Whitepaper: Equinix Provides a Digital Ecosystem Approach to Support a New Era of Broadcasting

Introduction
The media and entertainment industry is undergoing fundamental transformation. Change is occurring across key M&E segments including movie production, gaming, streaming media, and broadcasting. This evolution encompasses the emergence and growth of new digital services, consumer behaviors, and monetization models. As legacy models move to obsolescence, M&E ecosystem participants must embrace change and prepare for the future.

Part of embracing change is carefully evaluating how M&E transformation drives the need for digital infrastructure to support the new demands on the industry. In addition, a prerequisite to
participating in this transformed industry is having access to platforms and connectivity that enable applications to streamline the delivery of new digital services everywhere content consumers are located. This platform and connectivity access is a fundamental resource in delivering new customer/consumer experiences.

A New Era of Broadcasting
For the purposes of this paper, broadcasting is broadly defined to include TV, movie, and other video content distributed over the air (OTA), via traditional pay TV services (pay TV), and on the internet (OTT). Within the context of M&E transformation, broadcasting has moved into a new era. This era is characterized by rapid service evolution in which legacy models give way to new forms of distribution and monetization. Key facets of this evolution include:

» Erosion of legacy distribution. Cord-cutting, in which consumers cancel pay TV in favor of OTT options, is real and accelerating. In the United States, cord-cutting has already reduced the pay TV subscriber base by nearly a third over the past seven years. The disruptions caused by cord- cutting are vast as media companies require new content distribution strategies and pay TV providers transform service and bundle offerings. Rapidly changing consumer expectations and emerging digital services require the media and entertainment industry to embrace new digital strategies to survive.

» Live TV moves to OTT. One driver of cord-cutting is the growth of live TV distribution over OTT platforms. Some services seek to replicate the offerings of traditional pay TV and give
consumers increased choice and improved user experiences. These services, often dubbed vMVPDs, or virtual multichannel video programming distributors, demand scalable and reliable
digital infrastructure that support both live and on-demand streaming.

» Direct to consumer (DTC) emerges as a critical strategic priority.As legacy distribution declines, media companies are becoming dependent on and increasingly investing in DTC
services. DTC requires that media companies take responsibility for content distribution technology decisions rather than rely on legacy pay TV or OTA strategies.

» Global expansion. The distribution of content to a global audience is not a new requirement or business priority. However, with the growth of DTC, global distribution is less about inking deals with pay TV providers around the world and more about making sure technology partners and DTC digital infrastructure have global reach.

» Hybrid business models. The diversification of business models used to be tied to distinct distribution platforms. Today, that diversification must exist within services that increasingly offer paid, ad-supported, and free content tiers. Paid models include subscription and transactional video on demand.

» New content aggregation models and creator ecosystems. The erosion of video aggregation through traditional pay TV providers creates opportunities for new aggregation models that combine OTT services within a common user interface and subscription management platform, distribute content from third-party creators, and offer bundles of individual services.

User Experiences
These facets of market evolution dovetail with the transformation of user experiences. Any serious contender for market share across the competitive video services ecosystem must deliver a minimum quality of service, which requires the support of technology partners that possess digital infrastructure. Other elements of user experiences, however, are forward looking and blend optimized experiences today with pathways to future differentiation, service enhancement, and monetization opportunities. Following are examples of how the market evolution and new user experiences increase demands on digital infrastructure:

» Scalability and reliability. Quality of service remains critical. As M&E strategic priorities shift and new services emerge, best-effort video delivery is insufficient to meet consumer and
competitive demands. The elements of scalability and reliability are of increasing importance as subscriber bases and audiences grow, consumers demand higher-quality video, and real-time advanced services evolve.

» Device reach. OTT service evolution is inherently multiplatform as consumption takes places on mobile and nonmobile devices. Reaching each viewing environment requires support for a
diverse ecosystem of consumption devices. For services to be successful, supporting technology solutions must enable seamless consumption across all the major platforms and devices in and
out of the home.

» Video quality. In today’s competitive environment for video services, high-definition content is already giving way to 4K Ultra HD. Over time, higher-quality video such as 8K will be the
norm. Standard functions such as adaptive bit rate encoding, which ensure a graceful degradation of quality to prevent a stream from being interrupted, will now blend with increasingly higher bit rate files to drive increased demands on digital infrastructure.

» Data-driven personalization. User experiences have long focused on content discovery, user profiles, and personalization. Data-driven optimizations of these experiences, along with personalized marketing and advertising, will leverage solutions powered by artificial intelligence (AI) and machine learning (ML) while being dependent on network performance.

» Advanced experiences. As services evolve to be inclusive of augmented and virtual reality, elements of gamification, and betting, new demands will be placed on networks that need to support real-time and bandwidth-intensive experiences. Similar demands will be placed on digital infrastructure as content creation workflows move to cloud and virtual environments.

Definitions

» Direct-to-consumer (DTC) services are OTT services offered by media companies directly to consumers rather than through an aggregator such as a pay TV provider. They can feature both
on-demand and live content.

» Over-the-top (OTT) services are offered via the internet and bypass traditional distribution systems such as OTA broadcasting infrastructure and cable or satellite TV.

» Video on demand (VOD)is commonly referred to as a type of OTT service in which content streaming is initiated at the request of the viewer. VOD is further categorized by primary business model types: paid subscription (SVOD), advertising supported (AVOD), and transactional purchases and rentals (TVOD).

» Virtual MVPD services are OTT-based multichannel video programming distributors, more commonly known as pay TV. Services feature live linear TV programming but may also offer on-demand content.

» Core resources are centralized locations that house compute and network infrastructure. Often referred to as datacenter resources, these can be owned and operated by a multitenant datacenter owner/operator, a service provider, or an individual organization.

» Edge resources are distributed locations that house compute and network infrastructure to support workloads with performance and latency requirements. These can be enterprise- owned remote sites or locations provisioned from a service provider that enable compute resources to reside closer to sources of data.

» Ecosystems refer to a collection of partners, products, or services that work together to improve and streamline processes.

Importance of Access to (and Participation in) a Digital Platform
Creating and delivering content on a broad range of devices, in any format, anywhere in the world puts exponentially greater demands on the compute, storage, and connectivity
infrastructure supporting this activity. Media and broadcast industry providers are facing competitive pressure to deliver innovative and seamless customer experiences. Creating these next-level experiences requires access to modernized digital infrastructure and a digital platform that enables rapid, cost-effective connection to content consumers. A global platform will be a requirement for many organizations as they seek to deliver new digital media experiences everywhere. The innovations underway are escalating the need for edge compute resources to gather, analyze, and store data across a myriad of edge compute locations.

Need for Edge Resources
Modernized edge resources underpin the rapidly increasing data volumes required to support multichannel, on-demand content access. Two years after the emergence of the global
pandemic, the M&E industry is still building on the vast growth of video traffic seen in 2020. During that period, the total volume of video delivered in the United States increased more than 60%, with growth posted for all consumption devices (phones, TVs, PCs, and tablets).

The demands on the digital infrastructure will continue to expand. Digital infrastructure is often required in close physical proximity to where data is being generated and consumed, making edge resources necessary. In addition to aggregating and protecting data and content, modernized digital infrastructure, often in edge locations, is required to support the new ways customers interact with and access content. These edge resources often need a high degree of programmability and the ability to support advanced workloads and process data in remote locations. AI technologies will increasingly be adopted to improve content quality and identify potential connectivity anomalies that could result in service interruption. These capabilities often require highly scalable and open resources that can leverage data that resides in cloud service provider environments.

Critical Roles of the Digital Platform and Ecosystem
Supporting the new demands of the broadcast industry is a heavy lift for organizations that plan to build their own resources to create and deliver new customer experiences. Beyond the
increase in compute horsepower, the connectivity resources needed to rapidly extend the delivery of content in a cost-effective manner is a challenge for all. The broadcast industry is rapidly adopting a new approach to tackle the demands for personalization. These demands require access to a network that can support these highly personalized experiences. However, content and digital media creators are not operating with unlimited budgets.

Content and digital media creators need access to infrastructure and a platform to store, secure, and transport digital media. As the data volumes expand to support an extensive array of delivery formats, the industry needs a fast, cost-effective means to connect content with consumers. Programmable, opensource, software-defined resources are emerging as a viable way to enable content and digital media creators to meet the demands of the M&E industry transformation.

Critical qualities of the infrastructure and platforms needed to support M&E transformation include the following:
» Support for hybrid, multicloud architectures. New digital capabilities are often highly interdependent. Low-latency access to cloud resources is essential to digital-first business and
operations. The ability to leverage data across multiple cloud platforms and hybrid architectures will ensure longevity and relevance for the new digital services being created.
» Low-latency transmission of data. Both content creators and consumers have an insatiable demand for quality and speed of service. Getting content into the hands of producers and
editors for collaboration and creation requires a low-latency network. Pushing that content to consumers also requires rapid transmission capabilities. As content and media expand beyond
entertainment to training and other applications that require near-real-time experiences, performance needs will continue to escalate. Augmented reality–infused applications and
immersive experience applications will drive even greater demand for low-latency data transmission.
» Cost-efficient means of transmitting data. New digitally driven services will be evaluated on their ability to drive better experiences. Most will also be closely measured by their ability to prove return on investment. Industry participants must work within the confines of budgets to deliver the best performance possible.

» Cloud-adjacent innovation. Deploying infrastructure near cloud hubs not only reduces transmission costs but also provides an opportunity to connect data and applications for
continued innovation.
» Ability to access ecosystems and extend anywhere people are and data resides. Having access to a network to support content consumers anywhere in the world requires working across
multiple connectivity partners and regional borders to deliver a seamless experience. The complexity of establishing networks and interoperability across multiple paths and regions
makes a connectivity platform partner central to success.

The most frequently cited challenges as organizations seek to innovate and shift to a digital-first strategy are integrating legacy infrastructure with new infrastructure and provisioning secure
and resilient resources everywhere data and workloads reside. As organizations explore their options, providers that help bridge the gap between legacy and modernized environments will positively impact transformation outcomes. For many, the need to extend IT service and support to new edge locations introduces a level of complexity that inhibits forward progress. For these reasons, investing in scalable platforms and participating in trusted ecosystems are the only ways to achieve the performance and reach necessary to compete.

Benefits of a Digital Ecosystem and Platform
Delivering exceptional experiences is at the heart of the M&E industry transformation. The right technology decisions are crucial to this effort. Broadcasters, content owners, and media companies need to move away from legacy distribution and toward robust DTC services and applications. Service competitiveness is a necessity and requires the right digital infrastructure to support content creation and delivery across multiple modes and channels. As the velocity of market transformation increases, this infrastructure must be nimble, adaptable, and able to support global reach requirements. This is no small feat and requires a high level of coordination to move data anywhere around the world. Often, this means working with multiple connectivity partners as well as provisioning compute and storage infrastructure in new locations.

By participating in digital ecosystems and platforms, M&E providers can tap into greater sources of technical expertise that alleviate some of the growing pains that come with
transformation. Another significant benefit to locating digital infrastructure next to cloud hubs is the ability to connect with data and applications for continued innovation.

As the industry continues to transform, the proximity to cloud providers will expand opportunities for new services. For many organizations, working with a partner and leveraging
the broader digital ecosystem will address both the skills gap and the financial burdens of change. Having access to digital infrastructure resources and an interconnected platform enables content creators to focus on their core competency of creation and developing new customer/user experiences. A partner can provide a highly programmable platform that streamlines the logistics and complexity of extending these experiences anywhere content is being consumed.

About Equinix
Equinix provides organizations with the digital infrastructure, platform, and connection to the edge that is central to delivering exceptional customer experiences. The company has built a
global ecosystem that supports customers as they shift to digital-first business. With more than 240 datacenters across 66 markets in 27 countries around the world, Equinix helps companies
scale globally to strategic markets while ensuring low latency and high performance. The company has developed a strategy for transformation that is backed by experience helping many industries and customers shift to digital first. Equinix takes a practical approach to solving the complex logistics of provisioning infrastructure, platforms, and ecosystems. Equinix views the digital core, digital ecosystem, and digital edge as the key components needed for M&E transformation:

» Digital core. The digital core is where organizations establish the foundation for their digital platform. This can include corporate network, multicloud, and regional back-end data
infrastructure locations. Interconnecting the digital core removes traditional technology limitations. For the M&E industry, the digital core creates a bridge from legacy to modernized
environments by taking a hybrid infrastructure approach. With a digital core in close physical proximity to cloud providers, M&E organizations can quickly and cost effectively interconnect with the rest of the ecosystem.

» Digital ecosystem. The digital ecosystem refers to locations close to specific digital marketplaces where businesses can access new capabilities and services. For the M&E industry, access to this ecosystem enables streaming services, OTT, and MVPD providers to connect to each other for content distribution. For content creators and content delivery networks (CDNs), this enables a one-to-many connection that ensures greater security and performance.

» Digital edge. Digital edge refers to locations close to centers of revenue and operations and with high concentrations of end users. For M&E providers, access to this digital edge provides
remote, distributed infrastructure that is needed to interact with end users or consumers of data. Internet service providers, internet exchanges, and CDNs all help deliver content.
The company has built digital core resources that create a bridge between existing legacy architectures to more modern, open, and scalable architectures. Equinix Fabric is a networking
technology that allows customers to connect directly and securely on demand to providers and counterparties across Equinix’s global platform. Equinix Metal is a highly automated and interconnected bare metal service that allows customers to deploy a physical infrastructure presence at software speed across Equinix’s global footprint.

These resources help organizations modernize their environments with a hybrid approach to infrastructure. Many organizations today struggle with complex, fragmented global infrastructure across private and public environments. Equinix’s resources are designed to bring together digital infrastructure from multiple providers, distributed regions, and hybrid, multicloud architectures. With resources near cloud providers, organizations within the Equinix digital core can connect directly with cloud providers, partners, and customers.

For M&E providers, Equinix’s digital ecosystem includes streaming services as well as OTT and MVPD providers. The interconnected nature of this ecosystem allows providers to connect with one another for content distribution. By helping customers place infrastructure wherever they need it, Equinix enables rapid physical and virtual connections to a vast global ecosystem. For
content creators and content delivery networks, the one-to-many distribution enabled by the Equinix ecosystem supports greater performance and better security.

Challenges
As media and entertainment providers lean more on Equinix to deliver exceptional customer experiences, they will focus on their core capabilities of establishing new ways to connect with
customers and providing more immersive experiences. These experiences will require exponentially more bandwidth and speed, fueling an ever-increasing appetite for connectivity resources. As consumer/user demand continues unabated, Equinix will need to continue to invest in technologies and paths to enable the increasingly immersive experiences being created.

Conclusion
The media and entertainment industry is undergoing a fundamental shift to deliver new and innovative content consumer experiences. The shift from live TV to OTT, the direct-to- consumer model, and new content aggregation models and creator ecosystems are some of the innovations that depend upon digital infrastructure and platforms. Creating these next-level experiences requires access to modernized digital infrastructure and a digital platform that enables rapid, cost-effective connection to content consumers.

IDC believes that success in the media and entertainment industry will continue to be defined by participants’ ability to leverage digital infrastructure to support new customer experiences. As this industry continues to transform, organizations are embracing a strategy that enables them to operate in a hybrid, multicloud environment. Embracing this strategy is the first step; mastering the logistics will be what separates the winners from the runners-up in this highly competitive market. To the extent that Equinix can help M&E providers master the complex logistics of the industry’s transformation, the company will have a significant opportunity for success in the market for M&E transformation.