Cloud Economics and Cost Savings for Post-Production

Change is inevitable, and media companies need to adapt, evolve, and innovate if they want to stay competitive and relevant. The reality is that change is often met with resistance, especially when it comes to major adaptions to ways of working and central infrastructure, such as moving operations to the cloud. This is typically true on all levels right through to the C-suite. However, there’s one magic word that tends to break down those barriers at board level and usher in transformation: savings. But words on their own are not enough, numbers speak louder.

Naturally, advocates of cloud services say that operating in the cloud reduces cost when compared to on-prem but concerns about controlling cloud costs and lack of visibility over cloud services persist. So how can media companies be sure that transition to the cloud will bring cost savings? In this blog, using some real-world examples, we’re going to explore how moving post-production systems to the cloud really impacts the bottom line.

We have a lot of conversations with media companies about whether a cloud model can deliver cost savings over a more traditional on-prem model. The answer to this is, yes it can (when done well), but equally, if a company doesn’t fully understand how cloud models need to operate for maximum efficiency, then possibly not.

For post-production operations to be cost effective in the cloud, it’s critical that unnecessary costs are avoided, and workflows are streamlined. This means ensuring that: cloud storage solutions align with a company’s specific data needs; workflows are optimised for the cloud; and resources are effectively monitored and managed.

Media organisations should choose the right cloud platform or combination of storage solutions that align with their specific storage needs, considering factors such as data volume and usage. Getting this right helps to avoid unnecessary cloud storage and egress costs. Post-production workflows should be optimised for the cloud to enhance productivity. This may involve migrating editing and media processing tasks to the cloud, particularly when the cloud offers capabilities that streamline processes.

It’s also essential to have centralised oversight and monitoring of cloud resources, particularly in the context of editing in the cloud. This visibility helps in managing workstation usage efficiently, avoiding fees for idle workstations, and ensuring that workflows are as efficient as possible.

To help one of our customers understand potential post-production workflow cloud costs, we created a baseline cloud costing model based on real consumption data. This proved to be an important part of defining the business value in switching from the current model to a cloud centric one. It also helped to highlight the changes needed in workflow and operational model to efficiently support a cloud centric model.

To create the baseline costing model, we assumed a 100% move to remote editing in the cloud so mapped editing workstation profiles to EC2 instances (virtual instances running on Amazon Web Services (AWS) infrastructure) and calculated the costs of their use per hour. Alongside the cost of remote workstations, we also calculated associated cloud costs, those being for core infrastructure, streaming egress, as well as the use of our remote edit workstation management platform Lens. This enabled us to estimate cloud costs over the course of a year.

To enable a cost comparison with the existing on-premises model to be carried out, we also estimated on-prem costs over three and five-year periods. For on-prem costs, we calculated CAPEX costs in terms of hardware and OPEX costs including networking, BLAM runners, connectivity, virtualisation, storage, workstations, and support. Electricity costs were also factored in.

We found that the cloud model produced 33.67% cost savings over a three-year term. With a cloud model, the focus moves from CAPEX (like a traditional model) to OPEX. In this case, looking at OPEX alone, the cloud model works out at costing 3% more annually than the on-prem model. This is to be expected because the cost savings are all in CAPEX.

While cost savings are often the most compelling reason for transitioning post-production operations to a cloud model, it’s crucial to remember that the benefits of such a move extend way beyond the bottom line.

A critical point to understand, which is not reflected in the above figures, is that although OPEX may increase with a cloud model, your operational efficiency also increases. This makes the direct cost comparison more difficult, although it does add more weight to the cloud model side. Improved efficiency is also not the only benefit that is difficult to quantify. Other benefits include increased flexibility, scalability, and enhanced collaboration and accessibility, but a discussion on those is for another time!

At 7FiveFive, we combine a high level of technical, business, and industry knowledge together to deliver complete service-led system integration for the broadcast industry. We help our customers transition into next generation technologies and workflows, where it will have a positive impact on the business, while ultimately ensuring monetisation of content.

To find out how 7fivefive can help you enhance your capabilities, and get optimum results, get in touch.