In our latest Amagi AIRTIME webinar, Carl Jones, Managing Director at FTI Consulting, and Kalaivani Sivasankaran, Sr. Director of Product Marketing at Amagi, discuss the business of cloud technology in media, covering everything from revenue optimization to future-forward strategies.
Read on for highlights and watch the entire webinar here.
Amagi: What's unfolding in the media industry today in terms of viewership patterns and broadcast strategies?
Jones: Linear TV viewership has been declining for years, but still accounts for three-quarters of total ad revenue, primarily driven by older audiences, says Jones. Younger viewers, meanwhile, are shifting toward Subscription Video On-demand (SVOD) and Advertising-based Video On-demand (AVOD) streaming services, accelerating a global transition from linear to digital.
This shift is not only impacting consumption and viewership patterns but also affecting the costs associated with rights — linear TV rights remain more lucrative than streaming rights, creating financial pressure on media companies. Media executives face challenges balancing multiple business models and navigating the evolving ecosystem.
Amagi: What can media companies do to keep up with evolving viewer preferences?
Jones: "[One media executive told me] his mantra was — ‘Every dollar that I can save from a technology standpoint gives me one extra dollar that I can put towards content licensing and help grow the business.'”
Of the many levers in media companies, technology savings become an opportunity and a significant lever companies can use to drive value, Jones adds. And cloud migration, which provides the benefits of agility, scalability, and cost savings, is one of those levers.
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Amagi: Who should consider migrating to the cloud?
Jones: "Many streamers are already kind of born in the cloud. Their entire infrastructure, from ingestion through delivery, is in the cloud. So really, this is a question around broadcasters who are a mix of on-prem, hybrid, and somewhere in the cloud. It's not easy to migrate from an on-premise broadcast technology infrastructure to a cloud infrastructure. And, it comes down to the business case."
"Technology executives need to prove the business case for cloud. That can be driven by a number of different factors. Certainly, you want to understand where you are in your refresh cycle—if you're close to your refresh cycle and are about to make a big technology purchase, then your business case is a little better. Companies going through mergers or carve-outs also pose a good opportunity to make bigger tech investments to either consolidate technology structures or establish new ones."
He also emphasizes how enabling new business models, like setting up FAST channels or single live events, opens up business capabilities that are extensible to the cloud.
READ: Transforming live broadcasting through FAST and single live events
Amagi: Are there more benefits of moving to the cloud apart from cost savings?
Jones: "Beyond the business case, which is cost savings, the cloud also enables new revenue streams, so it's both a revenue and a cost side. There's also a liquidity benefit where you transition from large CapEx purchases to smaller OpEx purchases. Beyond the financial side, it does enable other operational capabilities as well, like re-envisioning and redesigning your workflow. So it's a good opportunity to unify digital and broadcast workflows perhaps, and also streamline and drive efficiencies."
In addition to these, Jones also emphasizes how cloud migration helps address the challenge of finding the right talent by expanding its reach. Another operational benefit is agility, which enables standing up FAST channels or single live events.
Amagi: What factors should be considered when deciding if a broadcaster should go fully cloud-native or hybrid?
Jones: "Cloud migration certainly is a journey that needs to be planned and thought holistically across the broadcast value chain. You don't want to just move one part of your infrastructure to the cloud. It really should be part of a cohesive strategy to move. The full value chain in the cloud, and that's a multi-year journey. When you embark on big cloud migration, you typically start first with distribution, then go to playout, then Media Asset Management, and then you go backward just so you minimize ingress and egress costs."
"You're going to be in an environment where you have a part of your infrastructure on-premise and part of it in the cloud for a long time. This is going to create complexities for both technology execs and media supply chain vendors because they are going to be in this world of complex and varying customer requirements. So there's this kind of journey dimension that'll drive a hybrid environment."
READ: How to transform your broadcast operations with cloud modernization
Amagi: What key challenges would the cloud migration journey pose? What are the key considerations during the planning phase?
Jones: "The planning process and the program design needs to be holistic — a true business-wide transformation. Bring in the CFO and the finance team early and start to discuss the benefits. Because this isn't just about comparing the cost of hardware on-premise to cloud, it's enabling all these other capabilities, so you know, there's going to be savings from workflow, which in turn has a knock-on implication for your operating model and org models. There might be savings there. Transitioning to the cloud also means there's real estate savings."
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Amagi: Where do you see the industry heading?
Jones: "Media companies are experimenting with new business models and new capabilities. To meet this change in consumption patterns and viewership patterns, I think what we're going to see over the next 3-5 years is technology execs needing to adapt to these new business strategies."
"We'll continue to see a mix of hybrid on-premise and cloud technology environments. We will still need to support your linear channels and support the growth of the streaming business, ultimately supporting a wide variety of business strategies. The need to leverage technologies to not only drive efficiencies, but also enable those new business capabilities and monetization. And I think that's going to create a lot of opportunities for companies to reinvent themselves and create new ways of driving engagement with viewers."
Want to learn more?
- Watch the full webinar here
- Read our broadcast report here
- View our full webinar series here
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