The Evolution of the Content and Digital Media Ecosystem

Rory Murphy


Part 1 in a 4-part series

The content and digital media sector is growing rapidly and here at Equinix Europe, in conjunction with specialist research company, IHS Screen Digest, we wanted to look more closely at this phenomenon.

In part 1 of our blog series, we take a look at how the industry is evolving and how careful choice in data centre provides a solid foundation for online service deployments.


Key Points

• The online media sector is a rapidly growing industry, fuelled by the growth in reach and speed of consumer broadband connections. By the end of 2011, 63 per cent of Western European households subscribed to broadband services.

• The media, gaming, gambling and advertising industries reached an aggregate €150bn in value across five European markets (UK, France, Germany, Netherlands and Switzerland) in 2011, with online media representing almost 10 per cent of the sector value.

• There is increasingly complex set of relationships between online service deployments and supporting technologies – including cloud services, workflow solutions, payment gateways, advertising solutions, platform management systems, CDNs and other service components – that mean that online service providers have a host of communication needs with third party systems.

• Appropriate choice of data centre can help organisations improve service performance, as well as reduce costs, by co-locating their core server bases with those of key partners. Data centre solutions provider Equinix has already connected partners such as Facebook and Zynga within its data centres, improving page load times (positively affecting quality of service), as well as reducing transit costs for the companies.

Research Findings

As broadband penetration in Western Europe reaches over 63 per cent of households, and is expected to climb to 70 per cent by 2015, online media services are becoming a force in their own right.

In 2011, the online media and content industry, comprising paid-for audiovisual entertainment, display advertising-funded sites, online gaming and remote/online gambling, reached nearly €150bn in aggregate value across five European markets – UK, Germany, France, Netherlands and Switzerland.

While this figure is still relatively small in comparison to the value of the parent sectors, representing only 10 per cent of media and content revenue across the five markets, growth rates are high for online media, and an increasing proportion of revenue is expected to be derived from the online content industries over the next five years.

However this growth brings with it an increasing degree of complexity. New technologies bring with them new players. Online advertising for instance, has seen a whole host of different companies injected into the value chain, covering measurement of usage, delivery of advertising, inventory optimisation and bidding, amongst others. In other sectors, the situation is no less complex.

Online video service providers are faced with a vast array of connected devices to which they need to deliver content, and may have to integrate with numerous advertising solutions, payment gateways, video platforms, content delivery networks, and even other content providers.

The emergence of consumer ‘cloud’ offers, such as UltraViolet, that give customers the opportunity to upload, store and then watch/listen to purchased content are further complicating the landscape.

But while complexity is bringing additional challenges to the sector, there are also opportunities for companies to ensure that their businesses are well positioned going forward.

Choice of location for core server bases within data centres may not seem the obvious point to start, but through careful choice in co-location solution, companies can save transit costs by directly connecting to the systems belonging to partners sharing the same data centre, as well as reducing latency issues.

In the U.S., casual gaming company Zynga and social network Facebook are directly connected within an Equinix data centre, with the result of lower transit costs and improved latency and service performance.

Coming up in part 2: Why advertising is at the heart of this change.