The business of creating and delivering content and digital media is changing – and fast.
Long gone are the days when there was a single, siloed approach to producing content and distributing the finished product to consumers and enterprises. Now production and distribution companies and workflows are digitally transforming the way they do business through the utilization of new, efficient content creation and content distribution digital platforms based upon private Interconnection. These platforms are created through Interconnection of the media enterprise to supply chains, clouds and network to support emerging business and operational models.
These transformational digital platforms require high levels of private Interconnection to all participants in the ecosystem in order support collaboration and workflow requirements of low-latency and high performance. Using private, low-latency Interconnection, a platform can be optimized for: the transport of digital source files; editing and enhancement and; production of the finished product. And then, using private and secure Interconnection to Network Service and Cloud Service Providers, the finished product can be delivered for consumption anywhere, anytime and on any device.
The explosion of Interconnection-based platforms can be seen in the overwhelming growth in Interconnection and bandwidth requirements for the Content and Digital Media (CDM) sector. According to the second annual Global Interconnection Index (the GXI), the CDM sector will be a major consumer of Interconnection Bandwidth, with a projected 41% CAGR from 2017 to 2021, reaching 761 terabits (Tbps) by 2021.
Interconnection Bandwidth by Industry Type
The GXI, a market study published annually by Equinix, delivers insights that drive digital business advantage by tracking, measuring and forecasting growth in Interconnection Bandwidth – the total capacity provisioned to privately and directly exchanged traffic with a diverse set of counterparties and providers at distributed IT exchange points inside carrier-neutral colocation centers. By 2021, the GXI Volume 2 estimates that installed Interconnection Bandwidth worldwide could reach 8,200+ terabits per second (Tbps), a fivefold increase over five years, with double-digit growth across all industries.
Trends driving Interconnection growth in Content and Digital Media
Changing media consumption habits are only part of the picture. There are a few other macro trends reshaping the industry.
- Digital video on new consumption and OTT platforms continues to rise requiring network optimization to solve latency issues. Cisco predicts that 82% of all global Internet traffic will be video by 2022.i Video streaming will remain strong, while live Internet video and video on demand is starting to take off. Scaling to meet these increased demands will mean getting closer to users and partner ecosystems to guarantee superior content production and delivery. That’s why content providers such as Discovery Communications, Selevision and Netflix are turning to private direct Interconnection across their ecosystems to ensure a seamless streaming experience.
“With Equinix, we can operate in close proximity to many of our top network service provider partners, with access to a platform that ensures the most streamlined path between our content and our end users.”
VP of IT Operations, Netflixii
Traditional media creators and distributors aren’t the only ones participating in this new paradigm. Enterprises are becoming contributors too as they look to deliver multimedia rich, customer-first digital experiences over emerging platforms. To deliver branded video and interactive content across varying devices and geographies, enterprises and advertisers will directly interconnect to platforms and Content Providers. This is expected to drive the need for Interconnection Bandwidth by a whopping 52% CAGR between 2017-2021.
Interconnection Bandwidth by Ecosystem Counterparties
- Explosive digital disruption in Latin America is presenting new revenue opportunities for CDM companies. As service providers continue to invest in infrastructure and media companies continue to partner for content production,distribution and the creation of new digital platforms, Latin America (LATAM) remains one of the fastest growing regions of the world for the CDM sector in terms of projected installed Interconnection Bandwidth capacity. Expected to grow to 267 Tbps by 2021, at a 63% CAGR, it is the largest industry segment in LATAM.
A case in point is when Movile, the largest children’s educational digital platform in LATAM, needed to scale their infrastructure to accommodate rapid growth without compromising the end user experience. Low latency and high availability were key requirements for delivering a high quality user experience. Working with Equinix, Movile re-architected their digital edge for growth by implementing a hybrid cloud architecture based on AWS Direct Connect that established a private and secure network connection. The result was that they trimmed latency by 70% and realized significant cost savings.
“Low-latency is a critical factor to our business’ success. The AWS Direct Connect allowed us to render optimized, secure, and consistent performance to all of our customers.”
VP Flavio Tooru, Movile’s Infrastructure Manager
In other global regions, only the U.S. edges ahead on projected installed Interconnection Bandwidth capacity of 299 Tbps by 2021, but at a lower growth rate of 31% CAGR. Europe comes third, where the sector is projected to grow to 105 Tbps, with a 42% CAGR, followed by Asia-Pacific at 90 Tbps, with a 35% CAGR projected by 2021.
- Gaming and shopping is going mobile….even more, uncovering new challenges in network latency and increased vulnerability points as content and data is distributed across many different counterparties. Mobile game revenue is projected to grow to 59% of the entire gaming market, or $106.4 billion, by 2021.iii Online shopping continues to skyrocket as well – over $14 billion was spent this holiday season on the three key days (Thanksgiving, Black Friday and Cyber Monday), more than double what it was in 2014.iv To have a stake in these growing markets, it’s critical that gaming companies and online store platforms deliver an optimal experience to their users with reliable connectivity, security and zero downtime through private Interconnection.
As an example of how gaming companies can leverage Platform Equinix®,
NHN Entertainment Singapore had a requirement to go-to-market within an aggressively short timeframe of just three months to meet a game launch deadline. By deploying a node in Singapore, NHN was able to expand the availability of its gaming services in Southeast Asia while optimizing performance. Interconnection to multiple network providers enabled NHN to optimize transit routes, minimize lag time, improve the delivery of its services and save significant costs by offloading 68% of gaming traffic.
Staying on the map with Interconnection
Shifting consumption patterns and other trends are putting Content and Digital Media companies under increasing competitive pressure to create and deliver high-quality, relevant content to users on any device, anytime, anywhere. Staying on the map requires being close to where content is being created and consumed for analytics, creation, monetization, personalization and distribution. Decreasing distance equals lower latency, higher performance and greater security, whether you are preparing to launch the next binge-worthy hit with an ecosystem partner or actually binge-watching it over a weekend.
Leveraging an Interconnection Oriented Architecture™ (IOA™) strategy and Platform Equinix® helps CDM companies leverage the power of Interconnection to achieve their goals, many times for less cost. You can download blueprints for Content and Digital Media and Content Delivery use cases by accessing our IOA Knowledge Base.
To learn more about how Interconnection can help CDM companies stay on the map, check out the Content and Digital Media Playbook.
Download the Global Interconnection Index for more information on Interconnection growth trends by region, vertical markets and vital ecosystem partners.