THAT’SENTERTAINMENT!

CREATING SPOT-ON CUSTOMER EXPERIENCES WITH DIGITAL MEDIA

By Ron Quartararo and Kimmy Brown,

with contributions by Mark Aylor and Robert Rothstein

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Changing consumer preferences are combining with a sluggish economy to stall profits. Companies need to grow loyal consumer audiences. At the same time, production costs need to be carefully managed. And efficiencies need to be found in content, production, management, and distribution. On the revenue side, many companies own huge archives of nondigital content and are eager to find ways to generate income from intellectual property.

CONTENT PRODUCERS, PUBLISHERS, TV BROADCASTERS, FILM STUDIOS, AND DIGITAL-MEDIA BUSINESSES THAT EMBRACE TECHNOLOGY TO CONNECT WITH THEIR AUDIENCES AND PARTNERS WILL BE ABLE TO NAVIGATE BEYOND THESE CHALLENGES TO CREATE OPPORTUNITIES:

ACROSS THE MEDIA AND ENTERTAINMENT INDUSTRIES, CHALLENGES ABOUND.

New Operating Models1 Sticky Revenue Streams2 Long-term Competitive Advantage3

MacBook Pro

AT&T

FROM ANY LOCATION AND DEVICE, TO ANY LOCATION AND DEVICE

AT THE EXTREME ENDS OF THE CONTENT SUPPLY

CHAIN, INCREASING DIVERSITY OF PRODUCTION

AND USAGE SCENARIOS WILL CONTINUE TO

IMPACT THE MEDIA AND ENTERTAINMENT

INDUSTRY DURING THE NEXT FEW YEARS.

MOBILE TECHNOLOGIES MAKE IT POSSIBLE TO

PRODUCE CONTENT IN ALMOST ANY LOCATION,

UNDER ANY CIRCUMSTANCES, AND STREAM IT

IMMEDIATELY TO A NETWORK OR SATELLITE

FOR BROADCAST DISTRIBUTION, OR SEND A

VIDEO FILE FOR POST-PRODUCTION.

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MEDIA AND ENTERTAINMENT COMPANIES NEED TO BE ABLE TO GENERATE CONTENT FROM ANY LOCATION IN THE WORLD AND DISTRIBUTE IT EFFICIENTLY—TO ANY CONSUMER, AT ANY TIME, AND ON ANY DEVICE AROUND THE GLOBE.

Further advances in high-quality, low-latency transport technologies such as 4G LTE will significantly impact content distribution as coverage becomes more widespread. Consumers also demand an unprecedented wealth of choices. They can receive an uninterrupted, high-quality content experience on every device: digital media centers, televisions, notebooks, tablets, and smartphones.

It’s also becoming easier for consumers to access—and even create—content anytime, virtually anywhere, and to mesh it with social-media environments. Spontaneous and shared experiences centered around political, social, and news events are becoming a part of everyday life. And in some cases, they are having a profound cultural impact (think 2010’s Arab Spring), and bringing together people around the globe.

Following consumer demand, media and entertainment companies need to be ready to offer unicast—individualized content services, including live streaming—to mobile devices.

The payoff of implementing the unicast service model will be a wealth of consumer data, including:

UNICAST SERVICES AND THE CONSUMER CROWD

Who consumes what type of content, when, and in what manner.

How viewers respond to advertising. What sort of buzz the content creates in social media.

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AT THE SAME TIME, THERE WILL ALWAYS BE OCCASIONS—SUCH AS POLITICAL, SPORTING, AND MAJOR WORLD AND NATIONAL NEWS EVENTS—THAT MILLIONS OF VIEWERS WILL TUNE IN TO SIMULTANEOUSLY.

THESE MASS AUDIENCES ARE HUGE DRAWS FOR ADVERTISERS.Traditional audience ratings and associated analytics will still play a role, though these will evolve to deliver immediate, decision-ready results from a wider variety of channels. Unicast will provide the ability to deliver highly targeted advertising based on these valuable analytics.

CREATING AWARENESS—AND DEMAND

Many consumers aren’t aware of the range of services that major media

and entertainment companies already offer, or are piloting with subsets

of their audiences. It makes sense to communicate them more broadly.

Offer personalized navigation tools and search capabilities to help consumers find the content they prefer, on the various devices they use.

Provide over-the-top models that enable consumers to experience the multiple ways they can consume your content—watching linearly, recording on demand, or subscribing to video-on-demand (VOD) services —within a flexible subscription and pricing model, so they can select options to satisfy viewing habits.

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THE CLOUD PROVIDES AN EFFICIENT AND ECONOMICAL WAY TO STREAMLINE OPERATIONS AND

CONNECT WITH AUDIENCES.

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STRATEGIC ROLE OF

THE CLOUDIMPLEMENTING CLOUD-BASED SERVICES

CAN EMPOWER CONTENT PRODUCERS

AND DISTRIBUTORS TO:

STREAMLINE OPERATIONS AND SHARE ASSETS.

Large film and television studios often

operate in siloed business units, each

with its own infrastructure. Moving

content creation, management,

production, and distribution functions

and workflows to the cloud empowers

the sharing of assets and resources.

MONETIZE BURIED TREASURE.

Content owners with stores of nondigital

content assets need to weigh the costs of

digitizing this content with the possible

returns of monetizing it. New cloud-based

content-distribution models can be combined

with advanced analytics and new consumer

behavioral and location-based data to define

new audience segments for existing content.

PRACTICE SOUND ECONOMY.

The cloud proves the advantages of transitioning

to an operational expense (OpEx) from a capital

expense (CapEx) business model. Content production,

distribution, and consumption supported by the cloud

rely on as-needed services and resources, facilitated

by data centers.

GAIN SOCIAL ADVANTAGE.

Cloud-based production and distribution also makes

it easier to connect content consumption to social-

media channels, so consumers can come together

spontaneously and have a rich social experience

around their content. At the same time, companies

can expand their social-media presence and connect

more closely with key influencers.

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FOR MANY MEDIA COMPANIES,AN INCREMENTAL MOVE TO THE CLOUD IS MOST EFFECTIVE.

Determine best practices for sharing assets and information via a federated digital asset management (DAM) solution with globally distributed content producers, vendors, and business partners, as well as disparate business units within the same media organization.

Devise and validate appropriate security protocols and workflows before migrating primary assets and production processes.

Begin by using cloud storage for digital media archiving for disaster recovery, as well as secondary or tertiary levels of storage for media assets.

Ultimately execute a vision of a media cloud: Data enters the cloud, workflow is performed in facilities based on proxies and metadata, and all computational work on essence files stays in the cloud, including replication, transcoding, and distribution. Data never needs to leave the cloud environment.

STRATEGIC PARTNERSHIPS WITH TECHNOLOGY LEADERS

WILL HELP MEDIA COMPANIES GAIN A COMPETITIVE ADVANTAGE AND PLAY TO

THEIR STRENGTHS.

PLANNING FOR TOMORROWNEW MARKET COMPETITORS SUCH AS AMAZON AND GOOGLE HAVE PLANS UNDERWAY TO PRODUCE AND DISTRIBUTE THEIR OWN CONTENT, POTENTIALLY BYPASSING MEDIA AND ENTERTAINMENT COMPANIES. They boast a wide reach among consumers, resilient infrastructures, and proven delivery models. But media and entertainment companies can still enjoy many advantages by:

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To access additional content, provocative analysis, and collective insight from the minds of forward thinkers, explore our thought leadership site.

VERIZON.COM/ENTERPRISE/THOUGHTLEADERSHIP

THINK FORWARD.

Leading-edge companies will protect their revenue streams by delivering high-quality content today, on a massive scale, with contextualized advertising that creates a compelling experience for consumers. Thanks to emerging technologies, the world is literally the stage for this kind of rethinking of possibilites. Content can happen almost anywhere, and make its way along the digital supply chain to millions of consumers. Now that’s entertainment.

Expanding and exploiting powerful brands.1 Delivering customized consumer experiences.4

Generating high returns from valuable media libraries through on-demand encoding and archiving.

2 Capitalizing on increased business intelligence throughout the digital supply chain.

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Moving production, distribution, consumption, and preservation of content to the cloud.

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ABOUT THE AUTHORSRon Quartararo is Managing Principle of New Business Incubation at Verizon. Kimmy Brown is Associate Director at Verizon. Mark Aylor is Director of Global Data Solutions, Professional Services and Technology, Media, and Entertainment at Verizon. Robert Rothstein is Senior Consultant, Business Development and Strategic Planning at Verizon.

© 2012 Verizon. All Rights Reserved. The Verizon name and all other names, logos, and slogans identifying Verizon’s products and services are trademarks and service marks or registered trademarks and service marks of Verizon Trademark Services LLC or its affiliates in the United States and/or other countries. All other trademarks and service marks are the property of their respective owners. ES15352 07/12