For Broadcasters, A Shift To Managed Services Can Secure Profitability

Media companies are thinking carefully about their next steps in terms of investment. In a tougher economic climate, many business leaders are looking to reduce their operational expenses and total cost of ownership to help secure profitability. Some are even wondering if they overbuilt their tech stack in the first place.

Part of this rethink is due to slowing consumer spend in the media sector. According to a recent report by PwC, although total global media and entertainment revenue hit $2.32 trillion in 2022, this was half the pandemic-fuelled growth rate of the previous year, and its analysts forecast sequentially declining growth rates through 2027, where revenue is set to grow just 2.8%.

As consumers contend with squeezed home budgets and look for more affordable access to streaming video content, media companies are pivoting their technology strategies towards a managed services model, enabling greater flexibility, operational efficiency and profitability.

Tackling Market Complexities With Simplified Workflows 

Let’s face it: Assembling and managing all the elements required to deliver a full streaming tech stack is incredibly demanding. And as new viewing models, technologies and audience expectations evolve, organizations need robust and futureproof streaming workflows that can stay ahead of the curve and support any business model.

As media leaders wrestle with declining linear viewership and navigate increasing online video consumption across SVOD, AVOD, FAST and OTT platforms, this complexity has blurred the lines for some media brands that may feel they have stepped outside of the heart of their business. Some may have tried to deliver a product or service which doesn’t align with their in-house expertise and run into difficulties.

The business rationale for managed services is fairly straightforward. Partnering with a managed services provider means broadcasters, content owners and rights holders can focus on the core of their businesses while scaling their operations and reducing pressures on shrinking teams. They can sidestep the expensive and time-consuming process of managing complex vendor ecosystems and intricate technology workflows, allowing them to concentrate on content and audience strategy instead.

Flexible Technology Foundations Drive Real Business Outcomes

Media brands understand the need to experiment with multiple business models and price points for consumers while launching new services quickly. In an environment where time-to-market is critical, media companies need time- and cost-effective ways to design and deploy full-stack streaming workflows to underpin any service model.

Many organizations will already harness solutions from partner vendors or a mix of vendor and in-house technology to support their current needs. Working with a managed services partner that can piece together each element of a streaming workflow and integrate with existing infrastructure and preferred third-party solutions provides the much-needed flexibility and efficiency that business leaders require, as well as simplifying painstaking custom integrations to support specific, unique requirements.

Folks at media organizations don’t have the time or the resources to manage an ever-growing number of vendor partnerships, especially when they’re looking to quickly build and deploy new streaming workflows on deadline and on budget. Giving media businesses one centralized point of contact and seamless access to pre-integrated partner solutions eliminates the headaches of multiple vendor integrations, de-risking and streamlining operations while saving customers time and money.

The Business Case For Managed Services In 2024

Right now, the media industry is being pushed to adopt new approaches to the age-old problem — how to maximize revenues while keeping costs to a minimum. The current questions around buy vs. build are part of the same conversation: Does it make sense to develop our own technology and commit to owning the entire workflow? Or should we partner with a proven provider with best-in-breed solutions and scalable technology?

More and more, major media brands are opting for the latter via a managed services approach to reduce complexity, scale their teams and secure long-term profitability.

Eric Black is CTO and GM media of Edgio.