Introducing the Mobile Video Alliance

It was a great and unique chance to be invited at the inaugural meeting of the Mobile Video Alliance in London this week. I would like to thank and congratulate Matt Stagg from EE and Rory Murphy from Equinix, who did a great job of bringing together an amazing panel of participants from Akamai, Amazon, BBC, EE, BT, Lovefilm, Netflix, O2, Qualcomm, Sky, Three UK,Vodafone Global and others.

It was an even greater honor to be able to present my views on the future of mobile video and what the ecosystem should focus on to improve the consumer's user experience.

You can find my presentation and the accompanying video below.






In short, it is my first experience of executives from the whole value chain getting together to discuss strategy, business and technology improvements necessary to enhance the consumer's video quality of experience.
Subjects of discussion ranged widely from adaptive bit rate best practice, to transcoding, caching, roaming and data caps, measuring QoE, mobile advertising... in a refreshing neutral, non-competitive environment without vendors trying to push a specific agenda.

The mobile video alliance is a unique forum for the industry to come and solve issues that are plaguing its capacity to grow profitably. Stay tuned, I will follow and report its progress.

I want my... I want my HBO part II

Our second story this week is local. Canada's regulator, the CRTC (Canadian Radio-television Telecommunications Commission), has started consultations to un-bundle TV channels for cable and satellite payTV. In essence, the regulator asserts that TV bundling of channels might be consumer-adverse and that forcing someone to pay for basic cable/satellite + digital channels + movie package + HD + HBO in order to watch Game of Throne is not in the consumer's best interest.
Already both sides of the discussion are engaging in strong arguments. On one hand, it is true that bundling has allowed consumers to discover new content that might not have been their initial choice when selecting their channel line up. In many cases, you are drawn to a new show or a new series by a combination of peer recommendation, preview / advertisement and pure chance. If you did not select the channel to start with, you are removing a large part of the discovery opportunity and I do not see how that can benefit the consumer , the programmer or the announcer. There are already rumors that some US channels could just pull out of Canadian airwaves rather than bend to Canadian pick-and-choose TV which could set a precedent in the US.
On the other hand, TV bundling and prices have gotten out of hand in Canada. It is not unusual to pay over 100$ per month for TV programming which is a high price if, when all is said and done, you watch in average maybe 15 channels in your fixed rotation. Unbundling could certainly cut dramatically in cost to the consumer if they are allowed to select their channel individually rather than in bundles. That's if the MSOs practice a fair price, which is a big if in Canada. Coopetition has been the operating model rather than aggressive competition and prices for unbundled channels could end up being more expensive than bundled, which would end up damaging the consumer's wallet, angering the US right holders and precipitate OTT exodus.

I am in favor of unbundling, but it has to be done in a very careful fashion. It can be beneficial to the consumer only if:

• It leads to more choice rather than less (US channels need to stay)
• It is easy to add and remove channels, with no subscription longer than month to month and no penalty.
• Individual channel selection is not sub-bundled (you have to subscribe to channel x in order to pay extra for channel xHD). I should be able to select only HD channels if I want and not have to carry both SD and HD. It is ok to pay more for HD than SD.
• Catch up TV, time shifted and a la carte one demand offering could be bundled with individual channels (for instance, AMC SD 1$, HD 1.5$ with on demand 3$...).
• It is ok to have public programming as a bundle part of the basic subscription package.

In this manner, the successful channels will reap the bulk of the consumer money, but special interest channels will still reach their audience. Channels that have no audience will not be artificially sustained by bundled package. Channels will be able to compete on a series by series, show by show, encouraging original programming and exclusive rights, allowing true competition for premium content.

These two stories illustrate perfectly the risks and opportunities of OTT vs payTV. The business models are not settled yet, major players are announcing new moves every week. It is an exciting time to work in this industry.

I want my... I want my HBO

Two pieces of news caught my eye over the last week that spell in my mind both a vindication and a perfect example of the seismic changes being experienced in OTT and payTV landscapes in North America.

The first story is in the US. As I was mucking around provisioning my new car's hard drive with my eclectic music collection earlier this week, my son stumbled upon an old time favorite and I was elated to witness his discovery of Dire Straits' "Money for Nothing". As we were happily singing I want my.... I want my MTV, I was reminded of a post I wrote two years ago, musing about when HBO would be able to go direct to customer in North America.

It seems my question was answered this week, with Comcast launching a new plan for cord-cutters and cord-nevers, offering Xfinity Streampix, HBO and HBO Go together with broadband for $39.99. A US Comcast customer will be able to watch HBO over the web on their broadband subscription without having to be a cable customer. The FCC (US regulators) mandates that premium channels have to be bundled with basic broadcast, so that's in it as well, but this is a clear tipping point moment. For the first time HBO is going head to head with Netflix, going pure OTT. As I am moving to my new house next month, This had me rethink my TV strategy and I am certainly going to wait and see what trickle downs in Canada. Increasingly, I am thinking of upping my broadband subscription and shaving as much as I can if not cutting outright my Cable / Satellite subscription.

The implications are profound and it is a floodgate moment. On one hand, Netflix has now more subscribers than HBO, which prompts Comcast to start the self cannibalization. If you are loosing subscribers, you might as well loose them to yourself and a friendly content provider rather than a competitor. 
You will read about the second story tomorrow.

My agenda at Broadband World Forum 2013

I am looking forward to present and chair a few tracks at the Broadband World Forum next week in Amsterdam.

Here are a few of the slots I will be presenting / moderating / chairing:

October 23rd:
I will present in the 5G workshop and participate in a panel:

Future Possibilities: Managing and Monetising Video on a 5G Network

Patrick Lopez, Founder & CEO, Core Analysis, Canada

What are the Requirements of 5G from a Service Provider and User Perspective?

Mike Wright, Executive Director, Networks & Access Technologies, Telstra, Australia

Patrick Lopez, Founder & CEO, {Core Analysis}, Canada

Takehiro Nakamura, Director of the Radio System Design Group, NTT Docomo

Steve Unger, CTO, Ofcom

October 24th:
I will chair the Wireless Broadband Innovation day comprised of  Smart Cities of the Future and Video and Traffic Management: 

Smart Cities of the Future

The Promise of the Internet of Things & The Road to Successful Smart Cities
 Taïsei Miura, President & Director General, M20 Smart City, France

Smart Energy Innovations for Smart Cities of the Future
 Peter Molengraaf, CEO, Alliander, Netherlands

Building a Smart Airport Experience
Matthew Hall, Chief Commercial Officer, London City Airport, UK

Dublin’s Smart City Initiatives
Councillor Naoise Ó Muirí, Dublin City and Former Lord Mayor of Dublin

Improving the User Engagement Experience: Harnessing the Opportunity
Daniel Danker, Chief Product Officer, Shazam, UK

Firefox OS: The Web as an Open Platform for Innovation and Consumer Choice
Tristan Nitot, Principal Evangelist & Founder of Mozilla in Europe, Mozilla 

Spotify and Telco Partnerships: Bundles of Joy 
Michael Abbatistsa, Global Head of Telco Partnerships, Spotify 

Cooperation Vs Competition Between OTT & Operators to Deliver Innovative Services to Consumers
Gunnar Sellæg, SVP & Head of Commercial Development, Telenor Digital Services 
Michael Abbatistsa, Global Head of Telco Partnerships, Spotify
Mark Newman, Chief Research Officer, Informa Telecoms & Media, UK

Video and Traffic Management
Managing the Effect of Video on the Network

How will Heavy use Video Systems Co-Exist in the Future?
Eric Klinker, CEO, BitTorrent, USA 

Giving Video Special Treatment on Broadband Networks
Nemanja Ognjanović, Head of Section for Network Planning, Telekom Srbija, Serbia

Creating a Great Data & Video Experience to Drive Mobile ARPU
Jaskaran Sangha, Director, Product Marketing, Citrix

How can we Minimise the Effect of Video Traffic on the Network?
Dominique Delisle, Program Director for Content Delivery Network & Services Transformation, Orange, France
Eric Klinker, CEO, BitTorrent, USA
Matt Stagg, Senior Manager of Network Strategy, EE, UK
Yossi Atias, GM Mobile Business Unit, PeerApp

Redefining the Video Delivery Value Chain in the Multiplatform Environment
Ivar Slavenburg, Manager, Product Manager & Marketing, Ziggo, NL 

Profitable Video Delivery
Adam Ford, Principal Solution Architect, Ericsson

How can Operators Close the Gap between Broadband Used and Revenue Gained?
Bernhard Hafenscher, Head of Sales & Business Development, Red Bull Media House, Austria
Matteo Gatta, VP Group Strategic Questions, Belgacom

LTE Traffic Management for Proximity Services
Thomas Henze, Head of Mobile Access, Deutsche Telekom, Germany

Traffic Management in the World of Unlimited
Dave Tomlinson, Senior Product Specialist, PlusNet, UK

Video optimization mid-term update

As it is now traditional (here, here and here) , I update my video optimization market report mid-way from its release post mobile world congress.
This update sees many changes, including Cisco's new strategy in the space, together with company and product plans from Citrix ByteMobile, Allot, Flash Networks, Mobixell, Openwave Mobility, Opera Skyfire and many others.

Operator trends

The market trend for the segment reaffirms its maturity. Like last year, the summer has been quiet in term of activity while spring and the fall remain the high RFx quarters. We have recently seen two large groups select their vendor in the space (Telenor and Orange), more or less wrapping up the tier one group selection process for this cycle in mature markets. Growth in this segment now comes from Latin America and South East Asia, where many groups (Singtel, America Movil, ...) have yet to formulate / finalize a strategy in the space. As discussed in a recent post, coming back from LTE Asia, I have been able to experience first-hand both the interest and the confusion on how to manage efficiently OTT video in some of these markets.

Vendor trends

Citrix ByteMobile remains market leader, both in deployments and revenue. The deployment relative market share is decreasing slightly to 29%, while revenue market share is increasing. This is the result of the fact that new low-cost vendors are entering the market and tier 2 / 3 customers are buying solutions, depressing the average sale price, while increasing the volume of transactions.

Mobixell Networks remains number 2 in deployments with 23%, once again growing its market share over the period. The company's geographical growth comes from APAC and LatAm.

Flash Networks remains a strong third with 17%, growing as well faster than the market. The company is focusing on profitable growth in mature markets with large tier 1 groups.

While the vendors and their order remain unchanged at the top, the new entrants in the market are exceeding expectations, with good progress from Opera Skyfire and Avvasi for instance, while the mid-segment vendors are seeing their market shares and margin deteriorate.
For more information or to order my report, please contact me.

As usual, I provide market share calculations in term of deployment per vendor, the unit being one operator / country. For instance, Verizon Wireless counts for one deployment, even though the operator might deploy 40+ data centers. Groups such as Vodafone, Deutsche Telekom or Telefonica count for each of the properties where the technology is deployed.

The market share calculations are based on a proprietary {Core Analysis} database, collecting data such as vendors, resellers, value of the deployment in term of total cost of ownership for the operator, operator name, country and region. These data are cross-referenced from vendors' and operators' individual disclosures. This database also includes over 100 opportunities in video optimization that are at different stage of maturity (internal evaluation, vendor trial, RFI, RFx...) and will close over the next 18 months.
The market share is valid at the time of publishing but change on a weekly basis, as new deals are awarded.

LTE Asia: transition from technology to value... or die

I am just back from LTE Asia in Singapore, where I chaired the track on Network Optimization. The show was well attended with over 900 people by Informa's estimate. 

Once again, I am a bit surprised and disappointed by the gap between operators and vendors' discourse.

By and large, operators who came (SK, KDDI, KT, Chungwha, HKCSL, Telkomsel, Indosat to name but a few) had excellent presentations on their past successes and current challenges, highlighting the need for new revenue models, a new content (particularly video) value chain and better customer engagement.

Vendors of all stripes seem to consistently miss the message and try to push technology when their customer need value. I appreciate that the transition is difficult and as I was reflecting with a vendor's executive at the show, selling technology feels somewhat safer and easier than value.
But, as many operators are finding out in their home turf, their consumers do not care much about technology any more. It is about brand, service, image and value that OTT service providers are winning consumers mind share. Here lies the risk and opportunity. Operators need help to evolve and re invent the mobile value chain. 

The value proposition of vendors must evolve towards solutions such as intelligent roaming, 2-way business models with content providers, service type prioritization (messaging, social, video, entertainment, sports...), bundling and charging...

At the heart of this necessary revolution is something that makes many uneasy. DPI and traffic classification, relying on ports and protocols is the basis of today's traffic management and is becoming rapidly obsolete. A new generation of traffic management engines is needed. The ability to recognize content and service types at a granular level is key. How can the mobile industry can evolve in the OTT world if operators are not able to recognize a content that is user-generated vs. Hollywood? How can operators monetize video if they cannot detect, recognize, prioritize, assure advertising content?

Operators have some key assets, though. Last mile delivery, accurate customer demographics, billing relationship and location must be leveraged. YouTube knows whether you are on iPad or laptop but not necessarily whether your cellular interface is 3G, HSPA, LTE... they certainly can't see whether a user's poor connection is the result of network congestion, spectrum interference, distance from the cell tower or throttling because the user exceeds its data allowance... There is value there, if operators are ready to transform themselves and their organization to harvest and sell value, not access...

Opportunities are many. Vendors who continue to sell SIP, IMS, VoLTE, Diameter and their next generation hip equivalent LTE Adavanced, 5G, cloud, NFV... will miss the point. None of these are of interest for the consumer. Even if the operator insist on buying or talking about technology, services and value will be key to success... unless you are planning to be an M2M operator, but that is a story for another time.

Pay TV vs. OTT part V: appointment vs. on-demand

The recent emergence of LTE broadcast and eMBMS has prompted many companies to bet much R&D and marketing dollar on the resurgence of the mobile TV model. 

I have trouble believing that many mobile users will be tuning-in "en masse" at regular appointment to watch their favorite show on a mobile device. 

There is nothing wrong with Pay TV, its audience is stable-ish and while most would see OTT services compete for these eyeballs, I see them as a more complementary play. Pay TV is here to stay and I do not see cord cutting as a credible threat in the short term, more cord shaving or cord picking.

Many have been developing and promoting mobile TV models in the past either through broadcast or unicast technologies. The long defunct services from Qualcomm (MediaFLO) and DVB-H should serve as cautionary tales to those who are betting on the next generation of broadcast services. 

Many fail to understand that mobile TV is not attractive to most people in many circumstances. If you are like me, you will watch TV programs, by order of convenience:

1. When I want, at home, on my PVR (so I can skip the ads)
2. Live, at home, when it is time sensitive content ( news, sport event, ceremony...)
3. At a bar, live, when I want to watch sport live with friends or strangers
4. On a tablet at home (wifi) when I want to watch something else/more than the main screen
5. On a tablet at hotel /airport (wifi) ...etc... when I want to watch premium content catch up
6. On a phone / tablet (cellular) if there is no other choice

Don't get me wrong I watch a good amount of video on mobile, just not TV programs. I remember living in Switzerland some 10 years ago and having one of the first video phones

that would perform video calls and stream mobile TV. Past the novelty aspect, no one was watching TV on their phone then, and it wasn't due to network capacity or video quality. Having a video phone then was seriously cool but that did not take away the fact that the TV content I wanted to watch was not available when I wanted to watch it. My Sonyericsson K600 (remember?) joined my first Smartphone (Philips Ilium, I designed it at Philips) and my first MMS phone (ericsson T68i) in my private museum together with my first PDA (I sent the world's first picture message on a CDMA iPAQ in 2002). 

This is mostly due to the fact that TV is an appointment experience. I like to be comfortable watching TV because I watch only very specific programs. When I sit down to watch TV, I mostly know beforehand what I will watch. The videos I watch on mobile are not necessarily only short form content but I don't mind being interrupted as much because in my mind, it is mostly light entertainment that does not require concentration nor continuity. It is also mostly serendipitous in nature, I do not necessarily plan what I will watch in advance. 
I know that my children and their elder's behavior is similar. They might watch more long form content on their mobile than me but they are mostly not watching TV content. 

While some see broadcast as a means to considerably reduce video load on mobile networks, I think they are missing the point. TV by appointment is a very small portion of the preferred usage, for very specific content, in very specific circumstances. Broadcast TV on mobile makes very little sense apart from niche usage (stadiums,...). 

I don't think that because LTE offers  better network capacity, higher speeds, better quality pictures it will make a better mobile TV service. Don't think for a second that subscribers will pay more than a couple of bucks per month (if anything) to have a TV experience on mobile. People pay for quality, relevance and immediacy on mobile, not the best attributes for broadcast. So before you think about "monetizing" my mobile TV experience, think hard because I won't pay for TV broadcast on mobile.

If you haven't read the other posts in this series, you can find them here for context.
Pay TV vs. OTT:
Part I: The business models
Part II: Managed devices and services vs. OTT
Part III: CE vendors and companion screens
Part IV: Clash of the titans

The war of machine 2 machine: Internet of nothing?

A recent Tweet conversation got me thinking about all the hoopla about machine-to-machine / internet of everything.

Many telecom equipment manufacturer hail the trend as the next big thing for wireless networks, both a bounty to be harvested and a great opportunity for new revenue streams.

There is certainly a lot to think about when more and more devices that were not designed for real time connectivity are suddenly able to exchange, report, alarm... All these devices that could have well suited rudimentary logging software or technology, most of the time for manual retrieval (think your home gaz, water  or electricity meters being read by a technician) could in the future be eligible for over the air data transfer.

A similar discussion I had at LTE world Summit where I was chairing the data explosion stream comes to mind. A utility company in Italy, I think, had rolled out these "smart" meters. The implementation in labs was flawless, the utility was going to save millions, with only a handful of employees monitoring the data center instead of hundreds scouring the countryside reading manually meters. What was unexpected was that all meters had the same behavior, sending keep-alive and reporting logs at the same time. This brought the wireless network down, in a signalling and payload storm that was self-inflicted.

When I look at all the companies that have created apps with no knowledge of how a phone or a mobile network behaves, I can't help but think about the consequences of meters, cars, irrigation sensors, gaz turbines, fridges and traffic light trying to send snippets of data and signalling through a wireless network with no understanding of how these signals and streams will affect the infrastructure.

This immediately bring to mind horrific headlines: "Sheep herds monitoring device bring down network in New Zealand!". "Water and electricity meters fighting over bandwidth..."

More seriously, it means all these device manufacturers will need to get some serious programmers who understand wireless not only to put the transmitters on the devices but also to code efficiently so that signalling and payload are optimized. Network operators will also need to publish best practices for M2M traffic in term of frequency, amount, etc... with stringent SLAs since most of this traffic will be discrete (subscription paid with service or device, no usage payment).

LTE world summit wrap up: VoLTE, Joyn, Loons and laughs

I was this week in gray Amsterdam for the LTE World Summit, where I chaired a track on mobile data explosion.
The atmosphere at the show was pretty upbeat, with over 2000 attendees happily walking the show floor and in and out of the various tracks, ranging from the co-located Sim-posium and Connected Car summit to the various monetization and technology tracks around data, video and VoLTE. The show was well organized and the alternation between round tables (mind share sessions on Monday), presentations, and panels was well executed.

I have to confess I was surprised by the large amount of time dedicated to VoLTE, Joyn and RCS, considering how uninteresting these subjects are (to me at least).

Throughout a few interactions I had at the show, I was reflecting on how mobile telephony continues to surprise and entertain me. There are many causes for laugh, for different reasons. 

On one hand of the spectrum, you have the wonderfully peculiar and whimsical announcement from Google on project Loon. A network of stratospheric balloons beaming internet for all, is ludicrous, crazy and beautiful. It shows a capacity to think out of the box and a capacity to try and address global issues by breaking convention that is missing in many boardrooms.

Some of the operators I was speaking with had a different kind of laugh, particularly when the Loon project is juxtaposed with Google's plan to build, run and operate mobile networks in sub-Saharan Africa and South East Asia... That is worth a good laugh. 

On the other hand of the spectrum, you got VoLTE and Joyn / RCS initiatives, who make me laugh twice as hard. I will admit to not being a specialist on either, but I can't fathom, why I should care about having a voice service carried over circuit switch or IP. I am a bit of a technology enthusiast and frankly, I don't get it. Particularly when vendors and some operators are touting use cases that were already making me laugh ten years ago when looking at SIP based communication / IMS.
Who cares whether you can have your call ringing on your 7 devices at the same time or whether you can have your call forwarded automatically from your tablet to your phone when you leave the room.... come on, let's be serious. If you are implementing VoLTE for infrastructure savings and scalability, that's great, but let's not have technology trying to dictate usage, that's just silly.

Sillier still is Joyn. It is kind of sad whenever operators try to compete with a content / service company on their own ground. I know that OTT messaging has hurt many operator's bottom line. This is the nature of disruption. 

You cannot compete with OTT by trying to offer and OTT-ish service, that is clunkier, awkward and that you want to "monetize". Come on, get real. First mover advantage is key in OTT service launch and there is not much room for me-too strategies. As an operator, you have two choices: innovate or collaborate. Create a new service, a new experience, or facilitate, enrich existing services even if they're not yours. Customers are not savvy technologists, they are savvy shoppers. It is about creating a better experience, stop listening to vendors trying to force-feed you new technology and start thinking new services.

Yay! free mobile broadband for all: Cisco and Google

Cisco

I don't like blogging on Friday. You people's mind is already on week-end and you don't care as much for the joys and anguish of the OTT video industry. I couldn't help it today, though...

Cisco VNI 2013 mobile video growth

As Cisco released the latest iteration of its Visual Networking Index, its CEO, John Chambers predicted at "All things D" D11 conference that improvements in mobile networks architecture and topology will progressively reduce costs and that mobile data will become free...
Not less expensive, inexpensive or cheap... free.
Wow, I am not sure how that happens. With the industry spending $300+ billions per year to increase networks capacity, and signs that LTE might need an LTE Advanced injection sooner than anticipated, the comment seems curious.
Cisco wants, like most of the enterprise vendors in the market to make wireless networks more IT than Telco. That means less differentiated boxes, more i/o, more centralized control, no proprietary interfaces, hardware, protocols. 
This is a good aim, but the reason why the Telco market has been historically highly proprietary has as much to do with its idiosyncrasies and politics (GSM, TDMA, CDMA, WIMAX, WCDMA, LTE FDD and TDD...IMS) than vendors. "Standards" have emerged by necessity but have always been the smallest common denominator for networks and functions to behave, leaving wide margin for vendor differentiation and proprietary "enhancements". That needs to be resolved first before you can see costs come down. At last, costs coming down do not necessarily equate prices going down... unless content starts to subsidize bandwidth like YouTube / Netflix with internet backbone. Talking about Google/YouTube....

Google

This week as well, Google made the headlines, speaking to the Wall Street Journal. The company was quoted having plans to deploy and operate wireless networks in Sub Saharan Africa and South East Asia. Orange CEO was boasting having made Google pay for traffic in Africa in February, that was a short victory.
After subsidizing internet infrastructure for YouTube traffic, implementing large scale wifi and fiber networks, Google is to build and operate wireless networks.The idea is that Google would build these networks to provide wireless broadband services that are proving to be great enhancements in people's quality of life, communication and prosperity, such as watching cats fall off TV sets on YouTube or playing massive multiplayer online games on Facebook.
More seriously, the implications of this move are tremendous. Google could have a completely integrated vertical content delivery form creation, to aggregation, to delivery and display. What will Google want in exchange for these investments? Maybe nothing, the CEO was quoted several times having Google working on wide ranging non-profit goals....
But then again, indirectly, maybe you will need an Android device to access these networks, or maybe Google talk, chat... will be free on these networks, but you will have top pay to use other apps or services...
Certainly, connecting the next billion subscribers to wireless broadband for free is an inspiring goal. The skeptics and cynics will see here another way to dominate a market by vertical integration.

Jury is out, but if you are a wireless network operator in these regions, you better start thinking about what that could mean to your business.

All bytes are not created equal...

Recent discussions with a number of my clients have brought to light a fundamental misconception. Mobile video is not data. It is not a different use case of data or a particular form of data, it is just a different service. The sooner network operators will understand that they cannot count, measure, control video the same way as browsing data, the sooner they will have a chance to integrate the value chain of delivering video.

Deep packet inspection engines count bytes, categorize traffic per protocol, bearer, URL, throttle and prioritize data flow based on rules that are video-myopic. Their concern is of Quality of Service (QoS) not Quality of Experience (QoE). Policy and charging engines decide meter and limit traffic in real-time based on the incomplete picture painted by DPIs and other network elements.

Not understanding whether traffic is video (or assuming it is video just based on the URL) can prove itself catastrophic for the user experience and their bill. How can traffic management engine instantiate video charging and prioritization rules if they cannot differentiate between download, progressive download, adaptive bit rate? How can they decide what is the appropriate bandwidth for a service if they do not understand what is the encoding of the video, what are the available bit rates, if it is HD or SD, what is the user expectation?

Content providers naturally push a content of the highest quality that the network can afford, smartphone and tablets try and grab as much network capacity available at the establishment of a session to guarantee user experience, often at the detriment of other connections / devices. It is wrong to assume that the quality of experience in video is the result of a harmonious negotiation between content, device and networks.
It is actually quite the opposite, each party pulling in their direction with conflicting priorities.
User experience suffers as a result and we have started to see instances of users complaining or churning due to bad video experience.

All bytes are not created equal. Video weighs heavier and has a larger emotional attachment than email or browsing services when it comes to the user's experience of a network's quality. This is one of the subjects I will be presenting at Informa's Mobile Video Global Summit in Berlin, next week.

Openwave Mobility turns a corner ?

Busy week for Openwave Mobility. As a reader of this blog, you will have lamented over the trials and tribulations of Openwave over the last two years.

The company seems to officially have turned a corner this week. Openwave always had a good strategic vision of the evolution of mobile data services and their business model. The internal crisis the company has been through had considerably slowed down its ability to execute. 

Since its divestiture to Marlin Equity Partner, the company seems to have engineered a come back, going back to the basics of focusing on its core competencies, while partnering with leading vendors for complete solutions offering. The latest announcements (here and here) show a maturing capacity to provide innovative traffic steering and video monetization capabilities that have been greatly needed in the ecosystem. Partnering with Sandvine (TSX:SVC) is smart as it allows both independent companies to provide an attractive solution offering, countering the likes of Allot and ByteMobile with a best of breed partnership vs. in house development / acquisition.

As announced previously, it is inevitable that traffic management, optimization and charging function should merge, when it comes to video as illustrated by the various moves in this market.

You can read more about Openwave Mobility strategy and ambitions in this space in my report.

Video optimization market shares 2013

This is the time of the year, when, after releasing the mobile video optimization 2013 report, I provide a little insight on the movers and shakers of that market segment and their progress over the past year.

As usual, I provide market share calculations in term of deployment per vendor, the unit being one operator / country. For instance, Verizon Wireless counts for one deployment, even though the operator might deploy 40+ data centers. Groups such as Vodafone, Deutsche Telekom or Telefonica count for each of the properties where the technology is deployed.

The market share calculations are based on a proprietary {Core Analysis} database, collecting data such as vendors, resellers, value of the deployment in term of total cost of ownership for the operator, operator name, country and region. These data are cross-referenced from vendors' and operators' individual disclosures. This database also includes over 150 opportunities in video optimization that are at different stage of maturity (internal evaluation, vendor trial, RFI, RFx...) and will close over the next 18 months.

The market share is valid at the time of publishing but change on a weekly basis, as new deals are awarded.

The market share in term of revenue is not published here but is available as part of my workshop on the video optimization market. The rankings in term of revenue per vendor are quite different from the installed market share, as different price strategies and different geographic markets are considered.

Market shares

• ByteMobile

ByteMobile is still the market leader in this segment, post Citrix acquisition. The company, with an estimated 35% market share remains stable and has grown with the market in the last year.

• Mobixell Networks

Mobixell Networks ascends this year to the second place in our ranking, with 19% market share. The company has grown faster than the market in term of share acquisition.

• Flash Networks

Flash Networks is in third place with a 15% market share. The company has seen its market share grow slower than the market last year.

• Venturi Wireless

Making its entry in fourth place this year is Venturi Wireless, who claims most of its deployments through an OEM channel with a market share of 10%. The company has been growing faster than the market last year.

• The rest

The remaining 21% is shared between (by alphabetical order) Allot, Avvasi,  Mahindra Comviva,  Openwave Mobility, Opera Skyfire and Vantrix.

Question? comments? please do not hesitate to contact me.

The sampling this year is larger than last year, as a result from new disclosures from emerging vendors that were stealth / not public last year. As a result, market shares are a little different and should not be directly compared with last year's, since some of the disclosures show deployments that predates last year's calculations.

Patrick Lopez to speak at NAB show on cloud adoption

Patrick Lopez to speak at DCIA CLOUD COMPUTING CONFERENCE 

Third Annual Conference at the NAB Show to feature cloud industry experts

Washington, DC – Las Vegas, NV April 02, 2013 – The Distributed Computing Industry Association (www.DCIA.info)  today announced the first wave of speakers to participate in its CLOUD COMPUTING CONFERENCE at the 2013 NAB Show, the third annual DCIA event within the NAB Show, taking place on Monday and Tuesday, April 8th-9th, at the Las Vegas Convention Center in Las Vegas, NV.

“We’re thrilled that our opening keynote speaker will be Amazon Web Services’ Global Digital Media Business Strategy Leader Mark Ramberg; and that our marquee keynotes include Disney’s Program Director, Cloud Hosting, Chris Launey, and IBM’s Lead Partner for Global Business Services, Saul Berman,” said DCIA CEO Marty Lafferty.

“We’re also very pleased to have on our agenda Patrick Lopez, CEO of {Core analysis}  who will speak on Industry Update on Cloud Adoption. How are cloud-based technologies currently being deployed throughout the audio/video ecosystem? ” added Lafferty.

"Cloud computing is an emerging and important trend in the treatment and management of video and audio assets. I am pleased to be participating in such an important event and panel and to share my experience in the adoption of cloud in mobile networks" said Lopez.

CCC at NAB will feature more than seventy speakers in a two-day event track that will demonstrate the new ways cloud-based solutions are providing increased reliability and security, not only for commercial broadcasting and enterprise applications, but also for military and government implementations.

From collaboration during production, to post-production and formatting, to interim storage, delivery, and playback on fixed and mobile devices, to viewership measurement and big-data analytics, cloud computing is having an enormous impact on high-value multimedia distribution.

More information is available at http://bit.ly/Y4wrII and delegates can register to attend at http://bit.ly/TGKgjV.

About the DCIA

The DCIA is an international trade organization, established in 2003, with more than one-hundred industry-leading member companies, including software developers, broadband network operators, and content providers. The DCIA conducts working groups, oversees political initiatives, and publishes the weekly online newsletter DCINFO.

About {Core analysis}

{Core analysis} is a boutique industry analyst practice focusing on the intersection of mobile, video and OTT. The company releases a yearly report on the state of mobile video and presents at influential industry events such as NAB, Informa's mobile video global summit and LTE series.

Media Contacts

Kelly Larabee

+1 410-476-7965

kelly@dcia.info

Patrick Lopez

+1 514 823 0314

patrick.lopez@coreanalysis.ca 

Video optimization 2013: Executive summary

Video accounts for over 50% of overall data traffic in mobile networks in 2013 and its compounded annual growth rate is projected at 75% over the next 5 years. Over 85% of the video traffic is generated by OTT properties and mobile network operators are struggling to accommodate the demand in a profitable fashion. New business models are starting to emerge, together with KPIs and technologies such as video optimization to manage, control and monetize OTT video traffic. This is the backdrop for this report. 

In September of 2012, Jens Schulte-Bockum, CEO Vodafone Germany shocked the industry in announcing that the 10% of their customer base who have elected to shift to their LTE network had a fundamentally different usage pattern than their 3G counterparts:

“Voice, text, other messaging and data - everything that makes money for us - uses less than 15%. The bit that doesn’t make money uses 85% of the capacity. Clearly we are thinking about how we can monetise that. ”

“The bit that does not make money for us” is mobile OTT video.

The Bundesnetzagentur (BNetzA) Germany’s telecom regulator has mandated that the roll out of LTE be first in rural areas, before covering urban centres, thus ensuring a quasi 100% geographical coverage at launch. While many point out that the 85% of video transiting through the 4G network are a manifestation of cord cutting, it is not the exclusive use and remains a valid LTE use case.

2012 was the first year video was responsible for over half of global mobile data traffic. Over 85% of that video traffic is OTT, generating little revenue for mobile network operators.

As 4G deployments roll out across the globe, many network operators had envisioned that this additional capacity was sufficient to bridge the video traffic growth, allowing enough headroom for the creation and roll-out of new services. The exponential growth of video usage, encouraged by the increasing penetration of large screen devices, the introduction of higher definition content and the growth in adaptive streaming technology, is not likely to abate. It looks like by the time LTE has reached mass market penetration, many networks will find themselves still congested, with an unbalance cost / revenue structure due to the predominance of OTT video.

In reaction to this threat, many mobile network operators transitioned generous unlimited data plans to more granular charging methods, oftentimes implementing throttling and caps to reduce unprofitable traffic growth. These methods were implemented with various results but little success in monetizing OTT video traffic without alienating the consumer.

New technologies have made their debut, such as small cells, heterogeneous network management, traffic offload, edge caching, edge packaging, traffic shaping, cloud-based virtualized network functions… and new business models are starting to emerge, reinventing relationships between network operators, content providers, and device manufacturers.

Video optimization in 2013 is a mature market segment, deployed in over 150 networks globally, it has generated over $260m in 2012 and is projected to generate close to $390m in 2013. Video optimization was, in its first instance sold as a means to reduce video volume, thus potentially deferring investment costs for network build out. It was a wrong assumption, as most deployments in congested networks saw no reduction in volume and little deferment of investment. In most case, the technology allowed more users to occupy the network in congested areas. A new generation of products and vendors are starting to emerge, to manage the video experience in a more nimble, granular fashion.

{Core Analysis} believe that video optimization will continue to be deployed in most networks as a means to control and manage the video traffic. 

{Core Analysis} advises Opera on Skyfire's acquisition

{Core Analysis} is pleased to announce that it acted as the exclusive technical advisor to Opera Software in its acquisition of Skyfire Labs.

Mountain View, California,  Oslo, Norway and Montreal, Canada — February 15, 2013

The acquisition price includes a mix of cash and stock, with an upfront consideration of US$50 million (including US$8 million of cash on the Skyfire balance sheet) and performance based earn-out payments over three years, including US$26 million in cash held in escrow and funded upfront, that can bring the total deal size to $155 million.

The Opera acquisition of Skyfire is expected to close before March 15, 2013.

Skyfire, headquartered in Mountain View, California,allows mobile operators to leverage cloud computing to optimize virtually any video and other multimedia on crowded cell towers, including 3G and 4G LTE networks. Rocket Optimizer on average provides mobile networks a 60 percent boost in capacity by reducing the size of video and other multimedia content as needed to fit the available bandwidth. 

Skyfire currently counts three large U.S. mobile operators as customers for its Rocket Optimizer and Skyfire Horizon solutions, and is in trials with ten other operators around the world.

“Opera and Skyfire are a natural fit,” said Lars Boilesen, CEO, Opera Software. “Both companies have evolved far beyond their browser roots. Skyfire adds capabilities to our portfolio around video, app optimization, smartphones and tablets, and strength in North America. With video expected to consume over two-thirds of global mobile bandwidth by 2015, and as time spent on Android and iOS apps explodes, we are excited to extend Opera’s solutions for operators.”

“Opera practically invented cloud compression to improve mobile user experience, and the team at Skyfire is proud to join forces and advance cloud solutions together,” said Jeffrey Glueck, CEO of Skyfire. “Opera’s over 100 carrier relationships, global sales team, and delivery organization can accelerate the global commercialization of Skyfire’s technology. Opera´s Mediaworks advertising unit with AdMarvel, Mobile Theory and 4th Screen Advertising will strengthen Skyfire Horizon by offering mobile operators a complete turnkey solution including ad optimization, ad sales, and rich analytics. The synergies across all the product lines for both companies are tremendous.”

“The market opportunity for video/media optimization solutions geared towards operators and consumers is significant. After a thorough evaluation of this market, we strongly believe Skyfire is the clear leader for the future in this space”, said Erik Harrell, CFO/CSO of Opera.

This transaction is a proof of {Core Analysis}' market leading strategic and technological know-how in video OTT, mobile video and video optimization M&A.

For More information, please contact Patrick Lopez.

Patrick Lopez
CEO
{Core Analysis}
patrick.lopez@coreanalysis.ca

The law of the hungriest: Net neutrality and video

I was reflecting recently on net neutrality and its impact on delivering video in wireless networks. Specifically, most people I have discussed this with, seem to think that net neutrality means doing nothing. No intervention from the network operator to prioritize, discriminate, throttle, reduce or suppress a type of traffic vs another, whether based on a per subscriber, location, device or service.

This strikes me as somewhat short sighted and not very cogent of how the industry operates. I wonder why net neutrality is to apply to mobile networks, but not to handset manufacturers, app providers or content providers for instance.

There has been several depictions of some handset vendors or app providers having implemented method that are harmful to networks either unwittingly or downright predatory. Some smartphone vendors, for instance implement proprietary variations of streaming protocols to grab as much capacity of the network as possible, irrespective of the encoding of the accessed video, to ensure a fast and smooth video delivery to their device...at the detriment of others. It is easy to design an app or a browser or a video service that would use as much of a network capacity as possible, irrespective of the actual need for the service to function normally, which would result for a better user experience for the person accessing the service / the app / using this device but a degraded quality of experience for everyone else.

Why is that not looked after by net neutrality regulatory committees? Why would the network provide unrestricted access to any app / device / video service and let them fight for capacity without control? Mobile networks become ruled then by the law of the hungriest and when it comes to video, it can quickly become a fight dominated by the most popular web sites, phone vendors or app providers... I think that net neutrality, if it has to happen in mobile networks must be managed and that the notion of fair access extends to all parties involved.

2013: the year of Big Video

In September of 2012, Vodafone Germany shocked the industry in announcing that video was consuming 85% of its LTE network.
As we have started a brand new year and vendors and operators alike are finalizing plans for Mobile World Congress, I thought it would be timely to review what the main vendors of video optimization were up to in 2012.

Allot / Ortiva Wireless:
The company, with the acquisition of Ortiva Wireless in April and Oversi in July has certainly made great strides in their strategic plan to provide a one-stop-shop traffic management solution to its customers. Between DPI, policy management, charging functions, transparent caching and video optimization for mobile, enterprise and fixed broadband, the company has a large tool set and addressable market. The challenge will be in the integration of the acquired technologies and talents, together with the formulation of a differentiating, competitive solutions offering that goes beyond analytics, charging, managing...

Avvasi:
The company has entered the fray with a fresh outlook. Leader in mobile video QoE measurement, they have been asked by their customers to help manage the video QoE and have launched a new product (Q-SRV) to "measure, manage and monetize" the video experience in mobile networks. One to watch in 2013.

Bytemobile / Citrix: 
The acquisition of Bytemobile by Citrix last year was a big shock for the market segment. The leading vendor in market share was acquired by an industry's outsider under the rationale to enter the mobile market. Citrix is definitely starting to tickle F5 and Cisco with Netscaler as a load balancer / proxy in mobile networks. What best introduction in the mobile space than the leader in mobile internet and video optimization? It will be interesting to watch how the replacement of Unison platform by the T3000 series, together with the suggested replacement of F5 by Netscaler plays out in the coming months...

Flash Networks:
The company started the year with a bang with 3 large tier 1 customers in video optimization (MTS russia, Globe telecom and Telekom Austria Group) announcements. Since then, it has been quiet, but the company has been busy upgrading and up selling their existing customer base. It will be interesting to see whether the company will take advantage of some of the market deals coming this year.

Huawei:
The secretive Chinese vendor has seen its market share in browsing gateway increase dramatically over the last 3 years with over 114 operators and this is the traditional Trojan horse for video optimization to enter the market. Mobile internet is becoming a focus on the company's strategy in the core network and it looks like the slides on video optimization presented last year in Barcelona are morphing into a product offering. It is still early days, but Huawei can move fast when needed.

Mobixell Networks:
The company has digested its 724 solutions acquisition and made good progress in converting its installed base and winning new deals in video optimization. Not enough to satisfy its investors, apparently, with the replacement of its CEO in December last year. The company is clearly looking for different growth parameters and it is likely that we will see more strategic activities from them in 2013.

NSN:
Not much to report for the Nordic giant, struggling to impose its vision of self organizing networks in core. The sale of its OSS/BSS division to Redknee will either see a refocusing or spin off of the video assets.

OnMobile:
The company acquired Dilithium assets in 2010 and has been struggling to have a video strategy since. They briefly considered video optimization, but video is no longer a focus for the company in 2013.

Openwave Mobility:
After a rough couple of years, seeing its CEO replacement, and the spin off to an equity venture, the company is starting to re focus and to reboot its traffic management and video optimization strategy. They have a few references in the space and are working to update their browsing gateway's installed base with video optimization. It will be interesting to see if they are up to the challenge in 2013.

Skyfire:
The company took the market by storm by launching cloud-based video optimization and simultaneously announcing Verizon Wireless as a customer and investor. Since then, with a fresh round of financing, the company has been expanding its reach to Europe. It will be good to see how cloud takes in mobile networks.

In September of 2012, Jens Schulte-Bockum , CEO Vodafone Germany shocked the industry in announcing that the 10% of their customer base who have elected to shift to their LTE network had a fundamentally different usage pattern than their 3G counterparts:

“Voice, text, other messaging and data - everything that makes money for us - uses less than 15%. The bit that doesn’t make money uses 85% of the capacity. Clearly we are thinking about how we can monetise that. ”

“The bit that does not make money for us” is mobile OTT video. As mobile video threatens to overgrow every other traffic types, operators start to look at ways to alleviate the costs associated with the necessary capacity upgrades to meet the demand, as well as strategies to monetize this large, untapped opportunity. I will be releasing my report "Mobile Video Optimization 2013" on March 15 where I will examine the latest strategies from the dominant vendors in the space.