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Global Media and Entertainment Industry Cloud Services

In order to manage the growth of digital media applications, as well as the increase in online video consumption on multiple screens, the media and entertainment industry must balance the need to support complex production and distribution-oriented IT workflows with an uncertain product revenue potential.

Cloud services offer an attractive solution to this dilemma, as they can help all types of media and entertainment companies to automate their business processes and workflows more effectively -- because they're more scalable, flexible and reliable in the cloud.

These agile cloud solutions are also more cost-effective and convenient, since they do not require any upfront infrastructure investment and can be paid for according to usage or through a subscription model.

According to the latest global market study by Frost & Sullivan, they found that this nascent cloud services market earned revenue of only approximately $100 million in 2013, but will grow nearly nine-fold by 2020.

Their market study covered specific well-established classes of media and entertainment oriented cloud solutions -- such as video transcoding, animation tools and media asset management; as well as niche solutions like metadata, closed captioning, and subtitling services.

Although North America is presently the biggest market for media and entertainment solutions in the cloud, the Asia-Pacific region is expected to open up the most opportunities for solution providers over the next five years.

Established IT vendors such as Amazon, Adobe and Microsoft are leading the media and entertainment cloud market. The three vendors constitute 34.5 percent of the market. However, smaller vendors with niche specialization are also growing in the evolving marketplace -- companies such as Prime Focus.

Cloud Service Market Development Challenges

"The constant pressure to decrease IT budgets and invest resources in generating high-quality, creative content is driving media and entertainment companies globally to adopt cloud solutions," said Avni Rambhia, principal analyst at Frost & Sullivan.

This growing market demand, along with the need to maintain data on the cloud to prevent data losses due to natural catastrophes, is boosting the prospects of cloud solution vendors in the media and entertainment sector.

But the IT leadership of legacy media companies -- that are typically accustomed to having on-premises systems -- are wary of embracing the cloud in a large way. Concerns surrounding the lack of high-bandwidth internet connectivity in some parts of the world are preventing the market from reaching its full potential.

However, service providers are responding to these challenges by creating more awareness on the apparent benefits of cloud solutions and allaying fears regarding the security of content on the cloud. They are also deploying open hybrid cloud platforms that can be easily integrated with the customer's existing on-premise data center infrastructure.

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