Network operators, handset manufacturers, media and entertainment (M&E) companies, and Internet/search players are trying to figure out how best to offer "any service, over any device, at any time."
Though it is an admirable goal, it is nearly impossible for any one stakeholder to accomplish alone. To possess the network, management systems and expertise to execute and track all the transactions and processes on both the content-creation side and the distribution side are too much for one company.
Network operators already struggle to manage numerous "moving parts": the service management layer, the network, the routers, the servers, the IT clouds and the high-bandwidth devices. Add to that mix the different characteristics of Ethernet, WiMAX, VDSL, XPON, EDGE and Wi-Fi, and it’s easy to see they already have their hands full.
The M&E companies also have a struggle. For example, a studio no longer can just create a movie, seal the film, and mail it. Instead, it must create not only high-definition feature formats for theaters, but also short-form video format for three-to-five-minute movie trailers to be shown on a 3G multimedia service like Verizon’s V CAST. The behind-the-scenes encoding and transcoding to accommodate different screen sizes, handset formats and media reader protocols are not easy tasks. Add to that the need for vigilance in managing DRM and intellectual property, and it’s clear that managing each piece of content is challenging.
By themselves, network operators are too monolithic and slow-moving to link up with all the stakeholders in the value chain, and E&M companies don’t have the network expertise or the billing-and-settlement capabilities to create such a value proposition on their own.
"The Middle Man" Can
Consistency and simplicity in deployment and management of content definitely would pique the interest of not only the incumbent network operators, but the principals in Hollywood or Bollywood, as well as the music juggernauts like EMI, Sony or Warner, and gaming giants like EA and Blizzard. Consistency would mean faster rollout times and synchronized launches of innovative devices and 3G services. There would be greater opportunity to monetize services like FiOS or IPTV on a global, rather than locale-by-locale, basis.
Systems integrators (SIs) recognize the eyebrow-raising potential and a few are talking about building logical networks on their own dime. Rather than each side in content delivery having to re-invent the wheel, SIs increasingly believe they are in the ideal position to create logically interconnected global networks that will connect carriers and M&Es. They already possess the expertise to interconnect different physical networks since they already do that when leasing capacity or networks from other carriers.
Through private content-delivery networks (as opposed to public Internet-based CDNs from companies like Akamai or Limelight), SIs can create an "ecosystem" or "clearinghouse" through which sophisticated global distribution would take place. Then, M&Es could pay premiums for prioritization of their traffic over what amounts to virtual "private toll lanes." Such prioritization would expedite the transmission of large-scale content "packages," as well as enable carriers to expedite the rollout of value-adds on top of the network. The carriers could "hang" security, AAA, QoS, single sign-on, user access, and billing and settlement off of the SI-created "ecosystems." These logical networks also could circumvent controversial net neutrality and peer-to-peer issues, becoming somewhat of a "back door" for carriers to reach content owners. That would be compelling particularly for carriers trying to balance net neutrality obligations with the inherent need to make money for their stockholders by moving higher up the stack to applications and services.
Accenture's Greg Douglass |
"The studios and music labels that produce content want relief. They have an obligation to digitize content, but they don’t want to be responsible for making the content work across hundreds of different devices. It’s a non-value for them," says Greg Douglass, global managing director of Accenture’s media and entertainment practice. "Their main competency is creative in nature; it’s just not in their DNA to reach outside of their specialties."
These studios, record companies and gaming companies are under growing pressure to deliver content quickly and over multiple devices. If a "middle man" can facilitate the creation of private tunnels between M&Es and distribution channels, there might be a chance to get M&Es to pay premiums for prioritization of their traffic.
Accenture believes network operators should jump in to offer "industrial-strength" storage and manipulation of content as a service to M&Es. "The network operators could be the ‘Federal Express’ of the digital supply chain. They don’t have to care about what is in the ‘package’; they just have to pick it up and deliver it from A to B as efficiently and safely as possible."
For SIs, the network operators are coveted partners since they possess what everyone else in the value chain needs: the network. It is not feasible for SIs, or Internet, or M&E companies to build out networks of their own. Already burdened with having to lease network capacity and networks from carriers to serve their customers, it’s a natural next step for them to try to integrate with network operators.
If one looks at the SI model on a macro level, it’s easy to see how we can provide a holistic view of the networks, the management software and business applications. It’s not such a stretch to see how carriers can create value-added layers on top of the logical network to drive more traffic to their own networks and services.
"The network operators are famous for standardization, so they can work to standardize how content comes in, how it’s encoded and transcoded, and how the end-party can pay for it," says Douglass, noting carriers either can buy the software from the SI, or have the SI do the transcoding and encoding behind the scenes. "It would be the carrier who could brand the ‘complete services’ to the M&E stakeholders as part of their premium services offerings. For example, a Verizon could do the transformation of iTunes for use on V CAST and other distribution channels like Amazon or Best Buy through the central clearinghouse," he explains.
Zooming In
With a vision of helping carriers monetize content for their own services, Accenture started setting the stage in the beginning of 2007.
Accenture acquired French company Digiplug in March 2007 to secure the ability to conduct mobile-content repurposing and distribution services for M&Es. Accenture knew the acquisition could set the stage for its Accenture Digital Media Services, created later in the same year to help content owners and distributors optimize how they store, manufacture, distribute, track and exploit digital content.
Thus far, Accenture works with approximately 100 carriers around the world to deliver ringtones, movie trailers, games and other content to consumers. Consequently, it has developed software and expertise for transforming content generated by movie studios and record companies for use on different types of media recorders. Whether Codex, Windows Media or Real Player, each possesses its own protocols for capturing images and sound from cameras and recording devices.
As the ecosystem evolves, network operators could help a company like Accenture deliver the billing-and-settlement piece. "Content producers have no interest in handling the financial transactions that take place between themselves and someone like an iTunes or Blockbuster.com," says Douglass. Because carriers already possess the systems that can track the transactions flowing over their networks, Douglass believes it is the network operators that can broker transactions and track content. "If iTunes people have to pay a Warner Brothers X amount of dollars as part of a contract, it would be valuable to know that 26 movies were encoded into 48 formats. All the data needed for that type of value-add service freely flows over carriers’ networks today," adds Douglass.
The next question becomes one of whether the content owner pays for the overall service, or whether the cost is passed to the end user. That seems to be a piece of the puzzle that network operators, M&Es and SIs need to figure out.
There’s no doubt content producers would like to leverage carriers’ supply chains, and there’s no doubt carriers would like to leverage SI relationships with broadcasters, music labels, movie studios, social networking sites, Web portals and content publishers. Whether the SI "middle man" can chaperone each side at a reasonable cost remains to be seen. Regardless of who initiates the relationships, it’s likely the costs will be defrayed by passing them on to customers. The SIs will have to be smart about price points for creating these private logical networks, and the carriers will have to be smart about how much of the cost they can pass on to consumers of their premium services.
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Accenture www.accenture.com |
