Entertainment Cloud: The Motion Picture and Television Cloud Computing ...

Entertainment Cloud: The Motion Picture and Television Cloud Computing ...: We are at the beginning of a tsunami of change in the Motion Picture and Television industry. Part is due to the natural disasters in Asia a...

Entertainment Cloud: Was Netflix wrong?

Entertainment Cloud: Was Netflix wrong?: In a swift reversal, Netflix said that it had decided to keep its DVD-by-mail and online streaming services together under one name and one...

Was Netflix wrong?

In a swift reversal, Netflix said that it had decided to keep its DVD-by-mail and online streaming services together under one name and one Web site, abandoning the breakup it had announced earlier.

Was Netflix right? Let us look at the facts:

Online streaming remains the core business for Netflix going forward.  The most disruptive technology in video today also offers the most opportunity for our industry. The sale of DVDs have been falling since 2007. Hollywood needs to plan for the fact that the DVD market has long since peaked, with some analysts arguing that consumers no longer feel the need to buy films when they can rent them online. 

Google, in a research paper published in April 2011, said that searching for pirated movies, with terms such as "free movies" and "movie torrent" peaked in 2008 and has dropped since. Searching for legal DVD-related terms is also down about 45% in the same period but, according to Google's internal data, searching for online rental has lifted off.

The Digital Entertainment Group noted that the subscription film business saw a 33% jump in revenue growth during the otherwise difficult first quarter highlighting that the future for Hollywood is in the download, not the DVD.

THe SNL Kagan research firm says that studio shipments of DVDs fell 43.8% in 2010. "Consumers are now opting to sign up for streaming and-or rental services" analyst Wade Holden wrote.

A Credit Suisse report issued on September 2011 concluded 20% of U.S. pay-TV subscribers may be inclined to cancel service because it’s too expensive.

According to Convergence Consulting Group, estimates that 2 million households in the U.S. will have abandoned cable TV for the Web. According to Convergence, 18 percent of viewers in the U.S. watched free, full episodes of TV on the Web last year, and that is growing by a percentage point every year.

So why does it make sence for Netflix to push the streaming model? On a per subscriber basis, last year Netflix only paid one tenth the amount for programming ($34/subscriber) as did cable and satellite TV providers ($359/subscriber). Half of Netflix cost of goods sold in 2009 was spent on postage and handling. The USPS is proposing a seven percent increase for media or library mail. A seven percent increase might not sound like a lot, but it could have a severe impact on Netflix’s business. 

With the introduction of the notion of “cloud computing”, the CDN community has experienced the growth of commercial computing and storage delivery systems. The biggest trend affecting the market over the past 12-18 months is the emergence of broadcast quality content being available through over-the-top services. Also, more downward pressure on CDN pricing is based on service providers fiercely competing for business. This makes Netflix's internet delivery more appealing than mail over the long term. 

Entertainment Cloud: The Motion Picture and Television Cloud Computing ...

Entertainment Cloud: The Motion Picture and Television Cloud Computing ...: We are at the beginning of a tsunami of change in the Motion Picture and Television industry. Part is due to the natural disasters in Asia a...

The Motion Picture and Television Cloud Computing Tsunami

We are at the beginning of a tsunami of change in the Motion Picture and Television industry. Part is due to the natural disasters in Asia and the other is due to Moore's law.

The Motion Picture and Television industry is very different from other businesses in its Cloud Computing needs. The challenges of moving very large files and the associated problems of upload and download speeds have hampered the use of cloud computing in the past. The 100GbE, standards developed by IEEE (IEEE 802.3ba) and the Advanced Air Interface with data rates of 100 Mbit/s mobile and 1 Gbit/s fixed standards(IEEE 802.16m-2011) may be helping to make Cloud Computing a reality in the Motion Picture and Television industry in the very near term.

If your network needs to send 4 to 6 Gigabits to a single ISP to support a customer event, you need to be sure that your primary transit provider can get the job done. A surprisingly high number of “Tier 1” provider networks have not been keeping up with the changing times or growing to meet continued demand.

As we move these large files around, we may want to keep the following questions in mind:

1) Does the Internet service provider (ISP) provider rely on other ISP providers to move your files?
2) Does the Service Level Agreements (SLAs) cover your traffic once it leaves their network.
3) Does the connection hop off and on the network between you and your customers? If so, you add an order of magnitude to the number of things that can go wrong with each hop of the providers network.
4) Is a 10 GigE port standard with the ISP provider that will be moving video files? .

We may want to look at this as an opportunity to define standards in the Cloud Computing solution for the Motion Picture and Television industry