Executive Summary: ISG Provider Lens™ Media and Communication Services - U.S. 2022
To download the report for all quadrants, click the PDF on the right or the contact now button for access.
The individual quadrant reports are available at:
ISG Provider Lens™ Media and Communication Services - Communications Business Services - U.S. 2022
ISG Provider Lens™ Media and Communication Services - Media Business Services - U.S. 2022
ISG Provider Lens™ Media and Communication Services - Media Next Gen IT Services - U.S. 2022
5G and OTT need scalable and agile digital solutions.
The outbreak of the COVID-19 pandemic accelerated the consumption of over-thetop (OTT) platforms, further accelerating the disruption of the well-established media and entertainment business ecosystem. In addition to streaming new content, many OTT players act as distributors, pooling content from different media companies and offering it to their customers seamlessly. End users in this rapidly developing ecosystem will require robust content management systems that automate the content supply chain and royalty rights without disrupting the quality of experience (QoE) of their customers.
While in its infancy, the rise of the metaverse is expected to have significant implications on the way content is consumed. As it continues to mature, the metaverse will require solutions that can address storage requirements and improve interoperability in a multivendor environment.
During the pandemic, most enterprises in the U.S. adopted the work-fromhome model. Consequently, there was significant strain on networks due to the surge in traffic. Network operators experienced a deterioration in QoS and QoE because they were unable to efficiently scale their infrastructure. Their challenges were exacerbated as they strived to rollout 5G services.
The rollout of 5G services in the U.S. is, however, not as pronounced as it is in other regions that already have a well-established telecom infrastructure in place. This is because the second generation of LTE networks, which are already rolled out in U.S. markets, have speeds that are almost comparable with those offered by 5G networks. Given its proclivity to support a larger number of devices, 5G would instead be suited for highly automated industries that would need a private network, one that has a significantly high bandwidth that can support large volumes of automated devices and sensors.
Significant constraints to the rollouts of such private networks include interoperability issues that arise during integration, and the costs associated with the overhaul of legacy components already embedded into the network. There is still a significant push for the deployment of 5G services in the telecom sector, with many tests and pilots being carried out for private networks. However, the costs associated with rollouts and decreasing ARPUs are a huge deterrent. To reduce customer churn and improve ARPU, telecom operators are adding other value-added services such as financial services. The inclusion of payment systems such as digital wallets, however, leads to a significant transformation of the telecom company’s operations support system (OSS) and business support system (BSS).
With increasing demand for enhanced customer experience, the media and communications industries must focus on improving the quality of network services to ensure that the overall satisfaction of customers is exceeded consistently.
The following key trends were observed during the last year:
• Cloud transformation services: Telecom operators are under pressure to deploy telco clouds to enable technologies such as virtual network functions (VNFs), thereby improving resiliency and service availability. End users, particularly from the telecom industry, would prefer a hybrid, multicloud approach over a public cloud transformation, as many of the core components of their network continue to be on-premises. The cloud ecosystem has given an unparalleled advantage to OTT players over their counterparts in the legacy media space. To stay apace with the OTT ecosystem, legacy media companies are looking for solutions that can efficiently migrate most of their infrastructure to the cloud. The demand for scalable infrastructure and storage solutions on the cloud will increase further, with the emergence of metaverse.
• Software-defined network (SDN) capabilities: The rollout of SDN, and its subsequent evolution to softwaredefined wide area networks (SD-WAN), software-defined local area networks (SD-LAN) and intelligent edge, is an important enabler for next-generation networks such as 5G. The technologies redistribute control from the core of the network to the edge, thereby significantly improving agility. The importance of intelligent edge compute will increase with the proliferation of low-latency applications for the 5G network.
• High degrees of automation and AI: Technologies such as AIOps, cognitive automation and robotic process automation are used by end users across the media and communication industries to achieve rapid digital transformation of their business and IT operations. Automation and AI-based methods enhance network orchestration and reduce human intervention, thereby improving the revenue margins of the end users. Also, automation technologies, coupled with enhanced data analysis, are used extensively in services such as royalty rights management.
• End-to-end consulting services: End users participate in a market characterized by significant customer churn and limited customer growth. The deployment of next-generation IT services such as 5G requires high levels of capital expenditure from operators to make it commercially viable. Consequently, service providers are witnessing a shift from traditional relationships with end users to a more collaborative one. This shift is characterized by a surge in interest in digital consulting services, which templatize the business transformation based on the nature of end user and the adoption of value and outcome-based revenue over fixed revenue models.
• Increase in security across networks: Telecom operators and media companies in the U.S. have become targets of cyberattacks and disinformation campaigns. Therefore, companies are investing in solutions that can analyze threats and achieve zero-trust protection of endpoints across the cloud and legacy data center infrastructure.
• Blockchain: Media companies are analyzing blockchain technology benefits and applications in the industry’s service lines, such as digital rights, content management and payment gateways. Large companies are incubating or acquiring small blockchain specialists to enhance their business transformation capabilities.
• API- and microservices-based architectures: While the media and communications landscape continues to evolve, end users will require an open architecture built on APIs to diversify their services. Microservices form an indispensable part of the modern and complex media and communications network architecture. They support the design and implementation of edge services for IoT applications.
• Data monetization: Media and communications end users leverage powerful, data-driven solutions to derive meaningful insights from unstructured data from different sources. Use cases involve governance, royalty rights, personalized engagements with customers and opportunities to upsell and cross sell more efficiently. Besides using data to improve QoS, telecom operators monetize IoT data from different enterprises to unlock revenue opportunities.
Access to the full report requires a subscription to ISG Research. Please contact us for subscription inquiries.