Companies Can Use the Cloud to Innovate
As we return “back to normal,” we’ll see how the pandemic affected our societal structures temporarily and permanently. The M&E industry was particularly changed in an irrevocable manner: a new age of media has been fully realized, and M&E businesses will have to rethink their business models as a result. How the pandemic will continue to evolve from here is still unknown, but it is clear that media organizations will have to continue to innovate in order to keep up with the changes in working patterns and audience behavior.
To adapt to the accelerated changes driven by COVID-19, the modern media supply chain will require agility, flexibility, and scalability. Cloud solutions (such as Microsoft Azure, Amazon Web Services, and Google Cloud Platform) are the key enabler for M&E companies as they look to innovate. According to a Gartner report on digital transformation in media and entertainment, 80% of broadcasters and content creators migrated all or part of their operations to public cloud platforms as an urgent response to effects of quarantine in 2020. By switching to cloud-based infrastructures, M&E companies were able to collaborate and create remotely, better understand real-time audience behavior, and maintain a secure environment while supporting media production, storage, processing, and distribution requirements.
There is no one-size-fits-all cloud strategy, as it is dependent on the business. Some companies opt for a single cloud provider, while others choose a multi cloud strategy. A hybrid cloud solution is also an option, which utilizes data centers in conjunction with cloud service providers. Regardless of a company’s cloud strategy, the benefits of migrating to the cloud remain the same. Below we’ll dive into a couple of the pros of utilizing the cloud for morderning workflows, supply chains, and data analyses.
With a cloud platform, teams can now collaborate remotely and globally, which ultimately leads to greater productivity and efficiency in content creation. When it comes to media production, whether it is live or pre-filmed, massive teams of professionals are needed to make the vision come alive (editors, visual effects artists, production professionals, etc.) COVID-19 demonstrated that teams using cloud service providers could still work collaboratively and effectively in a remote environment. In fact, businesses realized that requiring teams to come on-site for content production can be more time consuming and costly than working remotely. Virtual post-production is a great example of how the cloud is more economical from a financial and time sense. Using a modern cloud infrastructure, M&E brands can create virtual workstations, which replaces physical workstations at the user’s desk. Unlike traditional workstations, virtual workstations do not have a capital expense. Virtual workstations are extremely customizable in terms of size and power to the exact specifications needed for a given task. Furthermore, the billing is flexible and you only pay for what resources you use. Lastly, with physical workstations, there are many “hidden costs.” Think about the electricity and staffing fees that businesses must pay in order to keep a workstation running. When you switch to a virtual workstation for post-production work, all of the aforementioned costs are managed by a cloud service provider.
Streamlining the Media Supply Chain
As media and entertainment shifts to direct-to-consumer, content management has become absolutely crucial in the media supply chain. Content libraries are only growing bigger and there is an influx of newly-produced assets as team workflows work more efficiently. Even so, most media companies store their library assets on-premise and within tape-based LTO cartridges. By doing so, these assets are neither indexable, searchable, or readily accessible. This slows down editing, versioning, compliance checking, and repackaging, all of which hurts an organization’s ability for rapid content monetization. By implementing a cloud-based infrastructure, M&E companies can utilize tools like machine learning capabilities to manage, activate, and monetize their assets throughout the content supply chain.
Capturing Real-time Data
Archaic and lagged metrics, such as overnight ratings and box office returns, will struggle today to produce actionable insights. Digital transformation for M&E organizations will require a technology and cultural transformation towards a data-driven mindset. To make data-driven decisions, you need to have the tools to collect, process, and analyze the data. Cloud platforms can help process big data by employing machine learning capabilities to deeply understand audiences, which can translate into monetization opportunities further down the funnel. By harnessing the cloud to redefine data strategy, businesses can make confident decisions using real-time data and use actionable insights to deliver real transformation.
Before the pandemic, 2020 was shaping up to be a pivotal year for the M&E industry as audience behavior was changing and new competitors were cropping up; however, the effects of the COVID-19 expedited these trends and forced organizations to transform immediately. In this new age of media, M&E companies must reckon with these unique and long-lasting challenges and seek to change their business models, cultures and technologies to keep up with the changing landscape.
-Anthony Torabi, Media & Entertainment Strategic Account Executive