Thursday, November 6, 2014


It seems everywhere you look these days there is something about “the Cloud” in front of you.  Twitter, LinkedIn, the tech press, and seemingly every press release you read has the various players in the Media and Entertainment industry describing what they can do for you in the cloud.
The promise of the cloud is BIG.  At its most basic level, there is the opportunity for a company  to turn its fixed investments in CAPEX into variable (or “burstable”) spend when required as OPEX.  For smaller companies and companies without legacy infrastructure this is potentially the best way forward so that their costs are directly tied to their revenue stream whether those requirements are storage, transcoding or rendering for post production and visual effects work flows.  For larger and more established companies, it is the opportunity to exceed current infrastructure capacity to take on that surprise project.  It is also the opportunity to set an investment level threshold where companies  build to the “trough” rather than the “peak” for the inherent variability in the media industry business season.
But this isn’t a new promise in the IT world.  Back in the early 2000s, this promise was held out to the largest companies in the guise of “outsourcing”.  What’s changed now?  First, CEOs and CFOs in the M&E industry are well educated now about “cloud” and understand enough to know that their businesses should be at least experimenting with workflows in the cloud.  Additionally, the “burstable” nature of the cloud means that businesses can actually “test drive” new capabilities in their workflows without significant investment or risk to their business.  These two structural changes have resulted in a proliferation of growth in “back office” workflows across industries.  SaaS (which is the ultimate cloud approach where the application and infrastructure are “by the drink”) has been a driving force here, allowing companies to put their expense systems, HR systems, and even sales and CRM systems into the cloud (think with great success for the companies who are deploying them.
But putting production systems into the cloud has been elusive.  These applications are both complex and customized to the point where SaaS is not really an option.  Even when two companies are using the same rendering application for their workflows, they are often managing their compute and storage in entirely different ways.   So the industry has coined a new term to attempt to educate the CxO suite on how to approach this landscape – IaaS – or “Infrastructure as a Service.”  At its most basic level, when you retain control of the application but are leaning on the cloud for storage or compute resources, this IAAS term describes your approach to leveraging the cloud.  But while this approach has better economics and risk models than the “outsourced” approach in the industry from 10 years ago, it isn’t exploding at the rate you would expect with its promise of “on demand” and “less investment”.
So what is holding the M&E industry back from investing in the cloud for its primary workflows?
Two things: security and connectivity.
Security.  While every major cloud provider goes to some length to describe what kind of security protocols their customer’s  data lives in while on their servers, we still hear horror stories every day about large companies being hacked for their valuable resources (Target and Home Depot are the most recent infamous incidents).  In our specialized industry, all of us know that one single breach of pre-release materials can be the death of a company and no amount of promised encryption, even when from established and emerging cloud platforms, can alleviate those fears.  Further, if the project you are working on isn’t your IP, you are likely already bound by contract to use certain security measures that preclude using “public” cloud infrastructure for your workflows.  The ability to audit security processes and posture is important to trusting partners in the service chain and remains a requirement for the most important content workflows.
Connectivity.  The challenge of delivering the promise of “burstable”,
“on demand” storage and compute power to these resource intensive applications comes down to the internet’s age old axiom: sustainable bandwidth.  While there are plenty of companies that can drop a multi-gig connection to a cloud provider, there are few that have the expertise to connect your application into the cloud resources right to where they need to be and integrate with your existing network and workflow – taking account of aspects like low latency requirements.  Even then, just finding a “large pipe” for your data doesn’t complete the business model—if you cannot get your bandwidth to be as “burstable” as your storage and compute power, the investment model for cloud falls apart.
So at Sohonet, we believe the key to unlocking the M&E industry’s “cloud potential” is the ability to offer studios, post production houses and visual effects companies options for getting their applications connected to public and private cloud infrastructure in a manner that meets their low latency and security requirements while still meeting the “on demand” business model to support their ability to “burst” into the cloud for production.
We believe that the M&E industry will embrace a mix of three approaches to meet their production workflow and business model requirements.  Inherent to all three approaches is unlimited or inexpensive egress (essential for the unpredictable production process), improved security posture, and (most critically) access to 24/7 support resources that understand their unique workflow requirements.
  • Low-cost access to generic compute and storage resources (public cloud) coupled with sustained low-latency bandwidth that includes unlimited egress.
  • Access to application-specific low-latency and/or industry standard security approaches (private cloud) for storage and compute resources coupled with sustained low-latency bandwidth that includes unlimited egress.
  • High-speed, burstable connectivity to major cloud providers where the support for the application and security are already “in-house” and the only missing component is the “burstable” bandwidth directly into their resource center that provides the lowest possible latency and inexpensive egress while still improving the security posture.
We believe that access to cloud resources is critical to the industry’s progression along ever-increasing data storage and compute requirements as 4K workflows begin their progression to 8K and High Dynamic Range workflows and while 4K consumption becomes mainstream in consumer homes.  As the trusted communications partner for the M&E industry Sohonet is committed to providing the same Fast, Flexible and Phenomenal customer service that has built our brand and reputation over the past 15 years, and that delivering on the promise of “Connected Cloud Services” is critical to our customers’ future.
Chuck Parker- Executive Chairman, Sohonet

Sunday, April 20, 2014

Sports and Second Screen - The Winning Combination

1.    Introduction: the winning combination!

Sports are big for TV. To be convinced of this, just look at the amount paid by BT to broadcast the football games of the European Champions league: £900m ($1.5bn/€1.1bn). As BT won the football rights, BSKYB the losing bidder saw its share price drop 11%[1] and £1.3bn ($2.1bn/€1.6bn) was wiped off its market capitalisation in one day. Clearly, the loss of football games rights was seen as a major risk to its future profitability[2]. According to the Telegraph, BSKYB even lobbied Champions League officials for three days to reopen the bid after it was excluded from the auctions.
Sports are big for TV because it can draw a huge number of fans who are ready to pay for content. Together with Hollywood blockbusters, sports form the basis of pay TV. Contrary to films, sports is also very big for 2nd screen.  Nielsen compiled the below statistics[3] that shows that sports is the main driver for tweets about TV shows. Forget about the “X-Factor”, and the US Presidential race--this is all about the Super Bowl; 50% of tweets about TV are about sports. Why do sports events drive so much social TV activity? This is due to the nature of fans and of sports events themselves. Sports fans are really engaged and very emotional about their teams and players. Sports events are broadcasted live and drive immediate reactions. 

Tuesday, April 15, 2014

Q1 2014 Quarterly Second Screen Update: Impacting the 1st Screen

2nd Screen has continued to reveal evidence of progress in both monetization and engagement.  In addition to our focused research on monetization in Q1, we have been completed a 30-page research report on Sports on behalf of our society members to help them and their primary stakeholders (investors, customers, management) cut through the hype and the disillusionment and focus on clear examples of what is working. 

If you had the opportunity to attend 2nd Screen Sunday at NAB, you would have seen the energy around the momentum in the space, starting with the very exciting Twitter Amplify keynote from Mike Park (@MEP) and driving through panels on monetization, UX, discovery, social and enhanced viewing with interesting perspectives shared from Comcast, Roku, Turner, Twitter, Nielsen, Razorfish, Videology, Brightroll, OV Guide, Xbox, the UFC, Razorfish, Kargo, Fox Sports 1, and Tivo.

Some highlights from the update covering 10 major market trends (members and subscribers have full access to all of our research):

1)     Hype and disillusionment. The ‘ying and yang’ of the still nascent space continues to frustrate investors, executives and even consumers.  While the press (particularly the tech press) continue to be attracted to negative sentiment, there continues to be growing evidence in both monetization and engagement with consumers to support the fundamental data that propels the market segment forward, despite a dearth of “killer app” use cases.  The continued investment in 2nd Screen by nearly every major sporting league and media distributor sheds some light on the potential that is slowly being revealed to the market (see our recently published research paper “Sports and the 2nd Screen: the winning combination”).  March Madness was perhaps the greatest example of this leading up to its conclusion this weekend in the Final Four.  While the return of the PGA Masters was nothing short of awesome though short-lived, we still have MLB’s “At Bat” app to keep ourselves fully occupied. 

2)     An ecosystem, not an app.  Chromecast released their SDK to the wider population, driving more 2nd Screen experiences for both Discovery and Control to be adapted from Viewing Experience apps and Roku announced their streaming stick which will also leverage “casting” features for Netflix and YouTube upon initial release (give thanks to the DIAL protocol).  Microsoft continues to invest in its 2nd Screen ecosystem under the SmartGlass brand, giving better feature capabilities not only to video content, but to games (Dead Rising 3)—and have released an SDK of their own (have you checked out BattleField 4: Commander?).  Finally, Amazon released their new Fire TV yesterday—with a “Second Screen” companion option in the settings menu and casting for Netflix out of the box.  Game on.

8)     Social TV.  Twitter is making a big push into the 2nd Screen space with both Twitter Video Cards and Twitter Amplify.  Mike Park’s keynote at 2nd Screen Sunday at NAB last weekend highlights the opportunity for both engaging the consumer and bringing them back to the first screen and for engaging them in the brands whose advertising space enable the video ecosystem as we know it.  John Dixon from Comcast spoke on a panel highlighting the opportunity they envision through the SeeiT feature, whereby consumers can manage their first screen viewing schedule through Twitter.  No surprise, Facebook recently announced their intention of ramping up its capability in the space beyond autoplay videos in your news feeds and enabling your hash-tagged posts to live beyond your circle of friends.  3 million retweets during the Oscars can’t be a bad thing for consumer engagement, and had they highlighted that Samsung phone even just a little bit (water marked brand image in the photo), the advertising potential could have easily been realized 100x over (think Twitter Amplify here).  Watch this part of the 2nd Screen space closely.

More on Ad Supported Video (AVOD) growth, monetization, the mobile web, ad blockers, consolidation and discovery, as well as an update on monetization and the UX of sporting apps in our report.

Thursday, April 10, 2014

Second Screen by the Numbers, Q1 2014 - more growth, more engagement, more monetization

2nd Screen Q1 2014 infographic

2nd Screen Viewing Experiences:
73% of TV Everywhere views are on a 2nd Screen.  ReelSeo.  Feb 6th
89% of video views on the BBC’s iPlayer are VOD vs. Live.  52% of video requests came from mobile
Auto-authentication reduces TV Everywhere abandonment rate from 50% to 10%

2nd Screen Companion Experiences:
35% of 1st screen time is 2nd screened, of which 1/3 is with related content.  41% of that to follow-up on TV ad, 11% to interact with TV, 14% social about TV program, 24% discovery.  Milward Brown

2nd Screen Growth:
Year over year, share of time spent watching videos on tablets and mobile devices has increased 719% since Q4 2011, and 160% year-over-year since Q4 2012
Mobile video ad spend will increase 82.1% in 2014.  eMarketer.

Find more information, research, and infographics on our website

Follow our conversation on Twitter @ChuckParkerTech and @S32Day
Join us in NYC to discuss 2nd Screen and sports on June 24th in partnership with the Sports Video Group

Saturday, March 8, 2014

The Oscars, Roku and the BBC - Revealing the future of TV

It's been another fast-paced week in the digital video and second screen industries.  While the OTT video world is still reeling from the previous week's announced Disney Movies Anywhere service (a serious threat to UltraViolet) and Marvel's announcement of an exclusive output deal with Netflix (continuing to threaten HBO), second screen took a shot in the arm from the Oscars, and Roku mounted an attack on Chromecast.  At a glance:

  • "Watch ABC" did Second Screen for the Oscars "right"
  • Ellen broke Twitter
  • Roku announced their "streaming stick" device
  • Dish struck a deal with Disney to delay commercial skips
  • FreeWheel was acquired by Comcast
  • The BBC announced the death of analog for it's Channel 3 service
  • An Aereo lost its court battle in Salt Lake City and Denver

Sunday, February 16, 2014

Quarterly Second Screen Market Trend Update

2nd Screen had a tumultuous run up to CES 2014 with the press continuing to be split between hype and disillusion.  While we normally would have written and presented this update at CES, we decided to focus on releasing our research on monetization on behalf of our society members to help them and their primary stakeholders (investors, customers, management) cut through the hype and the disillusionment and focus on clear examples of what is working.  Ironically, the additional insight gained in the first few weeks of January has been invaluable with regards to both consolidation (Yahoo closing IntoNow) and M&A (Viggle buying Dijit, TiVo buying Digitalsmiths).  NATPE also did the production industry a favor by publishing some great research on enhanced viewing experiences as seen through consumers’ eyes as well as those of the production executives making decisions about where to invest in content development (in-depth blog).  Finally, the holiday season has continued to accelerate the proliferation of devices into the market place, driving continued growth in engagement and monetization opportunities for the 2nd Screen companion and viewing experience ecosystem.