How content producers can be their own Netflix

A content arms race has emerged in media and entertainment driven by enormous sums of investment in online content licensing, and the creation of original content by Netflix and Amazon, both eager to snap up as many subscribers globally as possible.

UK viewers now watch more than a billion minutes of TV content online weekly, according to the Ericsson Mobility Report, while a recent Digital TV Research report predicted revenues for TV shows and movies delivered online for the top 138 countries will hit $83 billion in 2022, more than double the total two years ago.

Leading the charge is Netflix, the giant of the over-the-top (OTT) internet content world. In April, the company announced its global subscriber count had hit 125 million fuelled by consistent increases in content investment, including a commitment this year to spend $8 billion and make its library 50 per cent original programming. Amazon is hovering behind at around $4 billion, followed by Facebook and Apple with around $1 billion each.

While Netflix is by far best known for its end-user experience and mammoth investments in original content, its biggest differentiator is in fact its supply chain, particularly when it comes to enabling such rapid expansion into niche, regionalised markets. Rather than just localising content for India and the Philippines, for example, it is creating a significant amount of original programming for these countries.

We can enable content producers to compete and operate with the same efficiencies you might see from an Amazon or Netflix

The focus on niche audiences has a broad impact on the content supply chain in terms of the volume of content needed and how certain the producer needs to be that each piece of content it creates is more likely to be a hit than miss. This is a massive challenge for content producers and has had a big impact on how they look at the business landscape.

With a unique supply chain that is tightly controlled and completely connected, Netflix has an excellent understanding of both the cost of production and which audiences are engaging with what content. Visibility into these datasets enables it to calculate return on investment in content production in ways no other content producer is able to.

“One of the best ways to improve speed and efficiency in a content supply chain is to connect and manage it as if it was a single horizontal supply chain,” says Belsasar Lepe, founder and chief technology officer at Ooyala. “However, that’s not always straightforward because there is still a decided preference for best of breed, meaning most content producers have a non-linear editing suite from a different provider than their media asset management system or encoding fleet, so it’s very difficult to connect their supply chain.

“Audiences are more fragmented and producers have to store more metadata because content is localised for more regions, so the complexity of the content supply chain has significantly increased both in terms of the assets being managed and the number of distribution end-points. To reach and resonate with those audiences, content producers have to manage that complexity without drastically larger budgets.”

With its Flex Media Platform, Ooyala is helping content producers be more like Netflix by enabling them to streamline that process and ultimately move through their supply chain more quickly and efficiently, generating meaningful data all the way along it.

The first phase is understanding the overall workflow. Typically, a content producer will have a media asset management system and some form of an archive. If that system isn’t working well for the content producer, as is often the case, and there is no central repository of assets operating across the entire organisation, that first step is vital.

Once those initial efficiencies have occurred and existing content is no longer being recreated, the next step is building out the workflow from that core and connecting all systems and processes. Then content producers can really start to accelerate efficiencies by automating tasks, previously undertaken by humans, with artificial intelligence (AI) plug-ins such as Microsoft Cognitive Services or Amazon Rekognition.

Automation is transforming media and entertainment, and enabling content producers to target niche markets around the world on existing budgets by multiplying capability. Media startup ZoneTV, for example, has teamed with Ooyala to use Microsoft Video Indexer, part of Microsoft Cognitive Services, to create customised channels. The same tool can also be used to subtitle content automatically.

“By automating a laborious, manually driven process, you’re able to knock 80 or 90 per cent off the time it takes to regionalise a particular piece of content,” says Mr Lepe. “That’s why AI and automation are so important; they help customers deal with a much more fragmented market by automating the process of going after it.

“However, if you’re media asset management system is not talking to your distribution and ingestion point, it will be very difficult to leverage AI capabilities. This is where a platform such as Ooyala adds value because we provide a form of connective tissue, so once a customer is leveraging our or a partner’s media asset management system, it’s very easy to plug in new technologies, such as virtual reality.”

In a rapidly evolving landscape, it’s vital that producers are able to keep pace with new technologies that are transforming the way people consume content. Analyst firm IDC predicts virtual reality and augmented reality headsets will reach 80 million by 2021, by which point it will be a $75-billion market, according to Greenlight Insights.

Virtual reality is just one format content producers are keeping a close eye on. However, if they don’t have a supply chain that allows them to test the relevance of new formats and technologies for their audiences and processes, they risk falling behind.

Mr Lepe concludes: “We can enable content producers to compete and operate with the same efficiencies you might see from an Amazon or Netflix by helping them connect their content supply chains and making it easier to plug in new technologies like AI and support for the new formats such as virtual reality.”

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