Tony Maglio
Jul 12, 2022 10:35 am
@tonymaglio
IndieWire/Midjourney
If you thought there was a part of our lives that Amazon does not (yet) control, let’s talk about the company’s stranglehold on streaming. We don’t mean Prime Video — and we certainly don’t mean FreeVee.
For more than a decade, the blandly named Amazon Web Services (AWS) has been a crucial component for almost every media company. AWS does nothing exciting, yet it controls — well, almost everything. Cloud computing, storage, general computing, content delivery networks, ad tech, and more for a total of 190 services that serve as the underpinnings for life as we know it. And as the streaming business moves toward an ad-supported future, Amazon’s web services are poised to become much, much bigger than Amazon.com itself.
Need to transcode a large movie, something that used to cost thousands of dollars a pop? AWS does that for a buck and change. Ensure that Netflix delivers flawless imagery of “The Gray Man” to Joe and Anthony Russo’s exacting standards? Yup. Deliver DCPs via the cloud to theaters across the country, or 1,600 TV channels to homes everywhere? Sure. Put Peacock on its feet from concept to launch in the space of one year, or rebuild what remained of Fox from scratch after the 2019 Disney takeover? Yes to all, as well as many more workflows that are as invisible as they are essential.
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AWS is not the only company that provides these services — there’s also Google Cloud Platform and Microsoft Azure, with Oracle a close-ish fourth — but it was the first and remains by far the biggest. Analysts at UK-based financial research firm Redburn believe Amazon’s cloud services alone could be worth $3 trillion as a standalone, spun-off company. (It values Azure at $1 trillion, but does not measure Google or Oracle.)
At this writing, the entirety of Amazon.com, Inc., including AWS, has a market cap of $1.12 trillion. IndieWire reached out to reps for Microsoft Azure and Google Cloud Platform with a request for participation in this story, but we did not receive responses.
AWS has a “clear lead in lots of important areas,” Blair Harrison, the CEO and founder of FAST (free, ad-supported streaming television) software company Frequency, told IndieWire. “If you’re in the media space and you’re above a certain size — and that’s not even that big — you’re using AWS for something.”
AWS Virtual Production
Amazon
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Evan Statton, principal architect of the AWS Media & Entertainment division, told IndieWire that his client base tallies “more than 60 partners just in the direct-to-consumer space,” including Netflix, Disney, and Peacock. Statton also said Disney+ utilized AWS to scale its then-nascent streaming business across 59 countries. Today, Netflix and Disney are relying on AWS as they sprint toward the launch of ad-supported streaming and the promise of first-mover advantage.
AWS maintains multiple regions, with four primary zones in the U.S. alone. That means end users like you get higher-quality images and less delay between image delivery and reception. “The customers can come and bring their workloads and feel good about having a resilient architecture,” Statton said. “They trust us with their architecture, and that’s why they’re here.”
Combined, Amazon, Google, and Microsoft account for 65 percent of the $53 billion in global cloud-service spending in the first quarter of 2022, according to Synergy Research Group data. That’s up from 52 percent of global sales in 2018, with sales growing by more than 30 percent year over year in recent quarters as it gobbles up market share from smaller cloud services.
Google and Amazon, specifically, have a “massive advertising ecosystem” to help monetize services like the ones Harrison programs at Frequency. What he calls the “uncountably large business” of advertising is driven by such cloud-computing platforms.
“In a world where the money is all about advertising and advertising is all about context and metadata, the better those services are, the better I’m able to monetize my increasingly diverse inventory,” he said.
In a 128-page report on Cloud Computing, Redburn researcher Alex Haissl noted that “Separating AWS may not be on the table for now, but if the performance gap versus the non-AWS parts continues to widen, it could be on the table further down the road.” He did not venture a guess as to when this could possibly be realized, but when we brought that crazy-sounding $3 trillion spinoff valuation to Statton, he didn’t blink. After all, there are still a lot of workflows to exploit, like those surrounding uncompressed video (typically, video is compressed a few times from origin through the cloud to your house).
“We believe the journey to the cloud for customers is still in its infancy,” Statton said. “We’ve come a long way, but believe that there’s even more to go.”
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This Article is related to: Television and tagged Amazon, Amazon Web Services, AWS
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