IBM Quietly Builds Its Video Cloud

Like its competitors, IBM is acquiring and building a video stack.

Instead of focusing on media execution, however, IBM is using Watson and data analytics to improve the relevancy of video content, ads and delivery models.

“In ad-supported video, how do you make ultra-targeted ads tailored down to the individual for customer acquisition?” said David Mowrey, VP of strategic planning for IBM Cloud Video. “In the subscription video-on-demand world, you might have to make really complex decisions about user experience to [stave off] churn.”

IBM has filed video patents for decades, but it only formalized its Cloud Video unit about a year ago.

IBM Cloud Video combines video assets from acquired companies like Clearleap, a streaming video workflow and monetization tool, and Ustream, a live video-streaming platform. Clients include Lionsgate, Scripps Networks Interactive and Viceland.

Mowrey spoke with AdExchanger.

AdExchanger: Why build a video cloud now?

DAVID MOWREY: The acquisitions of Clearleap and Ustream, along with Aspera, which IBM bought three years ago [to support] storage and encoding for large video files, was IBM recognizing that 80% of traffic over the Internet in the next couple of years will be video. 

Who’s buying IBM Cloud Video? Does it also have a services component?

IBM has a big media and entertainment vertical, but there are a number of teams within IBM that can leverage the technology. We have a big IBM Cloud sales organization, as well as Global Business Services, our consulting arm. There are a number of routes to market. Another area I’m personally focused on is technology channel partners and the partner ecosystem that IBM develops through resellers and distributors.

Are you competing with other marketing clouds, or video platforms like Comcast/FreeWheel?

The video ecosystem is so spread out, so it depends on which part of it we’re targeting. For basic blocking and tackling, storage, encoding and content delivery, sure, there’s overlaps and competition. There’s some [competition] with technology that determines the best way to acquire customers, [like] Comcast/FreeWheel.

Adobe is a really big partner of IBM’s, so with any of these things, there’s overlap here and there, but overall, we are a good strategic fit with these companies.

How does IBM differentiate?

We have a big data and cognitive computing platform, which we made a huge effort to blend into our video services in 2016. Everyone is talking about artificial intelligence, but as far as blending it into our platforms and providing unique value to our clients, we feel we’re very ahead of the market there.

Can you give an example of advanced data-decisioning in video?

One example is content acquisition. You’ve got content producers and acquirers/aggregators, and there’s an exchange of content for fees, whether it’s carriage agreements with operators or Netflix buying a set of movies from a studio.

And there’s this whole economy around how you create content and for which platforms. Content distribution is worth billions of dollars. It’s anywhere from 60% to 90% of the budget for anyone distributing video content, whether they own it and distribute it to creators or they’re buying it from the content holders.

What types of licensing decisions would IBM help a media company with?

How do I decide who to sell my content to? Will it be a global or regional deal? Who gets the video on a set-top box or mobile phone? How much should I pay for content? Those decisions are largely done on gut feel today. And I’m not discounting that, because there are people who have been in this business for decades and who have tons of experience, but if you ask them how you make those decisions, they say, “I’ve been doing this for a long time.”

So you’re saying data isn’t being used to its fullest potential in present-day TV licensing deals?

There’s massive amounts of data in the ecosystem that’s not being leveraged, in terms of understanding how people consume video. Or metadata around what content exists in a catalog or other people’s catalogs. Then there’s insights into what subscribers are doing. When did they sign up? Was it under a trial scenario? When have they churned or resubscribed?

How does streaming video on demand (SVOD) affect that decision-making?

Consumers’ time is being segmented among many different platforms, and everyone is jumping into the OTT space.

And to compete in that, you need a few things: You need to own your own data. Some platforms do, and some don’t. Companies can keep giving their content to aggregators like Amazon and Netflix, but that’s not necessarily a good, long-term strategy because it really helps those companies optimize their services, not the media company.

So if you’re a media company, what do you do?

A lot of video investment dollars will go toward figuring out which product development decisions or offerings to make based on real-time viewing and usage patterns. Amazon can take shopping data and put that toward a music or video service, but pure media companies don’t have that same volume of data. So I think we’ll see media companies get smarter about the optimizations they do make with data.

Interview edited and condensed for clarity and length.

This post was syndicated from Ad Exchanger.