When I state that media and advertising will start sucking up obscene amounts of processing, storage and bandwidth to become one of the largest vertical markets for cloud computing offerings, I expect some cloud techies, and perhaps a few Adweek readers, will raise their hands and say: "Wait a minute. Media and advertising firms don't have gigantic data processing operations like pharma or defense. Why care about cloud computing, especially right now when media and advertising are gasping for breath?"
Fair question -- here's the bottom line. A significant illustration is the way cloud computing will revolutionize how consumers experience video content on the Web, their phones and their networked consumer electronics. When that happens, television and film -- along with the advertising they carries -- will flip from being a mass-market proposition to becoming a targeted, direct-to-consumer proposition.
This isn't semantics. Print publishers ignored how Web technologies changed how people "read" text. Now, newspapers, magazines and the book industry are retrenching in order to survive. MP3s, file sharing and the iPod changed how people "listened" to music. The incumbent music industry has become a shadow of its former self.
Back to video: The television and filmed entertainment industries are next to be disrupted. To be fair, video executives tried to learn from the struggles of print and music. But most video executives searched for a video "killer app" like BitTorrent, which they could buy or sue out of existence.
However, cloud computing isn't a killer application but a "killer environment" for media distribution and consumption and therefore advertising and marketing. That's a lot bigger.
Cloud computing comes into focus only when you think about what we always need: a way to increase capacity or add capabilities on the fly without investing in new infrastructure, training new personnel, or licensing new software. From a technical point of view, cloud computing involves access to high-performance computer storage, processing and network resources as a service delivered over the Internet and charged according to use.
Cloud computing hits both sides of the ledger. First, it dramatically changes the economics of operating and scaling an interactive HD-quality multimedia network. Second and equally important, cloud-native media is more likely to act like software than a piece of content. By that I mean that media on the cloud carries with it the ability to transact -- for money, for attention, for ID, for anything that makes sense from a social and/or business point of view.
A changed cost base combined with a new platform for innovation via the cloud creates a bellows effect that injects true electronic commerce into media and advertising.
New media cloudonomics matter. Cloud computing enables anyone to access the video production, editing and distribution firepower of today's broadcast networks at a fraction of the cost. Scores of cloud-based video providers are fielding complete systems for managing, syndicating, analyzing and monetizing video and other multimedia assets. These systems ride on server, storage and networking infrastructure rented from giant data center owners like Amazon, Cisco, Google, HP, IBM, Microsoft and Sun. Tailored services are then provided to end customers as usage-based, on-demand offers that can be charged to a credit card or another simple payment scheme.
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