Part II
Part III
In 2014, mobile video is a fact of life. It has taken nearly 5 years for the service to transition from novelty to a growing habit that is quickly becoming an everyday occurrence in mature markets. Nearly a quarter of YouTube and Netflix views nowadays are on a tablet or a smartphone. Of course, users predominantly still stream over wifi, but as LTE slowly progresses across markets, users start to take for granted the network capacity to deliver video.
Part III
In 2014, mobile video is a fact of life. It has taken nearly 5 years for the service to transition from novelty to a growing habit that is quickly becoming an everyday occurrence in mature markets. Nearly a quarter of YouTube and Netflix views nowadays are on a tablet or a smartphone. Of course, users predominantly still stream over wifi, but as LTE slowly progresses across markets, users start to take for granted the network capacity to deliver video.
Already, LTE
networks start to show signs of weariness as video threatens the infrastructure
and the business model of mobile content delivery.
For those who are familiar with my blog, I have been
complaining for a while that mobile carriers are not doing enough to make their
networks more video capable. You would think that with anywhere between 40 to
70% of the data traffic, video would warrant more interest and effort than what
we see today. Many studies show that although video is the dominant and fastest
growing application in mobile, its service quality is mediocre. Conviva claims
that about 15% of videos in wifi and cellular networks never actually start,
while Skyfire shows that close to 50% of consumers experience video problems
“often” or “all the time” in the US.
Of course, part of the issue here is that 85% of these
videos streamed over mobile networks are from OTT properties. In many cases,
network operators and content providers are at odd when it comes to managing
the service. Mobile carriers essentially see these services as non-paying
passengers on their transport networks and are either looking at encouraging
the offloading of this traffic or to at the very least limit the space that
they occupy, particularly in congested areas.
Content providers are predominantly designing services for
the internet. It just happens that some of its delivery (increasingly) occurs
on mobile devices in cellular networks. The technology and economics of their
service is based on the internet model, where bandwidth is plentiful and they
are already paying for reach (CDNs) and access (transit and peering). Paying
wireless carriers for essentially the same services was a no-starter until a significant part of their
customer based started accessing their services wirelessly on smartphones and
tablets. As multiscreen and mobile becomes an important use case, content
providers are downloading a streaming player into your devices when you start
playing web video on your browser or are enjoining you to use their apps. These
are defensive moves aimed at extending the control of the user experience. The
reality today is that there are too many players with diverging controlling
interests in the delivery of mobile video to make it a good experience. Soon,
one will hope, the actors will recognise that no one can control the mobile
delivery service end-to-end, forcing cooperation. We are starting to see signs
of this with announcements such as Vodafone UK and Netflix exclusive
partnership.
We are now at the crossroads where the penetration of mobile
devices, the ubiquitous access to fixed and mobile broadband have redefined how
video is produced and watched, but not yet how it is delivered.
What would be the attributes of a Video Delivery Network?
Well, ideally it would be designed for both mobile and fixed
IP delivery. If we look first at the services it will enable and the business
models it is likely to foster, such a network will need to be able to
accommodate both live linear video, as well as on demand streaming. It will
have to be designed to unlock advertising in a contextually relevant manner and
provide frictionless compensation and service level agreement (SLA) management
between the actors. Furthermore, models such as pay per use, duration passes,
service vouchers, gift cards and sponsored usage will also have to be built in.
The corollary from these assumptions is that, in essence, a collaborative
service management method is necessary between consumers, announcers, networks
and content providers.
What would this network look like, from a technology standpoint?
We have some examples today of partial implementation of
these services, in a disjointed, vertical manner. Netflix has transitioned from
using commercial CDNs to implementing their Open Connect network. Google Global
Cache is extending the content provider’s reach into carrier networks. If we
draw this trend to its logical conclusion, a well managed video network will
need to have end-to-end managed quality of experience. The only way to achieve
this is to integrate player/app/browser/user experience with Radio Access
Network (RAN) congestion management, which itself provides explicit data to the
Core network for active traffic management that is policy-managed by a
negotiated SLA/QoE between content provider, announcer and network.
Effectively, this would force network operators to open APIs for announcers and
content providers to control the delivery of the content from a quality/speed
standpoint. This is the carrier’s contribution to the bargain. The resulting
quality of delivery for premium services will be a negotiation in real-time
between the demand (content provider and announcer) and the supply (network
conditions) at this point in time, for that service, for this user in a
specific location. The quality rating at the end or throughout the session
should be used as a metric in the calculation of the transfer price of the
service. All this can be arbitrated and managed by SLA as it is the case on the
internet today.
For freemium, free to air and advertising based services,
privacy and regulatory provisions would warrant that each party involved in the
ad targeting would retain the use of the data they collect and provide a
geographic / demographic / contextual abstraction layer to determine the ad
selection. As a result, carriers will need to fundamentally change the way data
is collected and analysed, transitioning from operational to marketing view if
they wish to monetize the user segmentation. The ad insertion itself should
occur as close to the user as possible to enhance contextual and individual
granularity. This requirement implies that for encrypted traffic, encryption as
well occurs at the point of ad insertion and not before to enable targeting.
Technologically, the delivery method should rely on adaptive bit rate DASH to
make best use of the network resources, but the encoding should occur in the
carrier’s network, with mezzanine files pre-cached and controlled by the
content providers.
That ad insertion, encoding and encryption location has been
a moving target in the past years because it is where the control point is from
a content provider’s perspective. They have allowed CDNs in the past to perform
these tasks because they had no other choice, they will need to allow carriers
to perform the same to unlock this jigsaw. This is the content provider’s
contribution to the bargain.
Inevitably, announcers will have to create an inventory of
ads that are mobile specific, not only targeted at devices but at contexts of
mobility. Measured quality, high engagement rate and hyper targeted
segmentation should help raise CPM in that market.
At last, at the device and radio level, there is no reason
that content that is popular would have to go all the way to the content
provider’s origin servers to be delivered. An intelligent video service would
be able to detect if the service requested is live and linear and watched by
others in the area and switch to a broadcast delivery. If the service is on
demand, but the content exists closer to the user’s location that is where it
should be served from, being from someone else’s device, a network PVR or a
cache in the RAN or the core network. There is where network virtualization
will take its full capacity, when virtualized storage and networking function can
be pushed down to the device level, peer-to-peer transmission will become
possible.
What these trends indicate is that a video delivery network
will need to be vertically integrated. The boundaries between devices, radio,
core and content provider networks will subside, with automation,
programmability and virtualization enabling the efficient delivery and
management of highly reliable and profitable video service. These questions and more are reviewed in details in my latest reports "Video Monetization and Optimization 2014" and "SDN - NFV in Wireless Networks".
