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Cloud Power: Inertia Slowing Widespread Cloud Adoption

New York - Inertia may be slowing down the adoption of cloud
technologies at media companies, particularly larger ones, said Bob Fox, global
industry leader on IBM Global Business Services' telecom, media &
entertainment team.

"Anytime you introduce some new innovation, there's always
resistance," Fox said in a keynote discussion at B&C/Multichannel News' TV's Cloud Power event here Thursday
afternoon. "There's a lot of inertia, particularly in a lot of the larger media
companies. The smaller companies, less than $1 billion, are leading the way.
They have less to lose but they also have a lot to gain."

But that may be changing. Fox cited statistics from an IBM
study that said while most media and entertainment companies aren't using cloud
technologies to substantially impact their customer value proposition (only 16%
today), 67% expect that to change within the next three years.

"I think the lesson of the last decade for those of us who
have been in the industry is it's either change or be changed," he told
discussion moderator Todd Spangler, technology editor at Multichannel News.

So far, Fox said companies have mostly opted to stick to the
existing distribution channels, like HBO restricting its HBO Go app to cable
subscribers instead of offering it as a stand-alone service. But as customers
clamor for more choice, networks will have to start deciding whether it's
better to have a relationship with MVPDs or to go direct.

"All the companies, no matter where they are in the value
share, need to think about what the customer wants," he said. "Again, the last
decade shows the customer gets what they want one way or another."

Fox still argued for a role for content aggregators,
however, and agreed that TV Everywhere is the correct response to the advent of
Internet video and over-the-top.

"Yes it will work, it won't be the only solution. It's a way
for the operators to continue to expand their reach and deepen their customer
relationship," he said, adding that the ability to target users very quickly on
mobile devices will be very valuable.