DISNEY NETS FLIX - GREENER PASTURES AHEAD?
Updated: Oct 30, 2019
BLOG BY AJEY ANAND, CEO OF NORIGIN MEDIA
A message for the sustainability of TV streaming businesses
Great companies have been measured mainly on their commercial success or conceptual value, and perhaps they are credited for local societal impact. It is high time that companies are considered great only when they contribute to all three pillars of sustainability while focusing on achieving the profits.
Over the last decade, streaming technologies have rapidly changed TV consumer habits. Netflix and Pornhub take the top spots as the most popular streaming services but are hardly ever equated to being some of the biggest contributors towards climate change. This commoditised market of TV will see the launch of yet another global sensation soon and many more will follow. Increased large-scale consumption of video content will impact the environment negatively. We should start ensuring that the online video boom is fuelled by clean and sustainable technology, not just great content.
Simplified definitions around sustainability are often limited to a green or environmental perspective. While a negative carbon footprint should be the crux of it all, the enormity of achieving sustainability requires all three pillars of its definition to be aligned: Environmental, Social and Economical or as I prefer to to call them the three big Ps: Planet, People and Profits!
The world’s streaming traffic consumes a large part of the internet’s bandwidth, which was not built to support high volumes of video in the first place. The World Wide Web has however transformed and become robust enough to encourage new technologies that increase video quality, and video consumption as a result. High-definition video is already passé while we passively await the 4K video transformation or global 5G rollouts that promise skyrocketing data volumes. All of this consumes enormous amounts of energy from data centres that often do not use renewable resources.
Research from Lancaster University has identified that streaming a feature-length film online in HD requires the same amount of energy as boiling water for up to 60 cups of tea. The impact quadruples or more when consumers choose a 4K experience. I have also calculated that a cable company offering a streaming service with 100 TV channels would consume the same amount of energy as 100 large apartments. This highlights the potential positive environmental impact of shared infrastructure between multiple such services within a given market. Each and every TV operator is too keen to run their specific channel line-ups instead of finding ecological and economical gains from shared platforms and knowledge.
The entire IT industry contributes heavily to the world’s carbon footprint - air travel can no longer take the sole blame for it. The companies within the TV industry comprising of broadcasters, TV operators, cable companies, data centres or video technology providers, should be aware of where data is stored, processed and distributed. The value chain for streaming video is complicated with many players and it would be each one’s responsibility to be aware of how the technology that we choose impacts environmental sustenance.
Humans are the most integral part of the environment. Social sustainability therefore requires attention and should not be considered the sole responsibility of governments and the public sector. Companies must help cultivate a social environment that supports community development, human rights, equality and justice, as these cornerstones will provide a good quality of life in a society that will ultimately impact the environment positively.
People within all small and larger societies have growing needs that must be catered to. The concept of social sustainability revolves around the preservation of both small regional, and large international societies, where globalisation encourages local cultures to self sustain, while the planet thrives.
Innovative video engineering from large global players such as Google, Apple, Netflix and Microsoft reduces technology fragmentation, along with international organisations that facilitate standardisation. While smaller societies are impacted by the innovation of these global players, it provides opportunities to cater further to niche local necessities with higher quality or customised solutions. This helps both small and large communities to have access to the best technologies that any fast growing industry requires. The smaller communities can sustain and preserve themselves by innovating and catering to the local needs while using the strength of global R&D material.
Within the TV industry, shared infrastructure or community R&D contribution will help build modern and new ideas that feed into the globalised efforts of creating new tech capabilities. Another area would perhaps be local video content production that helps retain identity while contributing towards the growth of new global TV concepts as we have seen with HBO launching Beforiegeners in Norway.The co-dependence of societies will lead to the larger environment itself being protected by people in a more organic or sustainable manner.
Good economics are the sole purpose of many businesses. Profitable businesses are in a better state to aim for and achieve all the goals of sustainability. The key to a sustainable economy is the organic yield from investments that continuously provide value to the consumer.
The value of TV streaming subscriptions are not the price that is set by the businesses, but rather what is affirmed by consumers. People will confirm the right value for content, as with any commodity, by continuing to pay for it or contently being aware that advertisers are chipping in. Advertisers have always funded a great part of the TV business and will continue to be a great driver for sustainable profits within streaming services.
While we await Netflix’s response to Wall Street’s expectations for another surge of revenue (expected to be advertising), will they follow a parallel merchandising avenue that Disney introduced many years ago? Or will they do something first again, leveraging the potential from all the profits they have made?
MAKE TV GREAT AGAIN
While streaming services will “Make TV Great Again” – sustainable development of the industry is achieved when the needs of the society are catered to with the right value, and the profits are earned to preserve the future, greater needs of the planet. While we energetically have started discussing the reduction of our air travel and giving up meat, we should also ask how our companies can conserve energy and contribute to the societies we operate in and to which we sell the services.
I look forward to the day where our TV streaming services use technology that is regulated much like many other industries and where pollution is not created. Guaranteed use of green energy or stamps of sustenance should become the norm for businesses of a certain size. While local communities and international standards contribute to such progress within all industries, the sustenance of streaming TV businesses should become a habit.