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September 14, 2021

Pink Skies Ahead for Cloud-Based Production

author
Adrian Pennington
cloud production

As the pandemic pushes remote technologies to the fore, cloud production is undergoing a baptism of fire, according to analyst Rethink Research.

The move towards cloud-based production environments has been rapidly accelerated by COVID-19, forcing the video ecosystem to quickly shift to a new way of working, using cloud-based production techniques to solve the physical separation of their workforce.

“This trial by fire has shown that new techniques can be deployed, enabling new use cases and cost efficiencies inside a typically conservative industry,” the analyst states.

Total production costs in the video industry are expected to grow from $291 billion in 2020 to around $376 billion in 2026. This comprises a lot of costs that are not part of Rethink’s usual technology focus, and so, it calculates that Cloud Production revenues alone will rise from $601 million in 2020 to $2.48 billion in 2026.

DOWNLOAD THE REPORT: Cloud Production Technologies – Market Forecast 2021-2026 (Rethink Research)

Growth is not delineated by regions and will not be until this market has matured significantly.

“A raft of new technologies are taking root, which will significantly alter the production landscape — creating opportunities for those in the distribution realm to have a greater stake in the production market.”

A case in point is the $1.275 billion purchase of production asset management software Frame.io by Adobe. The move signifies the value in video technologies which are cloud native and offered as a service, propelling distributed and collaborative workflows.

READ MORE: WHAT FRAME.IO’S $1BN SALE SAYS ABOUT VIDEO PRODUCTION (IBC 365)

Another company with designs on a $1 billion checkout is Blackbird, developer and patent owner of compression technology, which enables professional video editing (and other workflows) in a browser.

“With few exceptions, any suppliers with outside investors must transition to a SaaS business model as fast as possible to maximize shareholder value,” says Devoncroft analyst Josh Steinhour. “Any technology professional in the media technology sector (customer or supplier) dithering about moving to the cloud is likely harming their organization’s shareholder value.”

That’s strong stuff and the analyst knows it. “To the technology curmudgeons, we grant you there remain technical hurdles preventing all workflows moving there tomorrow,” he pre-emptively counters.

READ MORE: $1.275 Billion: Analysis of Adobe’s Acquisition of Frame.io (Devoncroft)

“But to that same audience, we submit all the corporate value (budgets, senior executive attention, citations in investor communications, etc.) has or will rapidly transition to cloud-based workflows. For those suppliers (and those customers) wanting to enjoy the valuation levels of peers, you need to be in the cloud.”

Such corporate objectives reflect the deeper, operational benefits of cloud workflows.

“A successful SaaS business model requires more than a reference in sales collateral and an uncompelling purchase option in the price list. It is a lifestyle.”

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