Market Insight

FOX chooses AWS to transform its production and distribution workflows in the cloud

December 16, 2019  | Subscribers Only

Andrew Young Andrew Young Associate Director, Research and Analysis, Service Provider Technology
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The FOX Broadcasting Company- not to be confused with the 21st Century Fox assets acquired by Disney - is deploying a suite of AWS services spanning ML (machine learning), packaging, contribution and delivery to manage its sport, news and entertainment content.

For delivery, FOX will employ AWS Media Services to distribute content to its cable and DTH partners, as well as to underpin the firm’s own, direct-to-consumer OTT offerings. FOX’s production workflow will rely on AWS’ Local Zones edge infrastructure, as well as on AWS Outposts on-premises solution. Third and finally, FOX will implement a range of ML-based applications – chiefly Amazon Kinesis and Amazon Sagemaker - to strengthen its analytics, and enhance live video.



The FOX-AWS deal is a milestone for both companies, but more importantly, tells us a great deal about the future of technology procurement, and technology supply, in the broadcast industry. It is important to understand why this deal represents a break with tradition, why FOX has chosen to embrace Amazon’s cloud, and why Amazon’s newfound strength in the media delivery segment threatens to realign the competitive landscape.

To this day, in spite of the advent of mature IP technologies, most broadcasters continue to silo their workflows for one reason: the risk of building a combined OTT and linear workflow is perceived to be excessive. Prompted by the fear of latency, and the ability to monitor adequately stream’s QoS and QoE, the industry has coalesced around two infrastructures. Most media firms employ robust, centralised, legacy infrastructure to manage high-value assets, such as sport. By contrast, these same firms employ decentralized, cloud-based IP infrastructure to manage their lower-value, non-live, on-demand assets.

In this light, FOX’s decision to unify its workflows, forego a piecemeal transition, and shift its infrastructure wholesale onto the AWS platforms is very bold. We believe that FOX’s rationale revolves around three factors, and that these factors are likely to define the future of technology procurement strategies in the wider media industry.

1)    The prominence of 4K workflows, in conjunction with 8K’s advent, has forced networks and channels to confront the limitations of their current infrastructure. The AWS deal allows FOX flexibility in scaling resources to meet this challenge and avoids the waste of running parallel HD, 4K, and 8K workflows for OTT, on-demand and linear.

2)    AWS has conceived a solution architecture that confers two unique benefits. One, the AWS OUTPOST and AWS LOCAL ZONE architecture allows Amazon to reach directly into customers’ facilities, and run its services on locally-hosted hardware and infrastructure. This on-premise design addresses media firms’ persistent latency-phobia, and transforms Amazon from an anonymous data-center provider into a trusted provider of managed services. Two, the hybrid architecture simultaneously exposes key, live assets to the cloud, and in particular, to Amazon’s repository of cloud-hosted ML services.

3)    Amazon is in a position to offer Machine Learning services that presently have few competitors in the video solutions industry. For a media landscape grappling with economic pressure, low margins, and increasingly complex consumption habits, ML has the potential to allow firms to automate workflows, monitor the network, commission content, measure consumption, advertise, and market more cost-effectively and intelligently than ever before. These applications are currently only accessible from the cloud.

Given the FOX deal’s magnitude, and the novelty of the AWS solution, what does Amazon’s newfound video-technology prowess mean for the wider competitive landscape? The firm’s movement into managed services is rife with conflicts of interest, and is also likely to open a new front in the battle for Video Processing spend.

AWS sells services to 3rd party video technology vendors and broadcasters alike. Absent any change in Amazon’s operating structure or strategy, vendors will find themselves competing against their data center provider, while broadcasters will have to bid for premium sports rights against Amazon itself.  It is too soon to tell whether these conflicts will discourage future business; to date, the Netflixs of the world have shown little objection to leveraging AWS infrastructure while competing against Prime Video.

What is clear is that rival vendors will have difficulty matching AWS’ end-to-end video technology ambitions, and that many channel networks and broadcasters are likely to follow in FOX’s hybrid-cloud footsteps.

We believe that on-premises solutions’ share of the video processing market will reduce from 20.9% in 2019 to 17.2% in 2023 while solutions based in the public cloud will increase from 50.0% in 2019 to 57.4% in 2023. It is this share of the market that will disproportionally feed the bottom line of cloud providers that are refashioning themselves as video specialists.

Hybrid and private cloud deployments will make up the rest of the market; hybrid-cloud’s revenue share will decrease from 18.5% in 2019 to 17.3% in 2023, while private cloud’s revenue share will decrease from 10.6% in 2019 to 8.1% in 2023. For hybrid this is due to many seeing this deployment as a steppingstone to full cloud deployment and for private cloud its contraction will come at the expense of increasingly reliable public cloud infrastructure.

As a result, we anticipate the continuing unification of workflows to crystalize around the challenges posed by higher resolutions, continuing economic pressures and by the emerging importance of data workflows and their reliance on ML platforms.


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