2024 Trends to Watch -TV & Video Technology

1. www.sganalytics.com www.sganalytics.com 2024 TV & VIDEO TECHNOLOGY Resilience, interoperability, technical debt, and localization key ICT accelerators www.sganalytics.com 1

2. 2024 Trends to Watch: TV & Video Technology In 2024, the global media & entertainment (M&E) segment is likely to reach US$2.53 trillion, i.e., roughly 2.36% of global GDP (PwC’s Global Entertainment & Media Outlook 2023–2027, June 2023). The market is estimated to grow at 4.1% annually. However, media enterprises are steadily witnessing margin pressures attributed to the emergence of newer audience engagement touchpoints. These touchpoints include FAST channels, sports franchises, D2C platforms, super aggregators, and AVOD services. Additionally, viewership fragmentation has drastically increased the cost of customer and content acquisition alongside paving enterprises to improve on safeguarding their profitability eventually. For example, Netflix’s net margins were down to 18% (Q3 2022: 19%) in September 2023, and Disney witnessed a decline in profitability to 4% compared to 5.3% (as of Q2 2023). Furthermore, the vibrant competitive landscape and the growing need for increased operational productivity at a lower total cost of ownership (cost synergies at scale) will be pivotal factors in influencing growth and technology roadmaps for most media enterprises in the next 12 months. A good example is vendors reducing technical debt and enriching interoperability to witness higher adoption and penetration globally. 2024 top business priorities According to SG Analytics 2024 media technology survey, approximately half (49%) of the respondents highlighted the top 3 leading business priorities as: Providing a unified content supply chain to lower technical debt Exploiting newer monetization avenues to safeguard profitability Streamlining workgroup collaboration to accelerate operational efficiencies These priorities align with the current strategic initiatives, such as improving cost synergies and enhancing the bottom line. In November 2023, Disney announced a second cost- saving intention of around US$2bn with a total goal of US$5.5bn. www.sganalytics.com 2

3. 2024 Trends to Watch: TV & Video Technology Chart 1: Top business priorities of media enterprises in the next 12 months (2023– 24) Converged content search, syndication, and discovery to accelerate single media asset… 3% Remote device management 2% Ultra-low latency enabled premium experience across parallel markets (live gaming, betting etc) 3% Improve operational productivity via streamlining workgroup collaboration and… 16% Cognitive services (AI) enabled metadata enrichment for all TV & video asset repositories 14% Exploit newer monetization channels (FAST, Super aggregation, etc) to safeguard margins 16% Local and regional content version creation at scale via synthetic media 11% Unified TV & video supply chain to lower technical debt and TCO 17% Automation and orchestration of TV & video supply chain to enhance efficiencies 14% Unified data management to improve time to market 5% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% Source: SG Analytics media & broadcast technology vendor survey, n=14 (October 2023) Additionally, media consumption platform ecosystem fragmentation paves the way for building newer monetization and engagement touchpoints, enabling a competitive edge. This has been one of the leading target arenas for media enterprises for almost a couple of years. However, with changing financial health, including the rising cost of content acquisition, meeting strategic goals might demand a shift in their technology procurement roadmaps. In 2023, the focus on time to market (TTM), ultra-low latency, and single media asset personalization has slightly reduced attributed to the diversification of revenue mix and preserving active subscriber base without offsetting premium quality of service (QoS) is becoming the de facto norm. These changing dynamics will be eminent in media technology vendors’ workflow positioning and value propositions over the next 12 months. www.sganalytics.com 3

4. 2024 Trends to Watch: TV & Video Technology Universal workflow as a service ecosystem to emerge as a prominent differentiation strategy Hybrid deployment configuration to accelerate Enriched partner marketplace to improve the IT share of wallet per customer Local version creation at scale as a sizeable technology opportunity HYBRID DEPLOYMENT CONFIGURATION TO ACCELERATE Globally, media enterprises created islands of automation attributed to their siloed best-of-breed technology procurement approach. This approach leverages on-premises infrastructure for legacy (linear) business activities while embarking on the cloud journey for their new-age business (non-linear-SVOD, TVOD, and AVOD). With the advent of newer vertical monetization avenues, such as OTT linear, FAST, etc., leveraging multi- faceted discrete workflows from linear and non-linear ecosystems further increases the complexities. Chart 2: A simplified illustration of islands of automation within an indicative media enterprise On-premise with non-core applications in the cloud (combination of lift and shift to native architecture) Linear TV Supply chain (ingest to playout) Integration layer Unified cloud TV & video platforms or best of breed cloud (combination of lift and shift to native architecture) Non-linear TV supply chain (capture to engagement) Fast, Ott liner leveraging discrete workflows (OS, UI, middleware etc) across both liner and non-linear ecosystems Source: SG Analytics (November 2023) www.sganalytics.com 4

5. 2024 Trends to Watch: TV & Video Technology This has created enormous inefficiencies and added higher overhead costs around ICT services centric to maintenance, support, upgradation, and integration on a year-on-year basis across parallel content supply chains. Furthermore, the adoption of the hybrid technology deployment model surge is attributed to the demand for resilient infrastructure to provide uninterrupted premium audience experience across multi-faceted distribution avenues. These avenues include FAST 24/7 lean experience and OTT linear. A good example is a couple of Ateme’s customers who embark on the FAST (24/7 lean experience) journey need an elastic and redundant content supply chain are gradually shifting back to hybrid workflows to meet meet these changing requirements. Another example is the localization of content repositories at scale has become pivotal for media enterprises to provide a homogenous experience ‘Anywhere Everywhere’ to a single audience. This is pushing most of VoiceInteraction’s customer base to embrace a hybrid close captioning solution to improve long-term efficiencies. ENRICHED TO IMPROVE THE IT SHARE OF WALLET PER CUSTOMER Media enterprises are pushed toward standardization and orchestration (14% of respondents) of their content supply chain to enhance operational efficiencies alongside resource utilization rates. Thus, technology vendors are steadily embracing this requirement. For example, Zixi’s SDVP tightly integrated four modules across the media value chain, supporting 17+ industry standards, open source, and protocols to streamline live transport on IP. Most media technology vendors have been addressing this need on a siloed basis for a couple of years. However, it has been insufficient with the emergence of newer distribution, monetization, and engagement touchpoints. Thus, enriched partner marketplace evolution will be essential for accelerating interoperability challenges and enabling vendors to enhance the IT share of wallet per customer in the long run. Historically, TV & video vendors have built partner-led marketplaces to strengthen customer retention rates. A good example is Kaltura’s video marketplace woven around enterprise use cases like townhalls, lecture capture, and virtual meeting rooms. Partner marketplaces have been instrumental in generating strong revenue growth for vendors within this space. However, these partnerships are on an occasional basis rather than sustainable engagements—tailored customer-specific alliances. SG Analytics believes that as enterprises move towards building a tightly integrated content supply chain, the demand for technology deployments via marketplaces will surge across the media space. However, this will also need technology vendors to carve a niche positioning for their partner marketplaces to achieve a competitive advantage in 2024. www.sganalytics.com 5

6. 2024 Trends to Watch: TV & Video Technology Chart 3: Accedo’s sustainable marketplace Source: Accedo, SG Analytics (November 2023) In September 2023, Accedo launched its flagship sustainable marketplace ecosystem for broadcasters, and media enterprises at the forefront of embedding ESG among the core vendor selection criteria across its technology procurement roadmap. Accedo provided almost one-third (32%) of its partners with sustainability accreditation based on five basic criteria: DPP Committed to Sustainability Program, SBTi committed, CDP score, UN Global Compact membership, and sustainability annual report. For media enterprises it enables to make decisions based not only on product features, but also on sustainable KPIs to cover carbon emissions reduction, audience influence, and community impact. For vendors it assists in improving each customer’s IT wallet share. Building enriched partner marketplaces will emerge across the media technology space in the next 12–18 months, i.e., super aggregation, quantum computing, and low code no code. www.sganalytics.com 6

7. 2024 Trends to Watch: TV & Video Technology UNIVERSAL WORKFLOW AS A SERVICE ECOSYSTEM TO EMERGE AS A PROMINENT DIFFERENTIATION The converged TV & video value chain has been one of the top business priorities for media enterprises in the last 3–5 years, with 17% of respondents highlighting it as the most important attribute to rising technical debt in 2024. Technical debt has risen across most media enterprises predominantly due to their historical best- in-class siloed procurement approach, resulting in multi-generation technology stacks deployed by diverse vendors for a single workflow. Some examples include: Example 1 Example 2 One of the largest film studios in the US has multiple regional and local media asset management (MAM) systems integrated with a single master MAM across discrete generations (first and second), deployment configuration (on- premises, hybrid, and SaaS), and vendor portfolio. One of the leading hyper digital content owners in Western Europe with horizontally integrated business activities across linear, FAST, OTT, and social networks utilizes five technology vendors for its live and video-on-demand (VOD) editing functionality across premium (mainly sports & time bound events), long- form (entertainment catalogs such as film, originals, and TV shows), and short-form (teasers, trailers, and social & marketing videos) repositories. Over the last 2-3 years, some vendors have been aggressively horizontally integrating their offerings to address the technical debt complexities via inorganic mode. This integration includes the ease of retaining software developers to upgrade, maintain, and support multi-dimensional stacks within a single enterprise. Some relevant examples include: Example 1 Example 2 Synamedia’s purchase of Utelly (content discovery), Quortex (video processing), and ContentArmor (anti- piracy services) Amagi’s recent acquisition of Tellyo (cloud production) and Streamwise (video analytics) www.sganalytics.com 7

8. 2024 Trends to Watch: TV & Video Technology Although this approach is still insufficient, SG Analytics believes that universal workflow as a services ecosystem will evolve in the next couple of years across each module within the content supply chain. For example, one of the leading DRM vendors roadmap on building a Universal Security Manager offering enterprises with solutions and services beyond content protection, i.e., cyber threat, app shielding, data security, etc. Alternatively, MediaKind recently launched the Wave module to assist digital service providers (Telco, cable, and satellite TV operators) to unify distribution workflow (IPTV, steaming, etc.) facilitating into multi-screen ultra-low latency Everywhere (less than a second) i.e., Universal Distribution Manager roadmap. Overall, these universal ecosystems will enable enterprises to lower TCO and drastically reduce technical debt on a long-term basis, i.e., resource availability and skillset optimization. Chart 4: Universal workflow as a service ecosystem’s illustrative examples Universal Security Manager CAS DRM Watermarking Anti-piracy Network End point App shielding Data Cyber threat Universal Scheduler Manager Liner OTT FAST Social video Marketing video Enterprise video Religious TV Source: SG Analytics (November 2023) www.sganalytics.com 8

9. 2024 Trends to Watch: TV & Video Technology LOCAL VERSION CREATION AT SCALE IS A SIZEABLE TECHNOLOGY Cost-effective reach and scalable premium quality of engagement (QoE) are flagship key performance indicators (KPIs) for today’s connected media enterprises. Additionally, the sharp decline in audience attention span has accelerated investment into short-form videos, thus driving long-term spending on technology enabling multi-faceted single media asset version creation (as highlighted by 11% of respondents). Furthermore, additional drivers for uptake of content localization services in the next 12–18 months are: Increase in viewership of tier-II and tier-III sporting events across multiple TV & video screens Launch of in-house D2C (OTT) platforms by sports franchises and teams in the last 12–18 months Royalty-free synthetic media repositories (images, videos. audio, soundtracks, and mock-ups) pre- configured with pre- production workflows Vubiquity is at the forefront by offering nearshore managed services (SLA backed) content localization value proposition, pre-configured metadata (MetaVu), and title (AssetVU) management add-ons to optimize costs without offsetting scale. It has also extended its local lab as a service footprint into newer markets like Cyprus, India, and London, in 2023. As media enterprises move toward OTT 3.0 to carve niche market positioning and maintain current audience bases, content repository localization via a language- centric framework will not suffice. Therefore, embarking on the version creation 2.0 journey with vendors offering cognitive (AI/ML) managed and monitoring services will be essential to enhance sustainability. www.sganalytics.com 9

10. 2024 Trends to Watch: TV & Video Technology ABOUT THE Kedar Mohite • Vice President (Media & Entertainment ICT research & consulting practice) Kedar Mohite heads Media & Entertainment ICT research & consulting practice at SG Analytics. He has been Principal Consultant with Omdia (Ovum) focusing on media & broadcast technology arena for over a decade. His area of focus includes media technology and ICT service developments across broadcasters, digital service providers, sports franchises, OTT, publishing, and enterprise video segments. Kedar is a regular speaker at IBC, NAB, and vendor-sponsored industry conferences, and his work has been cited by the BBC, Wired UK, IBC.org, and Business Wire. He holds a Master of Science in Business Administration degree from the Norwegian School of Management BI. www.sganalytics.com 10

11. 2024 Trends to Watch: TV & Video Technology Life’s possible WWW.SGANALYTICS.COM SG Analytics, a Great Place To Work®(GPTW) certified company, is one of the leading investment research and analytics firms offering high-quality, end-to-end research solutions to global capital market participants. With presence in India, the UK, Europe, the US, and Canada, SG Analytics has been consistently meeting and exceeding customer expectations by its knowledge-based ecosystem and impact-oriented solutions. Pune | Hyderabad | Bengaluru | London | Zurich | New York | San Francisco | Toronto | Amsterdam | Wroclaw www.sganalytics.com 11