THE CENTRAL PLAYERS IN THE INTERNET OF ENTERTAINMENT
We have now discussed the implications of the Internet of Entertainment on infrastructure, the Internet system, and TV. What will such a system look like? Who will be the main players in it? The emergence of centrifugalism in hardware, software, content, and interactivity leads to the emergence of new types of integrators.
These integrators will be some form of what is today called ‘clouds’. It is a continuation of concept that earlier was called ‘time sharing’, ‘grid computing’, ‘utility computing’, ‘thin clients’, ‘terminal computing’, and ‘network computing’. The words change, the players rotate, but the basic idea is constant, that a user obtains computing resources such as storage, processing, databases, software, networks, and platforms from somewhere else.On the consumer side, a cloud might start out as a content provider, such as Pandora or Spotify for music. It might then expand to provide storage services such as music ‘lockers’ of users’ content, such as Apple iCloud, Google Music, or Amazon Cloud Player. Server farms are at the heart of clouds. In most cases, such server farms are offered by third parties to users, whether small or quite large, and to smaller clouds. Apple’s 500 000 ft[1] [2] iCloud and iTunes facility in North Carolina was constructed at a cost of $1 billion. Other cloud providers include the following (Statista, 2015):
• Amazon Web Services (AWS) is the largest cloud service provider by far and consequently owns the biggest server infrastructure. Launched in 2002, AWS provides online services for other websites or client-side applications. AWS powers thousands of companies, including Netflix, Instagram, Pinterest and NASA. Its estimated share of the ‘infrastructure as a service’ (IaaS) market is about 28 percent.
• Microsoft offers Windows Azure to enterprise customers and Skydrive to consumers (16%).
• IBM SmartCloud has a big capacity and growth rate (12%).
• Google owns the largest number of physical servers in its 40+ data centers. However, only a small fraction is offered to outside customers (4%).
• Oracle (Private Cloud) has about 3%.
• Rackspace (2.5%).
• Facebook has a growing capacity.
• Big telecommunications operators have acquired cloud providers, for example, Verizon with Terremark, Telefonica with Acens Technologies, and CenturyLink with Savvis.
These are clouds as infrastructure providers. Several of them also host second-tier media clouds that might be active in the media sphere, such as those of content-oriented companies without the technical orientation like Netflix or Hulu.
There are several reasons why an entertainment-based Internet system will lead to cloud-based video media (Noam, 2014):
2. Convenience: As everything electronic - even kitchen appliances - gets connected with everything else, things get complicated, and it is more effective to let the IT professionals do it from a distance. In such a scenario, consumer electronics move from consumer electronic hardware to consumer electronics as a cloud service.
3. Legal and regulatory coordination: As mentioned, each country has its own rules, and it is unrealistic to expect these rules to be the same worldwide. Attempts to ‘harmonize’ will only result in acrimony, delay, disappointment, and unstable compromises. More realistic is to expect that different countries will have diverse arrangements. But there is another possibility, the possibility of going through intermediaries who would tailor the material to comply with the various national laws before it goes to that country. This could be a cloud’s function. These intermediaries could be large and sophisticated enough to be able to deal with the multiplicity of national rules. There are economies of scale and scope in compliance, for example because of the indivisibility of legal advice.
4.
Financial flows: The various suppliers of special modules, whether they provide services, copyright licenses, apps, transmission, or storage require compensation from users or each other. Once the linear relation of a specific user consuming the product of a specific provider is replaced by a multiplicity of interacting users consuming and engaging with a diverse and changing menu of elements, financial flows need to be channeled through intermediaries. In other cases, some financing support will be extended by cloud providers to the producers of content, software, and applications, in the same way that Hollywood distributors pre-finance independent film production.5. Privacy and security: From the perspective of content providers, a cloud arrangement helps protect copyrighted materials from piracy in comparison to physical media such as DVDs. A cloud provider can offer sophisticated security handled by expert security staff. It can monitor user behavior and based on such awareness provide security alerts.
6. Marketing, branding, and quality control: In a world of online abundance, the screening function of an intermediary is valuable.
To conclude, people have argued for a long time that the future of media will be one of domination by the traditional large, vertically integrated media conglomerates. But it may be more likely that the key media institutions of the future will be the cloud companies as the central integrators of the system. Some of them might be traditional media companies that have moved into technology. Others will be tech companies that have morphed into media. Google and Apple are the most obvious examples. A third category is hybrid ‘tech-media’ firms such as Netflix. And the fourth are the network platform providers as they move beyond pipes to apps and cloud services.
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