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Cloud Acceleration and the Business Model for Experimentation

Journal Article from Accedo

Tue 16, 08 2022

Bleuenn LeGoffic

VP Strategy and Business Development, Accedo


The video industry has undergone rapid growth over the last decade and is continuing to expand at an incredible rate. The global video streaming market was valued at $69.55 billion in 2021 and according to a recent report, is projected to reach a staggering $257.79 billion by 2029.

This enormous growth in the market is being largely driven by unprecedented consumer demand for streamed video content. The pandemic has accelerated shifts in viewing behavior that were already underway prior to 2020, with more and more consumers switching from linear TV to video on demand. With the return of macroeconomic health, advertising spend (which saw an unprecedented fall in 2020) has returned to normality. This will improve the business case for new video services, attracting more well-funded entrants to the market.

In addition to driving impressive industry growth, the pandemic has served to speed up the transition to a cloud-based way of working. Today, most media businesses have at least some elements of their operations in the cloud and many new services are also being born this way.

Cloud-based operations: impact on consumers

The cloud has transformed the broadcast industry, and this transformation has had a positive impact on consumers, resulting in more choice and a better viewing experience.

It is now easier than ever for video service providers to create, produce and distribute content entirely in the cloud. A cloud-based way of working means that there is no longer a need to develop your own infrastructure and hardware, making it possible even for smaller players to successfully enter the market. And all of this eventually results in more choice for consumers in terms of available streaming services.

As market competition tightens, it has become more important than ever to provide viewers with a streamlined route to content discovery. Cloud technology makes it possible for service providers to collect and manage huge amounts of user data, and this is of course vital in providing customers with a personalized viewing experience. In addition to helping users find what they want to watch, the proper use of data can also help make targeted advertising more effective.

All in all, the inherent flexibility brought by cloud-based working has made it easier for video services to quickly respond to consumer needs. Video companies are better able to experiment effectively and this in turn leads to a better service for the end user.

Why experimentation is more important than ever

Most viewers have come to expect an intuitive user interface and a high quality, personalized service so video service providers can’t afford to be complacent. In order to remain competitive and relevant, they need to continually evolve and improve their offering, so it is critical that the platform and any associated tools allow them the flexibility to experiment. This is not just true for the larger multinational media corporations. Experimentation is important for every size and type of company that is distributing video content.

In order to construct an effective strategy for experimentation, companies are wise to remember three key points:

  1. Never underestimate the importance of a good user experience.
  2. Always beta test on small, selected groups
  3. It all starts with intelligent data collection that can be turned into actionable insights.

Experimentation needs to be viewed as absolutely critical and should be built into fundamental business requirements. Video providers need to build a culture of experimentation, ensuring each part of the business has the ability to fail and succeed rapidly, sharing insights to all stakeholders that can be used to adapt quickly. That fast experimentation is much easier to do in the cloud than with traditional broadcast on-premises systems.

Final thoughts: cloud acceleration set to continue

The industry remains strong, and growth is expected to continue for the foreseeable future. New entrants to the market will need to be smart about which audiences they want to invest in, as well as making sure their chosen platforms allow them to experiment to continually improve the service.

Growth in the video industry has greatly increased consumer choice, making niche video services easily accessible alongside mass market services. However, viewers don’t just want more choice, they also want to consume media in different formats across multiple platforms and devices. The cloud is helping video service providers to deliver on that front, in order to meet consumer needs. The transition to cloud-based structures is certainly set to continue and this will continue to benefit both video-centric businesses, and consumers.

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