Cost Pressures, Viewer Expectations Play Prominently as M&E Businesses Seek Cloud Agility

Akamai-commissioned study suggests increasing data volume, customer experience among factors influencing cloud computing considerations

CAMBRIDGE, Mass., Sept. 13, 2023 /PRNewswire/ -- Akamai Technologies, Inc. (NASDAQ: AKAM), the cloud company that powers and protects life online, today published a new research study examining the trends behind the Media and Entertainment (M&E) industry's adoption of cloud technologies. The study, commissioned by Akamai and conducted by Forrester Consulting, surveyed 225 respondents from M&E businesses globally, the majority of whom either influence or have final decision-making authority over streaming architectures and/or cloud workflows within their organizations. The results showed that 73% of M&E businesses are considering moving away from large, legacy cloud providers in favor of more portable, cloud-native setups due to cost pressures, among other findings.

High customer expectations driving cloud adoption in the M&E sector

M&E businesses were early cloud adopters, with 92% of respondents reporting they are either "successful" or "very successful" with cloud-based technology, and 77% reporting their cloud journeys are progressing faster than expected. This uptake has been driven by high customer expectations, with 76% of those surveyed reporting their users expect zero downtime, buffering, or playback errors.

Looking ahead, however, the report highlighted concerns around the ability of existing cloud infrastructures to future-proof the M&E industry's growth. According to the Forrester study, "M&E companies are reevaluating their cloud provider relationships, seeking trusted partners to overcome top challenges and accelerate content production."

Business costs, data growth are top of mind for the M&E industry

Rising costs are having a notable impact on M&E businesses' cloud strategies. Among respondents, 73% are considering moving away from traditional cloud providers due to cost pressures, while 63% report the costs are difficult for their business to manage long-term.

Increasing data volume is highlighted in the report as complicating respondents' abilities to further adopt cloud infrastructures. Thirty-six percent anticipate more than 50% growth in data volume over the next three years, and 68% agree that data volume complicates infrastructure adoption.

"Cloud provider partners must evolve to meet M&E customers' data demands," according to the Forrester study. "As many consider refactoring their cloud provider relationships, they seek partners to meet them where they are and help with their cost, data egress, and hosting needs."

Key cloud use cases

Storage is the most common streaming use case for cloud services, according to nearly 60% of respondents. Meanwhile, at least half of the organizations surveyed are also using the cloud for key functions like content protection (DRM/watermarking), billing and subscription management, and performance analysis.

"This research shows the dynamic nature of the workloads that M&E businesses are running on cloud services and infrastructures today. What's more, the research also reveals that an impressive number of those businesses — half or more — are using the cloud for some of their most critical functions," said Todd Loewenstein, Akamai senior manager of media industry marketing. "As more and more content becomes available to consumers through over-the-top (OTT) services, M&E businesses need to store and protect this content on a cloud that can scale with their changing needs."

Competitive advantage

With M&E, and video streaming services in particular, becoming an increasingly crowded market, businesses are looking to cloud providers to help them improve the customer experience (CX) and retain a competitive advantage. Sixty percent said they have seen or would expect to see CX improvements thanks to cloud investments, and 59% have realized or would expect increased ability to generate and access real-time insights.

"The study helps quantify what we're hearing from customers and prospects about the current state of their cloud journeys," said Loewenstein. "They're under huge pressures to deliver standout customer experiences while operating under intense budgetary constraints."

"While these challenges are especially pronounced in M&E, they're shared by businesses in other industries. This is one of the reasons Akamai is taking a fundamentally different approach to cloud computing," Loewenstein added. "In introducing Akamai Connected Cloud earlier this year, we've designed cloud computing services that can help organizations break free of the traditional, centralized clouds, and start building on a more modern, distributed design, unlocking new flexibility and cost savings in the process."

Click here to access a PDF containing additional data from the research study.

Methodology
Forrester's global study surveyed 225 global IT decision-makers at M&E firms in June 2023, asking them how they view and manage their cloud strategies.

About Akamai
Akamai powers and protects life online. Leading companies worldwide choose Akamai to build, deliver, and secure their digital experiences — helping billions of people live, work, and play every day. Akamai Connected Cloud, a massively distributed edge and cloud platform, puts apps and experiences closer to users and keeps threats farther away. Learn more about Akamai's cloud computing, security, and content delivery solutions at akamai.com and akamai.com/blog, or follow Akamai Technologies on Twitter and LinkedIn.

Contacts:
Chris Nicholson
Akamai Media Relations
+1.508.517.3703
[email protected]

Tom Barth
Akamai Investor Relations
+1.617.274.7130
[email protected]

SOURCE Akamai Technologies, Inc.