Blinkbox tunes in to IaaS to compete with Amazon and Netflix

Jessica Twentyman Profile picture for user jtwentyman April 23, 2014
Video streaming firm Blinkbox works to deliver a great service to customers in a cut-throat market where it competes against the likes of Amazon Prime and Netflix and has to keep a close eye on costs.

Online TV and movie streaming service Blinkbox has a great deal to prove in 2014. Owned by UK supermarket chain Tesco, it’s one of the digital lines of business on which executives at the company are pinning their hopes for a turnaround, as margins in the main grocery business are nibbled away at by budget chains such as Lidl and Aldi.

See also: Does a Netflix price hike get me series 3 of House of Cards? 
Apr 22

The trouble is, Blinkbox may be growing substantially, but it is by no means a profitable business yet. In fact, losses within the division are reportedly widening.

So, at the same time as Blinkbox works to deliver a great service to customers, in a cut-throat market where it competes against the likes of Amazon Prime and Netflix, it must also keep a close eye on costs.

As group head of IT at Blinkbox, the pressure is on Jon Robinson to ensure that the business has the hardware capacity to encode and store movie and TV content and deliver it to customers at a palatable cost to the business - and that’s no easy task, he says. When he took on the role, in late 2012, the service had around 200,000 monthly customers. Now, it’s in the millions.

“As anyone in IT infrastructure will tell you, trying to stay one step ahead of the business in infrastructure terms, especially a business with aggressive sales and growth targets, takes as much planning as you can throw at the task,” he says.

Jon Robinson
Jon Robinson

But even with meticulous planning, Blinkbox still has the ability to throw surprises at him: the release of a surprise-hit movie on the service, before it’s available on DVD or Blu-Ray, can send a stampede of customers to the site, as can a well-placed TV advert during a popular show, such as The X Factor.

In addition to these external factors, internal drivers too can pose new demands for scalability.

“If the business announces it wants to launch the service to a new device, we quickly need to optimise our video files to run on that device," explains Robinson. "The Blinkbox movie you watch on a Smart TV, for example, won’t be the same files as the movie you watch on an Android tablet. For every new device launch, we have to quickly reencode a new file format for each of the 20,000 titles we have in our catalogue.”

Certain uncertainty

The upshot is that Robinson and his team must operate in an environment of seemingly never-ending uncertainty. “We can try and get a feeling, upfront, of what to expect - but we can never be 100 percent sure,” he says - and for that reason, he’s now using infrastructure-as-a-service from Microsoft Azure to address wildly fluctuating demands for scalability. It’s cheaper for Blinkbox than running its own hardware in rented data centre space (as it did before) and takes the uncertainty out of surges in demand, by scaling quickly to meet the business’s needs.

See also: Every little helps towards Tesco's multi-channel future
Mar 4

“We started our conversations with the team at Microsoft about 18 months ago, but we weren’t sure it was going to be the right fit for us at first,” says Robinson. The sticking point was that, at that time, Azure was more of a platform-as-a-service offering.

“We didn’t see a way to ‘lift and shift’ our bespoke applications, in the form of virtual machines, into that environment, and we didn’t want to have to go back to the drawing board and rewrite our applications from scratch. It would be like changing a wheel when you’re already travelling at one hundred miles per hour,” he says.

The situation changed when Microsoft executives explained to Robinson the company’s plans to introduce infrastructure-as-a-service in early 2013. “We realised there was now a great fit for us there, especially around media serving and encoding,” he says.

Using Microsoft Azure has vastly increased Blinkbox’s resiliency, he says: for each piece of TV or movie content, there are three copies in Microsoft’s Dublin data centre and three copies in Amsterdam. “That means we can serve the films to the customer from either location, depending on what’s going to be faster for them, but if one data centre runs into problems, we can carry on serving out of the second data centre. That’s massive for us.”

Plus, video encoding is an extremely processing-intensive business, and would be “abhorrently” expensive to perform using on-premise servers, according to Robinson. “Now, when ‘Gravity’ is launched on Blinkbox, the file comes to us, we check it, upload it into Media Services in Azure, and it gets transcoded into the thirty-plus formats we need. That’s all done with a very light touch at our end, through API-driven services, allowing us to spend more time at what we’re best at and letting Microsoft deal with the nuts and bolts under the hood.”

The cost benefits of using Microsoft Azure have already been substantial, he says. “First, cloud-infrastructure prices are slashed regularly. We’ve been a paying customer of Microsoft Azure for nine months now and prices have been cut four times. Second, Microsoft are upgrading their servers all the time. It doesn’t make sense for us to own servers for video encoding, because the ones we’d be using today would be useless in three years’ time. We’ve got the fastest servers at our behest, without the capital expenditure involved to have those in-house.”

With new Blinkbox features for customers coming online later this year, new content being constantly added, and with the announcement last week by Tesco that its Hudl 2 tablet is now in production, Robinson and his team already have their work cut out for them for the rest of the year. Cloud infrastructure is helping, where it can, to take some of the pressure off.

“If we’d had this kind of service when Blinkbox first started six years ago, there’s no doubt in my mind that this is the way we would have gone.”

A grey colored placeholder image