Leveraging the cloud can help accelerate market growth, finds Frost & Sullivan
In order to manage the explosion of digital media and consumer devices, as well as the increase in video consumption, the media and entertainment industry must balance the need to support complex workflows and new data formats with uncertain revenue and monetization.
Cloud solutions offer an attractive solution to this dilemma, as they can help media and entertainment companies manage their processes and workflows more effectively as they are scalable, flexible and reliable. These solutions are also more cost-effective and convenient, since they do not require any upfront investment and can be paid for according to usage or through a monthly/yearly subscription.
New analysis from Frost & Sullivan, Global Media and Entertainment Solutions for the Cloud, finds that this nascent market earned revenue of only approximately $100 million in 2013, but will grow nearly nine-fold by 2020. This study covers specific well-established classes of cloud solutions such as transcoding, animation tools, media asset management as well as niche solutions such as metadata, closed captioning, and subtitling services. Although North America is presently the biggest market for media and entertainment solutions on the cloud, the Asia-Pacific region is expected to open up the most opportunities for solution providers over the next five years.
"The constant pressure to decrease IT budgets and invest resources in generating high-quality, creative content instead is driving media companies globally to adopt cloud solutions," said Frost & Sullivan Information & Communication Technologies Principal Analyst Avni Rambhia. "This, along with the need to maintain data on the cloud to prevent data losses due to natural and artificial catastrophes is boosting the prospects of cloud solution vendors in the media and entertainment industry."
Unfortunately, media companies accustomed to having on-premises systems are wary of embracing the cloud in a large way. Concerns surrounding the security of content on the cloud and lack of high-reliability high-bandwidth connectivity in some parts of the world are also preventing the market from reaching its full potential.
"Vendors are responding to these challenges by creating more awareness on the benefits of cloud solutions and allaying fears regarding the security of content on the cloud," noted Rambhia. "They are also rolling out solutions that can be easily integrated with the client's existing on-premise infrastructure to expand their global customer base."