[New Wave] Why Do OTT Services Prefer Cloud?

At the 93rd Academy Awards, alongside the remarkable achievement of actress Youn Yuh-jung winning the Best Supporting Actress award, much attention was also given to the news that seven Netflix exclusive distribution titles, with over 200 million paid subscribers, succeeded in winning awards in seven categories. One award recipient expressed gratitude by saying, "Thank you to Netflix for allowing us to share our story with the world." The biggest success factor for Netflix is considered to be its long-term strategy of securing viewers through direct investment in original content.

What is noteworthy is that Netflix entrusts video service distribution and operation entirely to the cloud in order to focus investment on its core business capabilities. Initially, it used its own data centers, but after experiencing several service outages, it adopted an all-in strategy with AWS cloud. Major online video services (OTT) such as Disney+, HBO Max, and Hulu all use AWS as their primary cloud platform. Why do global OTT companies prefer the cloud like this?

First, because it provides rapid service deployment and service stability. For a service like Netflix that operates online in about 190 countries, repeatedly purchasing physical servers and moving into data centers in each country is nearly impossible.

However, with the cloud, configuration and deployment can be completed within minutes to hours. Netflix’s launch of its service in Korea in January 2016 coincided with AWS starting its service in Seoul. Other OTT service companies can also join the economies of scale by following this best practice. In November 2019, the latecomer Walt Disney prioritized AWS as its cloud platform after launching Disney+, securing 100 million subscribers in a short time. It might seem strange for competitors to use the same service, but this actually proves that the synergy effect is greater.

Another reason is that when creating the latest features that enrich video services, the broad range of cloud services meets these needs. There is a Western proverb that says, “Don’t reinvent the wheel.” It means that instead of building something from scratch, use a good existing product.

Cloud services offer hundreds of reusable service portfolios like LEGO blocks. Netflix combines cloud services for various functions such as video transcoding, big data analytics, artificial intelligence (AI) recommendation engines, and email delivery. Disney+ also uses more than 50 cloud services. These are already built services for machine learning, storage, content delivery, serverless computing, and data analytics.

This trend can also be seen domestically. Various OTT services such as Watcha and TVING are securing service competitiveness through cloud along with investment in original content. A world is opening where domestic content can meet diverse viewers through overseas services. Thanks to the benefits provided by the cloud, you and I can now enjoy more entertaining and moving stories.

Yun Seok-chan, AWS Senior Tech Evangelist