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Live OTT streaming – Industry feedback from CDN World Summit London 2014

Last week I led a round table on the future of live OTT TV and it’s implication for CDNs during the last session of Informa’s CDN World Summit in London.

My first point to open the debate was on QoE. I pointed out that mobile telephones are a giant step backwards in term of voice QoE and service availability compared to good old fixed lines. However we’re all happy to renew dropped calls lose coverage or ask our correspondents to repeat on our mobile phones because we gained so much more than service QoE with mobility. I then suggested users might accept a similar trade-off and embrace lower QoE for OTT TV than broadcast, in exchange for lower costs, mobility, greater choice and personalisation. The reactions around the table made me think I’d just insulted the queen. There was emphatic disagreement. TV is TV and will always be TV said the TV operators and nobody dared take issue. I guess that’s what happened in the boardrooms of railway companies when airplanes arrived. One of the non-TV-operator participants did agree that maybe - except for sports - QoE might be traded-off for greater choice. At this point, the challenge of content navigation was brought up for search and recommendation.

That got us talking about “long-tail live TV” and if it might ever makes sense, i.e. being able to watch a unique live stream that you really care about. That access might make you so grateful that even if the quality wasn’t always pristine you’d still be happy. This idea is buoyed up in an OTT rather than broadcast context. Indeed all the TV markets I’ve worked in, even if they have many hundreds of channels available, invariably have 10 or fewer channels that any one community is prepared to pay for. One of the key promises of OTT is to abolish markets, typically under a satellite footprint. All those start-ups targeting Diasporas are going to find tough competition as the big guys come into their nascent markets more and more.

From a financial modelling point of view, the satellite broadcasters around the table were pretty excited about the fact that for live OTT, if you have a tail-end channel that nobody is watching, your Opex goes down to zero. This for them was the real opportunity in live OTT.

Consensus was easy to get on the fact that live OTT TV brings mobility, however nobody was clear yet about a killer use case where this is really important. Watching videos on the tube or train is still very much a download experience and rarely legal at that.

When I brought up the question of when rather than if, Netflix starts live streaming nobody felt ready to pick up the gauntlet. I’ll keep that for another day.

Our debate wound up over an interesting discussion on the blurring of boundaries between linear and on-demand content. Typically a shopping channel can be played out from an automated server with people being able to interact and turn a multicast stream into a unicast one. The final feedback from two operators round the table was that Multicast is only really a panacea for large Telcos that own a network. For the rest of us the cost benefit analysis turns out much worse in the real world than on the drawing board of business planning.

This left me with the clear impression that there are still problems out there looking for solutions, not the other way round for a change. As many network and service operators want to build their own solutions rather than relay on the global CDN operators, we'll probably see a major player emerge from the likes of Anevia with its edge caching, Broadpeak with its Nano-CDN, Media Melon with its QoE analysis or Octoshape.

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IBC 2013, impressions of a 4K OTT show

Although OTT has been an IBC topic for a few years, we actually saw a plethora of end-to-end platforms that actually worked, often purely in the cloud. The range of supplier was impressive from Israeli start-ups like Vidmind to multinationals like Siemens or the pioneer Kit digital, now reprendre Piksel. There was also much more talk of real world deployments. Underlying technologies are of course needed to enable OTT and adaptive bit rate (ABR) was omnipresent with most - but not all - stakeholders betting on the convergent MPEG-DASH flavour. OTT ecosystems can still be daunting and as we predicted in last year's white paper written for VO, Broadpeak and Harmonic, multi-vendor pre-integration was a trending theme. This year's IBC was, as expected, all about the forthcoming Ultra HD/4K resolution, which will now be enabled by the new HDMI 2.0 announced at IFA and HEVC. HEVC was shown in a few real world setups as oppose to last year's lab demos, although there wasn’t yet any consumer-grade decoding solutions. Many demos painfully showed that frame-rate is an issue as Thierry Fautier pointed out to me here. The jerky 25 FPS demos clearly made the point that it's going to be at least 50 FPS or higher resolutions just won't take off.  The 8K, Super Hi-Vision demo by NHK in the IBC's future zone blew my mind. With such an immersive experience, I doubt we’ll be wasting any more time with 3D in the living room. Although less prominent, but nevertheless significant, like the tip of an iceberg, the Smart Home continued its slow forward march with for example a demo of Cisco's Snowflake that dimmed the lights during a movie's night scenes. Several vendors like ADB or Nagra were talking about media hubs in the home. Big data was in a lot of discussions and I was pretty amazed by the power of solutions like Genius Digital's analysis of viewing statistics and how they can being immediate gain. Of course I too loved Wyplay's huge blue frog in hall 5, representing their new open source initiative, which needs to be analysed in the light of the US centric RDK project pushed by Comcast. As every year, I spent some time with a company slightly out of my usual focus, this year Livewire Digital showed me how professional newsgathering can meet BYOD. Some things I had expected (described here), but didn't see much of, included HTML5 that wasn't promoted as the mother of all UI technologies as I thought it would be. Also, despite Google’s recent successful Chromecast launch, dongles were not really visible at IBC (I’m told Qualcomm had one on their booth). Finally, it occurs to me tidying up my notes, that the true implication of the BYOD phenomenon hasn’t really been addressed head-on. Of course the show and conference were full of things to say about tablets and smartphones, but nobody seems to be looking at the deep business model transformation underway. When I learnt to do a TV launch business model, barely over a decade ago, the STB represented 70% of the project CAPEX if you hit a million subs. So in the future will a TV rollout cost 30% of what it used to, with the subscriber subsidising the operator for the other 70%? This is about my tenth IBC. In the jury for best booth, to which I was invited again this year (thanks Robin Lince), we realised that as IBC matures in the age of Internet and social media, the show is less about learning what the latest trend or product is or even what people think about them, we usually know all that before even coming. Face to face networking and building relations are the deeper motivation. In follow-up posts I’ll report on the 17 companies I spoke to this year at IBC: Brightcove, Envivio, Axinom, Visiware, Vidmind, Wyplay, Genius Digital, Astec, Axentra, Gravity, Akamai, Rovi, Cisco, Livewire Digital, Tara Systems, Verimatrix and SofAtHome.

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CDN 3.0 White Paper

CDNs have improved in leaps and bounds in the last decade. This white paper asks if mainstream suppliers are now struggling to deliver the next big improvement. We look into whether there could be a window of opportunity for network operators to get back into the game. Live OTT streaming is considered a great catalyst for this opportunity.We finish by looking into what the future of CDN's might look like in the next few years.

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Gulf big three Telcos could win big time if only they could cooperate on content

I’ve been spending some time out in the Gulf again on various consulting gigs.

There are currently three pretenders to the crown of biggest regional Telco. Saudi’s STC, Qatar’s Qtel and the Emirates Etislat. STC has a pretty impressive footprint in its own vast country, but the other two make up for a lack of a large local market with capital participations in dozens of other operators, mainly throughout Africa and Asia.

The situation resembles Europe before a combination of regulation and market forces toppled the national incumbents off their pedestals. Most agree any losses the incumbent suffered in those years starting in Thatcher’s 80s but more in the 90s and 00s for the rest of Europe were a small price to pay for the improvements and value consumers saw in triple play services.

But that was before Apple, Google or Netflix loomed so threateningly large on the horizon. Now, with their weakened positions, a common defensive strategy against these behemoths from the USA is to go and cry in front of regulators and governments for some form of protectionism. That might ease the pain, but not cure the problem. The more ambitious ones may seize the opportunity and remember grandpa’s old line that if you can’t beat it, join it. I’m finishing a white paper sponsored by Broadpeak, that explores how and why local operators should embrace OTT providers by selling them their own CDN services, which will always be better than anything from a global provider.

Imposing data caps seems unrealistic in current competitive market conditions, as the operator that initiated them would lose out badly in market share. In France, Free has been fighting Google over YouTube traffic to their subscriber’s detriment for over a year now, the situation is escalating out of control with consumer groups complaining the regulator.

But out here in the gulf the situation is different. Incumbents haven’t yet started their downward spiral and there is an opportunity to do something great.

I believe these three companies have left it too late to succeed alone.

It took Belgacom nearly 10 years to become the content heavyweight it now is in its home market, but nobody had ever heard of Netflix when they first started and Apple was still trying to recruit content into iTunes Music Store.

So where the Belgian incumbent took a decade to get things right, the Gulf Telcos only have one or two years before the global OTT players turn their focus here.

With its subsidiary Intigral, STC has taken a clear lead in terms of content aggregation and probably in video infrastructure too. Opening the capital structure of Intigral to let Etisalat and QTel in may seem counter intuitive at best and probably downright crazy to many. But together the 3 operators could muster enough clout to finally beat some sense into the reactionary content owners.

This triumvirate would need to cooperate on technical CDN issues (but that's a story for another blog), but that still leave a wealth of areas to compete head-on, from user experience to hardware, packaging, pricing, bundling, marketing, business services, etc.

The Middle East is rife with video piracy and Hollywood majors should remember the music labels had all but killed themselves in their wars against file-sharing. They hung on by the skin of their teeth, and some are again a bit hopeful that the likes of Deezer or Spotify might pave the way for the industry’s return to at least part of its former glory. Incumbents like Orange are desperately trying to get into deals with these companies (see Orange - Deezer here).

Hollywood and the TV content rights-holders had been steadfastly maintaining their divide and conquer strategy to content licencing, making any attempt to aggregate content beyond a local play aimed at a specific device impossible.

That attitude has started to crumble, not least because the content owners want to initiate their own OTT strategies without limitation of device or geography.

A stakeholder with enough financial backing could flash a check with enough zeros on it to buy the exclusive rights in the whole region. This could be for a major sporting event or maybe the latest Hollywood blockbuster.

If I go along with this pipe dream, maybe the best of the Rio Olympics in 2016 will only be visible on IP networks in the Gulf, with traditional broadcast left with the crumbs…

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IPTV is dead long live OTTIPTV

I’m almost three weeks late for my write-up of this year’s IP&TV world Forum, so I started this piece for my blog in a rush with a big sense of guilt. It turns out that my intro on the IPTV Vs. OTT debate has taken turned in to an opinion piece on it’s own (follow-on report on IP&TV World Forum 2012 coming soon with interviews from Envivio, Verimatrix and Media Melon CEO’s as well as news and demos from Ineoquest, Siemens, Harmonic, Orca and some others).

 

For the sake of clarity, in this piece, I’ll use the term IPTV to describe TV delivered over managed networks with guaranteed quality of service as opposed to OTT delivery that has to go over networks not managed by the service provider. IPTV services are generally those delivered by Telco’s (e.g. Orange TV, ATT Uverse), whereas OTT services are usually offered by content owners (BBC, Hulu) or dedicated start-ups (Netflix, Roku).

 

I gave my first IPTV presentation in 2004. Some visionaries were already talking about OTT. But that’s another story. The first thing I did then was to define the term IPTV because no one agreed on what it actually meant. As far as buzzwords go, IPTV had a pretty good run for its money, staying trendy for almost a decade.

Prior to this year’s IPTV show, I predicted on my blog that OTT would be the only common theme for the second year running.

This year’s IPTV world forum was the biggest yet, yet it was the last. Next year the show is being rebranded. (Incidentally as the IP&TV rebranding never took, I wonder if the new TV Connect rebranding will fare any better; IPTV is a strong brand name). That must be saying something. Has the great IPTV ship sunk under her own weight?

Is IPTV really gone for good, or has it just gone out of fashion? I remember wearing a scarf of my grandfather’s a few years after he died. He’d had it for decades. Yet when I wore it on one evening, I was amazed to receive compliments on being so trendy (I actually have no dress sense when it comes to fashion as you may have noticed). As it happens the design was just making a comeback.

Likewise, might the IPTV World Forum comeback in 20 or 30 years? You’re probably laughing at such a stupid question: technology isn’t like clothing. Well maybe so, but people respond to fashion in the same way whatever the subject.

 

Some say IPTV has failed because big Telcos that ploughed hundreds of millions of Euros into the technology have not recouped their investment. We’ve tried for years to convince ourselves (and investors) that IPTV was a sound defensive strategy. All the clever multi-play bundling was keeping customers from churning. Actually it was, it’s just that it only put a plaster on the wound without healing it first. IPTV is just a tool and teaching someone how to use a tool from another trade, doesn’t teach her how to actually make a living out of that trade. Belgacom is a very rare counter-example amongst Telcos - having put a real TV exec at the steering wheel;  they are now the only ones who can actually claim genuine IPTV success. Ironically much of their technology has recently gone obsolete as NSN their main provider has decided to drop IPTV products.

It’s probably significant that at the same time Siemens (not Nokia Siemens Networks, i.e. NSN) is making a big push back into the TV space, but with an exclusively OTT model.

So what has actually failed with IPTV is the Telco’s attempt to use TV to climb up the value chain. The technology itself needed a few years to have the wrinkles ironed out, but works very well now.

The market cap of any major Telco with a big IPTV offering, when compared with that of Apple or even Google, tells the same story.

 

Last year I wrote a successful blog entry on why France, having been the birthplace of IPTV, would probably also be its first grave. The article generated a thread of over a 100 comments on LinkedIn and I was quite chuffed when Gavin Whitechurch the head of IPTV World Forum series gave me an analyst spot at last year’s London forum.

 

My “the death of TV” analyst briefing was a learning experience. There were five other analyst tables and as doors opened, delegates came in and chose their table. The other tables were about fine things in the future (namely OTT) and most had about six people - one even had a dozen. Mine had none! So I’ve learnt from that marketing mistake: this article isn’t about IPTV’s woes but about OTTTV’s great potential.

 

Back to the real reason I believe it is simply a question of fashion. The current fuss over OTT is still about delivering TV through the Internet Protocol. If we didn’t suffer from a need for novelty all the time we’d be calling it IPTV because it still is.

Delivering video service OTT won’t kill IPTV. On the contrary it’s going to complement IPTV delivery and even help it by extending its reach. It’s an ideal technology for IPTV operators to delivery multiscreen or TV-anywhere experiences.

We’re just finishing a White Paper with Harmonic, Orca, Broadpeak and Viaccess on this very topic. Before OTT can make managed IPTV delivery obsolete, we’ll need a very different Internet from the one we have today. There will be a market for delivering TV over managed networks as far as technology roadmaps can go.