Photo: Priyanka Parashar/Mint
Photo: Priyanka Parashar/Mint

The future of TV: Cloud-based broadcasting

There are several advantages of cloud-based servicesnotably, since the service is software-based, one doesn't need a physical location to run the operations

Amagi Media Labs founders Baskar Subramanian, Srinivasan K. A. and Srividhya S.—the three engineer-entrepreneurs—have yet to find time to celebrate the new investment in their media tech firm. On 15 December, Emerald Media—the pan-Asian platform established by global investment firm KKR & Co. for investing in the media and entertainment sector—announced that the company was acquiring a significant minority stake in Amagi, which works in the space of targeted television advertising and cloud-based TV broadcast infrastructure. Premji Invest, the investment arm of Azim Premji (an existing shareholder), also participated in this combination of primary and secondary $35 million Series D round. (Mayfield India and Nadathur Holdings continue to remain invested in the company.)

What attracted Emerald Media to Amagi was primarily its cloud-based broadcasting technology that the KKR company’s managing director Rajesh Kamat thinks is “transformational".

According to Subramanian, cloud-based services virtualize the whole broadcasting operation. Currently, the company is delivering channels in 25 countries through such a platform. For instance, the Bollywood film and music channel B4U sits on an Amagi platform in London where its scheduling is done, while its content is pushed from Mumbai. The channel beams into India, the UK, Canada and Singapore even as it is monitored in Bengaluru.

“We are what is between the broadcaster and the operator—we replace the optic fibre or satellite. The broadcast service is delivered through an Internet cloud. It is completely virtual," he says.

A virtual platform, as is self-explanatory, requires no physical infrastructure. It took Amagi two years to prototype the software-based system before launching it two years ago.

Currently, the company manages 50 channels globally, including from television networks such as Bloomberg and Scripps. Back home, its services are sought by news channels NDTV and Times Now for their feeds to West Asia.

There are several advantages of cloud-based services—the key benefits are that the service is software-based, so one doesn’t need a physical location to run the operations. As a result, real estate, infrastructure and manpower cost reduce dramatically.

That is not all. The technology also makes a strong case for pop-up channels, basically allowing broadcasters the opportunity to experiment with their channels without the fear of steep costs.

For instance, if a Bollywood film channel wants to check if it has a market in the US, it can use the cloud-based technology to launch without adding to its cost by leasing a satellite for a minimum of three to five years.

Clearly, cloud-based broadcasting opportunity allows for a quick turnaround time, including the ability to create and dismantle channels quickly. Lastly, it also makes remote management and transparency possible. “You can be anywhere and monitor the channel on a browser," says Subramanian. “It democratizes the whole thing."

To be sure, cloud-based broadcast services is not what brought Amagi into the limelight. It first started life as a company that makes geo-targeting possible for television channels. It has the technology which makes viewers in two different geographies see two different ads even if they are watching the same channel.

As mentioned in this column earlier, currently, geo-targeting contributes to a very small portion of the TV advertising pie, but industry participants expect its share to increase significantly, according to the KPMG-Ficci report titled ‘The Future: Now Streaming’, released earlier this year.

For geo-targeting services, Amagi is working with more than 3,000 advertisers. It has also introduced geo-targeting technology for the over-the-top (OTT) video streaming services of television channels. Currently, it has OTT clients in the UK and the US. In India, it plans to aggregate 40-50 online TV channels and deliver them to advertisers in the next three months.

Kamat at Emerald Media, which plans to invest $15-75 million in companies in the media space, explains that the deal with Amagi was stitched on the basic premise that viewership is moving online.

“Amagi is in businesses that will expand as brands want sharper targeting—obviously TV channels will have no choice but to go for geo-targeting. In geo-targeting, you can target a Nalli saree ad in Chennai and Coca-Cola ad in Mumbai on the same channel in the same programme," he says.

Besides, he believes that its cloud technology will transform traditional broadcasting as cloud-based feeds of TV channels come at a meaningfully lower cost.

However, despite the investment, Subramanian and his partners are not getting into the celebratory mood in a hurry. “Our milestone is our growth," he says. “We believe in celebrating when we win customers and not when we win investors, although it is an important step for us."

Shuchi Bansal is Mint’s media, marketing and advertising editor. Ordinary Post will look at pressing issues related to all three. Or just fun stuff.

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