The pay-TV industry is undergoing some significant changes. A major trend we’re seeing right now is that content providers around the world are looking to address consumers directly, without necessarily working with an operator as the middleman. For instance, HBO and CBS recently released their own OTT multiscreen services, making it possible for consumers to watch premium content on any screen without subscribing to a pay-TV offering. Since the brand of a content provider like HBO is very strong, it’s having a major impact on consumers’ appetite for OTT content.
Over the last couple of years, we’ve seen a huge increase in OTT video delivery compared with managed offerings. According to a recent report from IHS, that is not going to slow down. OTT pay-TV services are forecast to have the highest compound annual growth rate (CAGR) of any pay-TV service from 2014 to 2019.
Aside from direct-to-consumer business models, the emergence of new screens is also driving change within the pay-TV industry. Now that smartphones, tablets, and connected TVs have become an everyday part of consumers’ lives, OTT content is only a few clicks away. All consumers need to do is download an app and they have instant access to a whole library of OTT content anytime, anywhere, on any screen.
If operators want to remain competitive in today’s OTT world, they need to leverage their unique assets: control of the core network, including the last mile and the access equipment in the home. By doing this, operators can ensure that their video apps benefit from the best quality on all devices. Expanding into the OTT environment isn’t, however, without challenges.
To launch an OTT service, operators need to begin streaming in adaptive bitrate (ABR) formats such as HLS, HSS, HDS, and MPEG-DASH. They also need to maintain two ecosystems: IPTV/cable TV with transport streaming on one side and ABR formats on the other. The most cost-effective approach is to unify these two worlds, utilizing the same encoders, CMS, and delivery solution leveraging ABR technologies.
This leaves operators facing one final, big hurdle: the devices that use ABR streaming technologies can only receive unicast content, which means that if thousands of people are watching the same live content, the resources in the network will be used thousands of times. This method is completely unscalable, preventing operators from unifying video delivery platforms.
The solution is multicast ABR technology. Broadpeak is a pioneer in this field, having created nanoCDN, the world’s first video delivery technologies that allows operators to rely on certain components of a subscriber’s home network, such as broadband gateways and set-top boxes (STBs), by making them an extension of the operator’s CDN.
The concept is simple: operators can use the multicast capabilities of their own networks to transport ABR content while relying on end-user devices to convert it back into unicast. All of this takes place in a way that is completely transparent to end-user devices, in terms of encoding format, streaming format, and DRM.
There are two main components of this solution:
- a multicast-to-unicast converter located in the head-end, which takes ABR encoded content upon input (with DRM in any format) and encapsulates it into multicast; and
- an agent located in the home gateway or STB, which then transforms the multicast back into unicast.
With a technology like nanoCDN, operators can realize tremendous bandwidth savings in the network. Despite how many viewers there are, the content is carried in the network only once. For example, consider that an operator has 1 million concurrent sessions for a live multiscreen service. The average video bitrate is 3Mbps, putting 3 Tbps of load on the network. There are 50 live channels, with three layers and a cumulative bitrate of 6 Mbps. If the traffic is distributed between three points of presence (PoP), there would be 1 Tbps per PoP. The operator’s equipment capacity is as follows: 1Tbps for the router, 30 Gbps for the streaming video servers, and 40 Gbps for the CMTS downlink. The equipment required with and without using nanoCDN is shown in the figure above
This approach can also be used by online video service providers. Currently, a content provider who wants to deliver live TV channels via OTT has to sign a contract with a CDN service provider that is paid according to the volume of content that transits the network. For major events like sports or live shows, this can represent a considerable amount of data and money. Ultimately, this data has to be carried by operators who deliver it to their subscribers. If it is done without any optimization in the network, the quality will be uncertain.
By deploying a multicast ABR technology in their network, such as nanoCDN, operators can monetize this solution with content providers. There are three key advantages here. First, it reduces CDN costs for content providers, as they will only pay for a contribution link for the traffic that goes to the operator. Secondly, this approach reduces transit costs for the operator while increasing revenue by enabling operators to monetize the service, working with content providers, at a fraction of the cost that CDN as a service requires. Finally, this solution improves the quality of service for the end-users by erasing contention points in the network. This is probably the most important step, as content delivery is what defines the user experience.
The growing consumer demand for OTT multiscreen services is making a big impact on the industry. Operators and content providers that work together, deploying advanced CDN technologies that are capable of delivering video content anytime, anywhere, on any device, and over any network while providing a superior QoE to customers, will ultimately be successful in driving new revenue and increasing subscriber satisfaction. When everybody is watching, quality counts the most.