Cloud Power: Inertia Slowing Widespread Cloud Adoption

IBM's Bob Fox says smaller media companies have been leading the way on new technologies

By Andrea Morabito -- Broadcasting & Cable, 9/13/2012 8:46:11 PM

New York - Inertia may be slowing down the adoption of cloud technologies at media companies, particularly larger ones, said Bob Fox, global industry leader on IBM Global Business Services' telecom, media & entertainment team.

"Anytime you introduce some new innovation, there's always resistance," Fox said in a keynote discussion at B&C/Multichannel News' TV's Cloud Power event here Thursday afternoon. "There's a lot of inertia, particularly in a lot of the larger media companies. The smaller companies, less than $1 billion, are leading the way. They have less to lose but they also have a lot to gain."

But that may be changing. Fox cited statistics from an IBM study that said while most media and entertainment companies aren't using cloud technologies to substantially impact their customer value proposition (only 16% today), 67% expect that to change within the next three years.

"I think the lesson of the last decade for those of us who have been in the industry is it's either change or be changed," he told discussion moderator Todd Spangler, technology editor at Multichannel News.

So far, Fox said companies have mostly opted to stick to the existing distribution channels, like HBO restricting its HBO Go app to cable subscribers instead of offering it as a stand-alone service. But as customers clamor for more choice, networks will have to start deciding whether it's better to have a relationship with MVPDs or to go direct.

"All the companies, no matter where they are in the value share, need to think about what the customer wants," he said. "Again, the last decade shows the customer gets what they want one way or another."

Fox still argued for a role for content aggregators, however, and agreed that TV Everywhere is the correct response to the advent of Internet video and over-the-top.

"Yes it will work, it won't be the only solution. It's a way for the operators to continue to expand their reach and deepen their customer relationship," he said, adding that the ability to target users very quickly on mobile devices will be very valuable.