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Summary

Ovum's 2016/17 ICT Enterprise Insights survey revealed that for more than one-third of premium media asset owners (broadcasters, internet streaming TV and video, cable TV, satellite TV, and telco-OTT), personalized customer engagement will be the top business priority for the next 18 months. This is pushing premium media asset owners to embark on the media transformation journey, to not only enhance tailored offerings for digital users but also drive profitability and sustainability. Furthermore, hyper-personalization of the digital experience for individual users requires major investment into media transformation ICT technology stacks and services to meet constantly changing customer preferences and dynamics. The media transformation ecosystem is highly complex, involving the re-engineering of both the horizontal (cloud, security, internal and shared, and network) and vertical (from content acquisition to engagement) value chain. This is creating demand for ICT service providers such as Nokia to build robust horizontal and vertical capabilities across the digital customer engagement value chain. In February 2017, Nokia's video business division signed a strategic partnership with Eurofins, a digital testing solution and services provider with a strong presence in the broadcast TV and video space. Ovum believes this collaboration aligns with Nokia's media transformation ICT services roadmap, and strengthens its vertical portfolio offering.

Two roadmaps: DIY or best-in-class strategic partnerships across the media transformation value chain

Personalized digital customer engagement is central to the growth strategies of most premium media asset owners, and this is paving the way for large ICT service providers such as Nokia, Huawei, Ericsson, Cisco, and Atos to build their media transformation value propositions (both platform and ICT services offerings). The two broader roadmaps followed by these ICT service providers across the horizontal and vertical value chain are as follows:

  • Do-it-yourself (DIY): building end-to-end in-house capabilities leveraging organic and inorganic channels (M&A).

  • Best in class: a tier-1 partner-led cooperative model.

Nokia is slowly but steadily building a strong media transformation ecosystem based on tier-1 strategic partnerships and alliances for its flagship Cloud DVR, Velocix CDN, and system integration ICT services. Due to its legacy focus on the downstream media transformation value chain (which includes content personalization, distribution, and user engagement modules), its collaborations mostly relate to network, UX applications and devices, encoding, and online video delivery. The recent strategic partnership with Eurofins offers the following:

  • a gateway to QoS/QoE ICT services deals across the broadcast TV and video space

  • a pre-bundled offering to lower total cost of ownership (TCO) on the testing workflow by 25–30% due to reusability of test planning and scripting

  • Eurofins' flagship end-to-end automated testing tool, TestWizard, with a comprehensive platform-based professional services portfolio.

With the Nokia partnership, Eurofins is expected to

  • increase its EMEA digital service provider (DSP) footprint

  • migrate to a collaborative revenue stream due to access to Nokia's tier-1 ecosystem including UX apps (Oregon, Evergent), digital rights management (Irdeto, PlayReady), online video delivery (Ericsson's Mediaroom, Comcast Technology), and encoding (V-Nova, Harmonic)

  • accelerate time to market, leveraging Nokia's end-to-end system integration (SI) portfolio in the long run.

As premium media asset owners embark on the media transformation journey, ICT service providers building their ecosystems via a cooperative model should focus on tier-1 partnerships across the vertical and horizontal value chain to improve their long-term competitive advantage.

Appendix

Further reading

Media Transformation Services: A $25bn Roadmap, IT0006-000294 (January 2017)

"Eurofins strengthens digital testing automation footprint in the Nordics with Labatus acquisition," IT0006-000300 (October 2016)

Media Transformation ICT Services Forecast: 2016–22, IT0006-000298 (August 2016)

Author

Kedar Mohite, Senior Analyst, Media & Broadcast Technology

kedar.mohite@ovum.com

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