Olympics video headache: you can start panicking now

If you have been in the industry as long as I am, you probably smile fondly every couple of years when vendors are pitching network armageddon because of a specific (usually sporting) event.

"How will you handle the spike and growth from <insert your favourite theme here>":

• Fifa World Cup Finals
• Superbowl
• New year's eve 
• Champions League finals
• Stanley cup's final (this is hockey for those of you unfortunate souls not freezing in Canada)
• New show on Netflix...

In some cases, you might have reacted with an indulgent smile, recognizing the ploy from the vendor to sell more capacity and secure their vacation bonus to the Bahamas on the network upgrade forced on you.

Well... I am getting report of multiple mobile network failures during the olympics as video viewers resorted to their tiny screens to cheer for their favourite team / athletes while at work / in transit / feigning interest in boring conversation with visiting in-laws.

This might be anecdotal, but evidence shows that the variance between average and busy hour in mobile video is higher than in voice, messaging and data services. 

There is a certain amount of predictability to it (it is likely that football fans will try and catch video snippets of their teams if they are not in front of their TV when the game is playing after all), but the fact that this is video has a multiplier effect on the demand.

Because of the voracious character of some of the devices, video players and content providers attitude towards quality, networks get oversubscribed much faster and longer than with other services.

Will network operators start to consider video as a separate service and manage it actively rather than suffer its unpredictable consequences? 

This and more in my new report "mobile video monetization and optimization 2014".

Flash in the cloud

Flash Networks announced today that it is making its Harmony Mobile Internet Services Gateway optimization and monetization solution available in the cloud. The solution that was traditionally deployed in mobile core networks will soon be deployed in private and public clouds.

"Harmony Mobile Internet Services Gateway integrates web and video optimization, analytics, traffic management, web monetization, content control, cell-based congestion awareness, centralized caching, service orchestration, and an intelligent policy engine in a single gateway. "

I spoke today with Merav Bahat, VP Marketing and Business Development at Flash Networks and she adds: "We wanted to introduce the capability for our customers to use cloud services and cloud computing with our platform. Harmony will continue to be deployed in the core networks and in conjunction, can be deployed in private and public clouds. We have been able to duplicate several functions from our platform such as caching, storage and CPU-intensive transcoding and put them in the cloud to offer great additional savings , higher hit rates and enhanced quality of experience".`

As seen here and here, Flash Networks is the third company in the video optimization space who has announced plans to offer a cloud-based solution. Caching, transcoding, content recommendation are some of the services that Flash Networks will perform in the cloud, to benefit carriers with multi-sites or multi-networks footprint.

Cloud-based video optimization is gaining traction, as more and more mobile network operators  see the necessity to deploy video optimization (over 80 have selected vendors to date) but balk at the CAPEX and footprint necessary to enable a good quality of experience.

Cloud deployments and cloud computing were, until recently, seen as an improbable technology to deploy real time video encoding services, but a few tier one operators have tested and are deploying the technology as we speak. It seems that the technology is reaching market validation stage and is getting a much larger acceptance from the carriers' community. It is a good move from Flash Networks to capitalize on this market trend and expand their offering in that space.

Carrier strategy against OTT: vertical integration

In an interesting new development, Bell and Rogers, respectively 29 and 36% market share of the Canadian wireless market and fierce domestic competitors, join forces to acquire a majority share (75%) in Maple Leaf Sports and Entertainments (MLSE) for $1.32Bn.


Bell had already started vertical integration by acquiring the remaining 85% of CTV for $1.3 Bn last year and owns also  TSN, TSN2 and NHL Network Canada as well as a minority share of NHL's Montreal Canadien. Rogers owns the Toronto Blue jay baseball team and the broadcast network Sportsnet.


MLSE provides Bell and Rogers with co-ownership of Toronto Maple Leaf NHL team, Toronto Raptor NBA team, Toronto FC MLS team and the Air Canada center.


This is a very good example of vertical integration. The Canadian market is fairly mature, but with a high broadband penetration and a relatively low mobile broadband penetration (75%), growth is coming from smartphone and media consumption. Rogers, with 44% smartphone market share and a blended ARPU of 60$ and Bell with 26% market share and 53$ ARPU are among the most profitable carriers in North America.


At the same time, as competition increases with wireless new entrants (Videotron, Wind, ...) and OTT offers (BBC iPlayer, Netflix...), Rogers and Bell understand that the key to profitability is content. Buying these sport teams is a way for Bell and Rogers to secure premium attractive content for their domestic market, retaining control (duopoly?) of the most sought after premium content franchises in Canada.

Pay TV vs. OTT part III: CE vendors and companion screens

CE vendors
It is not just the content owners that are going direct to customers, now connected devices vendors offer content directly on their platforms, over the internet.Game platforms have long offered OTT content and are the single major contributors to Hulu's success. Now CE vendors offer OTT apps on their connected TVs, blue ray players, projectors...Samsung, the market leader in TV shipments has created a complete ecosystem, with an app store, a catalogue of pre-integrated OTT apps, some complementary some competitive with service providers. This is offered on their Connected TVs, Blu Ray players, projectors, smart phones, tablets... LG, Panasonic, Philips, Sharp, Toshiba, Vizio have now a similar offering.
It will not be long before Google TV's second attempt brings a complete soup to nuts ecosystem as well with set top boxes and  connected TVs running android and a complete TV app store.
I am willing to bet as well that the next Apple TV will actually be a connected TV, not a net box that will be fully integrated with iCloud and iTunes store and Air.

Companion screens

Lastly, on the device front, there is a new trend developing that I will call companion screens. More and more people, while watching TV are  doing something on their tablet, smartphone or laptop that is related to what they are watching. Whether it is chatting, playing, texting, blogging, twitting or posting, these interactions have emerged spontaneously and  are still very much in a separate silo from the TV experience. Most vendors, and service providers are trying to figure out how social media, connected devices and OTT fit together.
I have seen many cross-screen applications and services at IBC last month and I will present a few in my next post about innovations in the Pay TV / OTT space.



In conclusion, the industry is transitioning from a model where Pay TV content was predominantly accessed through managed devices on managed networks, to a model where content and services will predominantly be accessed through unmanaged or hybrid devices, on unmanaged or hybrid networks. This, as you can imagine creates many threats and opportunities for content owners, service providers and device vendors that we will examine in the next post.

Pay TV vs. OTT part II: managed devices and networks vs. OTT

It is really interesting to me to see that as Google acquired Motorola, it has become the market leader in video head end and set top boxes overnight without many hardly noticing. It means in my mind that the previous attempt from Google to invade the pay-TV market will be much stronger the second time around when Google TV will be relaunched.

This market looks just like the mobile market 8 years ago, when device vendors all had proprietary operating systems (this is the case with set top boxes middleware and connected TVs, game consoles, net boxes...) and everyone wanted to "own" the customer.

Managed devices, Managed networks
Pay TV is traditionally delivered through a set top box to a home. Because the set top box has until recently been built upon a service provider specifications,because it was sold, rented or subsidized by the service provider, because the service provider decided what services (PVR, Electronic programming guide, search...) would go into that box, for all these reasons the set top box is seen as a managed device. A managed device runs on a managed network, as opposed to unmanaged network (e.g. the internet).
The network is called managed because the service provider controls the backbone, core and delivery, therefore guaranteeing digital rights integrity to content owners and quality of service to content aggregators and subscribers.

What happened in the last year is that managed devices such as set top boxes have become less and less managed and have offered access to OTT content via the internet. These devices are called hybrid, as they offer both cable/satellite managed services and internet access, together with OTT apps access (Hulu, Netfix...).


Unmanaged devices, OTT

Smartphones, tablets, laptops, game consoles, net boxes, connected TVs have made their appearance.These devices are by definition unmanaged or hybrid, since they are all connected to the internet.

Strategy Analytics predicts that over a billion connected devices will be shipped in the next three years, with managed devices being a very small 20% portion of the total.
This is without counting the billions of smartphone and tablets that will be sold at the same time.

OTT apps are flourishing, offering video content to consumers, without the need for a pay TV subscription, in some cases complementing the current offering (for instance, YouTube fills a need that wasn't properly served by PAY TV services) , in other cases, cannibalizing or replacing traditional Pay TV services (for instance, video on demand from the service provider is seriously threatened by Netflix, Hulu...).
Additionally, the content aggregators whose only channel was TV are now addressing directly the customer through OTT. For instance, HBO, a very successful payTV channel is now offering HBO Go, so that its subscriber can watch live, catch up and on demand programming from connected devices. For the moment, in the US, the consumers have to sign up with Comcast, Time Warner Cable... credentials to get access to the service, so the service provider revenues streams are protected, but nothing prevents HBO to go direct overnight, or to offer its programming outside the US directly to consumers...

We will see in the next post that CE vendors are also joining the fray, and we will examine an interesting new trend: companion screens.

Pay TV vs. OTT part I: the business models

I have been working for the last few months on the Pay TV, OTT and connected TV market. It is a space I find fascinating, with a lot of new trends and activities, very similar to the mobile handset market before the mobile broadband revolution. I figured I would share with you some of my findings about its dynamics and challenges.


Market size and dynamics
 Pay TV

Pay TV is defined as the market space where service providers (Time Warner Cable, Comcast, BBC, Canal Plus, Sky...) sell subscription access to TV content (channels) and services (pay per view, video on demand, electronic programming guide, catch up TV...) to subscribers and advertising to announcers.


TV content is created by studios and content creators and sold to channels and content aggregators.
In 2010, according to Strategy Analytics, it is a market that generated nearly 400 billion dollars globally, about half from advertising and half from subscription and services in 2010. These $400B were split approximately 1/3 to service providers, 1/3 to content aggregators and 1/3 to content owners.


 Over -The-Top

Recently, many content owners and aggregators have surfed on the wave of technological advance spurred by the increase in fixed broadband, mobile consoles, web boxes and connected devices penetration.
These content owners distribute their content on the web, directly to the consumer. Netflix, Hulu, Youtube,  HBO, BBC, NFL, etc... are the better known brands but there are new global and local players diving in every day. 


The fundamental difference in this model, is that the content owner just needs the consumer to have a screen (TV, mobile or PC), a connection (mobile or fixed broadband) and if the screen is not connected, an access gateway (set top box, router, net box, game console) to sell its content and services.
While this market is much smaller  (only about $8 billion in 2010), it is growing fast and threatens the revenue model of Pay TV in the sense that in this model, revenues are split approximately 60/40 respectively between content owners and aggregators. Nothing for service providers!


As you can imagine, the fear from service providers is that OTT starts cannibalizing their legacy revenue, as their current suppliers turn into fierce competition. In the next posts, I will look at the dynamics and competitive field in the ecosystem (devices, operating systems, app stores), as well as new trends in standards and consumer behaviors together with a few vendors and service provider strategies to take advantage of or mitigate these new threats and opportunities.

Bytemobile T 3000 series & Unison update

Bytemobile released this week a new platform (T3000) and a new product (T3100).
With more than 40 operator deployments, Bytemobile is the leader in the video optimization market. The new platform is launched to allow Bytemobile to address the intelligent traffic management market .

Mikko Disini, in charge of the new T 3OOO series and Unison platforms discussed with me the rationale behind the introduction of the new product and how it complements Unison.

T3000 series has been created in an effort to provide more monetization options for mobile broadband operators. For those familiar with Unison, which is essentially a web and video proxy and optimization gateway, T3100 expands beyond browsing to proxy and manipulate all traffic, including UDP based applications, P2P, video chat, RTSP, etc..
While Unison remains a software based solution, on off-the-shelf IBM blade center, T3000  series is a purpose built IBM hardware based appliance. T3100 combines load balancing, DPI, PCEF and traffic rules in one package. Bytemobile is planning to introduce new products on the T3000 platform in the future.

Mikko commented that the rationale behind the hardware based approach is to be more channel-friendly. " It is easier to deploy, package, explain, it is an easier sale".

My opinion is that Bytemobile makes a smart move to expand their product portfolio with new verticals. While there is a large level of overlap between Unison and T3100 today, Bytemobile can upsell their installed base with purpose-built solutions. While in the past, Unison was a Swiss Army knife, for a market who was looking for a quick solution, that had a bit of everything, the growth of the traffic is forcing many vendors to separate applications to have more granular scalability.


With T3000, Bytemobile moves more decidedly into the DPI, load balancing, PCEF space than with Unison. Additionally, moving to a hardware appliance model is going to enable them further to resist price erosion, reusing the Unison tactics of bundling several applications and features together with different market prices and models.
What remains to be seen is how effective the strategy is going to be in acquiring new channels, beyond IBM, NSN and TechMahindra now that T3000 is sure to encroach on some bigger players such as F5 and Cisco... or maybe, this is the strategy?

Dear Openwave, Juniper is now partnering with RGB Networks

In a solution brief stealthily released this week, Juniper introduces RGB Networks VMG transcoder product within its Media Flow solution as their partner for adaptive streaming.

This solution brief, centered around mobile video delivery uses a lot of the rhetoric associated with mobile TV and TV everywhere, touting computational performance and low heat dissipation for instance. The solutions seems to be addressed at carriers, content owners, cable operators who want to enable their own mobile CDN, rather than relying on Akamai and Limelight.
It is not surprising since it is, after all, RGB's core competency, to extend professional video encoding from cable to mobile networks. Hardware based, high performance adaptive streaming and its three proprietary flavors (Apple's, Microsoft's and Adobe's) seem to be the core of the solution. That is, until their acquisition of Ripcode last year which yielded, beyond a handful of wireless customers and a software based solution, the embryo of video optimization  technology for OTT traffic.




What I find interesting, is that the same solution from Juniper, Media Flow was supposed to be as well the core of the Openwave - Juniper partnership around video optimization announced at Mobile World Congress this year. 
If you remember the press release at the time, "Juniper Networks (NYSE: JNPR) has selected the Company [Openwave] as a strategic partner to integrate its Media Optimizer into Juniper’s Media Flow solution for mobile video optimization".


We all have seen Openwave's struggle to convince the market that they indeed have technology in this space, after over 30 announced trials and customer engagements and only Wattanya Maldives to show as an announced customer in the space.


At the same time, RGB Networks has made many inroads in licensing and OEMing its technology to core networks, VAS and optimization vendors to perform transcoding, not in the mobile TV/mobile CDN space, but for video optimization. Several vendors in the space have embedded their transcoder in their solution.




Reading between the lines, I can't help but think that Juniper might be thinking of RGB as an anchor technology partner for their Media Flow solution. It makes sense to consolidate both the video delivery for on-deck content announced here with the video optimization for OTT content with a single technology partner. At that point, RGB has a lot more references and technology than Openwave.


 I would not be surprised if Openwave's partnership with Juniper was at its end, whether it will be officially acknowledged or not, only 6 months after its announcement.

Google / Moto: your TV is the next battlefield

Goodbye Moto!

many out there look at Google`s acquisition of Motorola as a defensive step to ward off patent trolls and competitors aggressively pursuing Google and Android licensees. With 17,500 granted patents and another 7,500 filed, there has to be some value from Motorola`s pioneering technology in wireless networks. Whether this is worth $10.5B after the cash retained by Motorola remains to be seen.

While this is undoubtedly a key aspect of the transaction, I would like to look at the impact of this acquisition on the mobile and TV market.

Would Google entertain a rebirth of their handset strategy? While the attractiveness of the Android ecosystem is largely as a means to have a more open alternative to Apple`s iStore, nothing prevents Google to look at a more vertical, better experience on Google devices than on the OEMs. Lets not forget additionally, that part of the transaction is Motorola Set-top-box and connected devices business. Motorola, according to a study published by The Multimedia Research Group is ranked worldwide market leader in Video head-end and set top boxes shipments.

Why is that important? The next battle room for video is your TV screen. According to Strategy Analytics, TV industry generates $392Bn per year in revenue, half from advertising, half from subscription, payTV...
These revenue flows back approximately 1/3 to content owners, 1/3 to aggregators and channels, 1/3 to service providers.

The next frontier in TV, is OTT (Over The Top). In an OTT model, content providers and aggregators share the revenues 50/50, with nothing left for the operators. As Samsung, connected TV market leader, has created their vertical environment, with SmartTV, creating essentially an app store and a suite of apps that can run on their connected TVs, set-top-boxes, tablets and phones, I am willing to bet that we will see an Apple TV pretty soon (not the little box that connects your TV to iTunes, an actual Apple branded TV).

From then on, it is not difficult to see that the next OS and app store battlefield will be in your leaving room.

Will Google revive GoogleTV, with a new Android environment that can be ported by Consumer Electronics (CE) giants on their connected TVs, set-top-boxes, tablets and phones?
Will CE vendors choose to use Android, now that Google is also a competitor, with Moto`s acquisition? Or will they try to emulate Samsung and create their closed ecosystem?


I will examine in future posts some of the defensive strategies operators are putting in place to retain some value in this changing ecosystem.
I don`t know you, but for me, it spells interesting times for the future. Let me know your thoughts....

Mobile TV, video advertising and Apple

FreeWheel released a study this week, showing a number of interesting facts in the on-deck content syndication space.

• Mobile TV represents only 1% of overall TV viewer ship (including fixed, web).

• Apple devices represent 80% of mobile TV consumption. This is due to the fact that, having entered the market first, there is a larger penetration of the brand withing tablet and smart phone users, which has prompted content editors and aggregators to prioritize this platform for content availability.

• Video advertising is starting to grow in revenue and viewing completion, mostly due to the fact that there is more long-form content available. Mid rolls are the most effective in term of completion rate, as long form content is more engaging, users stay until completion of the ad to resume their viewing.

I think on-deck mobile TV is till the least attractive of the mobile video services. It is expensive, offers a service that is the same as regular TV, with less quality.


Mobile TV becomes attractive to me when it offers different features from TV, that is acknowledging the fact I am mobile, like play and resume across screens (a feature I created for Videotron in Canada, see below)

or content / channel targeting. Operator that are successful in mobile TV cater to the long tail and offer niche content and channels for specific demographics. Access to the same top 10 channels as fixed TV is only good for a few bucks a month. Real monetization opportunities come from specialized content and channels.

Mobile video 103: On-deck, off deck, broadcast and unicast

Mobile video, as a technology and market segment, can at times be a little complicated.
Here is simple syllabus, in no particular order of what you need to know to be conversant in mobile video. It is not intended to be exhaustive or very detailed, but rather to provide a knowledge base for those interested in understanding more the market dynamics I address in other posts.


On-deck and off-deck (or over-the top, OTT)

• On-deck mobile video services are services offered directly by the network operator to their subscribers.
  They usually range from a mix of syndicated/ licensed content from aggregators and media companies (music clips, news segments...) to full mobile TV and VOD services such as live and recorded TV, network PVR and catch up TV, Full movie VOD etc... These services are usually premium services with specific tariff plans put in place by the carrier.
• Off deck services or content are usually provided by third parties not necessarily affiliated with the carrier. These range from social media (linked in, twitter, Facebook...) to user generated content (YouTube, dailymotion...) and professional content (Disney, Hulu, ESPN...). These services are usually not controlled by the network operator and are usually charged for the transport of the data by the carrier but not the content itself.

On-deck content are premium services and generate an important part of a carrier's revenue.  Most carriers do not have content assets though and end up aggregating and reselling content from media companies. Off-deck services are what is driving mobile data growth today. Facebook, YouTube, Netflix and others start to overwhelm and cannibalize what used to be a good revenue maker for carriers. The concept of dumb pipe has emerged over the last few years. Carriers tryu to recapture mobile data traffic and revenue on-deck to avoid being a "dumb pipe" charging for access, but not the value added content.

Broadcast and Unicast 

• Broadcast video is the method where the connection between the streaming server and the client is one-to-many. The streaming source is unique and is accessed by many devices. This technology has been used for mobile TV services relying on OMA Bcast, ATSC, MBMS, DVB-H and Mediaflo technologies. 
• Unicast video is the method where the connection between the streaming server and the client is one-to-one. Each connection is unique and can be adapted to the specific conditions of the device, network, etc... The content, its diffusion, quality, advertising,etc... can be personalized for each target. Unicast is used in many mobile TV and Video on Demand, with RTSP protocol. For many"legacy" (i.e. non-smartphone) devices, it is the only video streaming technology. This method has been implemented in many mobile networks for mobile TV as on-deck service.

Although branded as the next generation mobile TV, broadcast has so far failed in many market. But this is due more to the business model than the technology. With broadcast, users all have access to the same programming, the same ads. Most users will consider paying a nominal monthly fee to get access to a few channels, but this is not where the profits are. Unicast offers an alternative as each stream and program can be tailored to the subscriber need. It is more management overhead, but users are ready to pay a premium for an individualized experience.