Emerging Service Models Spell Opportunity for Smart Pipe Operators
Emerging Internet-driven trends in the pay TV business portend unprecedented opportunities for network service providers who implement a distributed network architecture with sufficient intelligence and flexibility to keep pace with market changes wherever they lead.
The need to accommodate anticipated consumer demand for multiscreen services has prompted a long-running debate over NSP migration strategies that invariably envision high outlays for replacing legacy set-tops and funding enough bandwidth to deliver massive volumes of unicast IP streams on top of the traditional TV services. However, technology advances embodied in Edgeware’s Distributed Video Delivery Network (D-VDN) framework have radically changed this perspective by creating a network-centric migration path that saves money on bandwidth, cuts operations costs, exploits the growing ubiquity of connected TVs and other devices and accelerates service development on a pay-as-you-grow basis.
While it’s impossible to predict how new strategies in play among TV programming suppliers and aggregators will impact the legacy premium service model, NSPs can ensure they’re prepared for whatever the market brings by taking the most cost-effective approach to addressing today’s requirements for unicast services. As evidenced by the growing number of NSPs who are adopting this strategy in North America and abroad, Edgeware’s D-VDN provides operators of every size and description the flexibility to balance legacy and emerging service models to maximum advantage now and well into the future.
The New Premium Service Mandate
Market Trend Lines
For some time analysts and industry executives have been arguing over what impact so-called over-the-top (OTT) video would have on subscriber cord cutting and cord shaving, with people on each side of the debate pointing to the latest blips in usage patterns to bolster their cases. In truth, the factors that will shape such trends have yet to take hold in the marketplace on anything like the scale that’s needed to gain a true picture of their impact on pay TV subscribers.
The more immediate concern should be what to expect from a growing base of young non-subscribers as they enter the adult consumer market. For NSPs the priority is to focus on what needs to be done to tailor services to these consumers’ needs, understanding that, to the extent such strategies succeed, they will also serve to buttress the relationship with potential cord cutters and shavers as well.
Seen in this light, the way forward for NSPs is to build their service migration strategies for a market environment where the number of viewers accessing TV programming through set-top boxes will steadily fall as connected TVs, tablets, game consoles and smartphones proliferate. Significantly, as the accompanying findings suggest (see sidebar at end of this feature), as the proportion of non-subscribing younger buyers grows, and as older buyers are prompted by aggressive TV suppliers to become more aware of their online viewing options, the TV set is likely to become a core driver to viewing entertainment online among premium TV subscribers and non-subscribers alike.
Inevitably, as this connected-device foundation draws ever more viewers to online video entertainment options, content providers from studios to cable TV networks to broadcasters will make adjustments to ensure their advertisers are reaching the volumes of viewers essential to sustaining the ad revenue base. In other words, TV programming will go where the audiences are, and so will revenues.
The Implications for NSPs
This suggests NSPs’ network strategies must be sufficiently broad to accommodate what could be significant changes in business models. While program suppliers have repeatedly stressed they have no intention of doing anything that would undermine the current pay TV model, they are also making clear they intend to exploit the power of advanced technology to give users access to content they want to watch wherever they happen to be.
Indeed, French researcher IDATE, which predicts the revenue generated globally by services delivered on connected TVs will reach $3.2 billion in 2016, says that by then, with VOD accounting for 57% of the total and advertising another 32%, Web-to-TV movies and time-shifted programming will become part of the premium service model, with important implications for NSPs. “We are indeed currently nearing the end of a double phenomenon known as cord-cutting and cord-shaving,” IDATE says in its recent report.
The Internet’s role in delivering live programming is changing as well. One good view of what’s in store can be found in the landmark role of the Internet in TV coverage of the 2012 Summer Olympics. Rather than using online merely as a time-shifted content supplement to live TV programming, NBC, BBC and broadcasters worldwide are streaming every event live using adaptive rate technology to connect every class of device to over 3,000 hours of coverage.
This is the broadcast future. Not only does IP technology provide an opportunity to deliver premium content to every screen; it allows programmers to supply much more content than can be delivered over traditional TV channels.
This represents an important opportunity for programmers who have an abundance of high-quality content that doesn’t make it into their TV broadcasts but can be used to fill potentially lucrative niche channels online. They and their advertisers recognize that the power to draw people passionate about a given topic from a global population base greatly expands the advertising dimensions for highly targeted programming.
The IP-based technology support systems enabling high-quality streaming, dynamic interstitial ad placement, multi-lingual subtitling on a per-stream basis and ready access to apps suiting every user’s interest have made such strategies possible, as evidenced by the 2012 Olympics. While details of how these capabilities will be put into play by programming networks remain under wraps, it’s clear the emerging multiscreen service paradigm will provide a very different viewing experience from what people know today as multichannel television.
It’s equally clear that programmers, in their efforts to more profitably leverage their assets, will need NSPs as much as ever. Not only will they want to sustain their revenue foundation in premium service fees; they’ll need the quality assurance provided by managed networks in order to achieve levels of consumer experience and advertising performance that go far beyond the capabilities of the unmanaged over-the-top domain.
Notwithstanding much speculation about the threats posed by online video, the interests and mutual support that have characterized pay TV from the dawning of cable remain fundamental to NSPs’ and programmers’ ability to profit from the new directions in consumer behavior. The key for NSPs is to equip their networks to exploit these common interests to maximum effect.
Challenges to Equipping Networks for the Future
The Need for a Converged Infrastructure Solution
Until now most service providers have taken a piecemeal approach to equipping networks to handle emerging requirements. First there was the need to support expanded VOD offerings. Then came initial forays into TV Everywhere with on-demand delivery of stored content to IP-connected devices, typically delivered in other-the-top mode with help from public CDNs. More recently operators have explored other means to support a more aggressive embrace of the multiscreen paradigm with distribution of live pay TV as well as stored programming to subscribers.
With the convergence of all these requirements around ever more IP-centric trends in consumer viewing preferences the time has come for a more holistic approach to network operations. NSPs require an intelligent highly versatile distribution architecture that can accommodate all near-term requirements for distribution of live and on-demand content with capacity to adjust cost-effectively to new service models over time.
That’s not to say they need to rip out what they’ve already built to serve prior needs. But their next moves should be focused on bringing everything together in the most cost effective way possible.
The service provider industry as a whole has come to a realization that equipping networks to support cache-based distributed storage is essential to maintaining cost efficiency as the volume of unicast content increases. Already, in early 2012 at a moment when multiscreen services were just getting underway, some 38 percent of overall viewing time on NSPs’ networks was spent consuming time-shifted pay TV content, including DVR-stored content as well as VOD movies and TV programs, according to research performed by Pike & Fisher.
NSPs, especially Tier 1 companies, have been drawn to use of separate distributed storage architectures to accommodate requirements in the VOD and TV Everywhere service domains, largely because these needs emerged in different timeframes. To meet VOD requirements they’ve expanded earlier centralized VOD systems using more distributed versions of legacy vendors’ updated platforms. And to address emerging TV Everywhere service requirements they’ve begun to implement private CDNs running on commodity off-the-shelf servers (COTS).
Now, as the unicast pressures intensify with ever more aggressive multiscreen service initiatives augmenting the VOD surge, it’s clear that NSPs, including smaller players who happen to be addressing these needs simultaneously, will be better served by implementing a distributed architecture platform that handles both types of requirements to maximum advantage. However, neither the distributed architecture versions of traditional VOD systems nor COTS-based CDNs are up to the task.
The Limitations of Legacy VOD and CDN Infrastructures
In the case of VOD, CDN-like strategies have been employed where high-volume content libraries are centrally located with local caching and streaming centers used as storage and launch points for high-demand content. These purpose-built systems are not designed to handle the multi-formatting and transcoding requirements of a multiscreen or TV Everywhere type of on-demand service, which means they lock NSPs into a silo approach to serving on-demand content, depending on whether it’s designated for distribution to legacy set-tops or to connected devices.
Moreover, even in the legacy set-top domain, most of these VOD systems are not designed to meet the different ingestion and storage duration requirements of multiple time-shifted TV programming policies. Nor are they well equipped to handle today’s dynamic load balancing requirements where the old 80/20 rule assuming only 20 percent of on demand content is being consumed by 80 percent of users at any given time is giving way to much more diverse usage patterns. Operators are discovering that with thousands of options to choose from, 80 percent of viewers over a 24-hour timeframe may be tapping into as much as half of the stored content.
Traditional IP streaming CDNs are not adequate to the expanding needs of managed NSP networks either – not for the multiscreen service side of the equation and certainly not for any efforts to converge the legacy VOD and IP unicast streaming domains. There are several key factors contributing to the limitations of CDNs employing general purpose PC servers and traditional file management techniques, all of which are related to the simple fact that they haven’t been optimized to meet NSP managed network requirements.
- By employing stream-from-disk or -DRAM designs that take a hierarchical approach to internal caching, COTS systems accommodate a wide range of activities but prevent processing efficiencies relating to block size, write capacity and other factors that can be achieved on a platform optimized for video.
- Disc-based general-purpose file systems using random block allocation are not well suited for video streaming because they require constant seeking for the next block of information rather than the smooth organized sequence of information that is required to efficiently support a streaming environment.
- General-purpose systems are designed to operate in large clusters to accommodate the fluctuating capacity requirements of the non-deterministic Web application environment, in contrast to the distributed video caching environment where one or a few servers must sustain wire-speed transmission performance on a high volume of streamed content.
- These design inefficiencies lead to high levels of power consumption, shorter equipment lifespans and poor utilization of space.
- Perhaps most important, all these limitations make it impossible to create a modularized system-wide management system that can be orchestrated to serve the functionality requirements of any given NSP’s converged service distribution architecture.
A Holistic Solution for Live IP Streaming and On-Demand Services
To overcome these problems Edgeware has designed the Distributed Video Delivery Network (D-VDN) framework as a multi-purpose hybrid architecture that provides all categories of NSPs the flexibility to go in whatever directions they choose as they evolve beyond legacy VOD to multiscreen IP services.
Under control of a sophisticated system-wide management system, Edgeware’s purpose-built servers and supporting software systems can be positioned to operate as the core origin streaming servers and in distributed cache locations anywhere in the network with protocol support for any transmission mode, including all variants of HTTP Adaptive Streaming. The D-VDN asset caching and propagation system dynamically orchestrates use of all server locations to continually maximize efficient use of network transport and server resources while ensuring the most popular assets at any given time are distributed to servers positioned in closest proximity to subscribers.
The key to this flexibility is the fact that the Distributed Video Delivery Network (D-VDN) framework is built on a new breed of servers created specifically for running a video distribution business in whatever combinations of managed and unmanaged environments operators require with all the functionalities and protections essential to a multiscreen premium service. The latest iteration of this platform, the Orbit 3020, allows operators to deliver IPTV or cable VOD together with HTTP Adaptive Streaming-based services using tools that facilitate session and bandwidth management as well as monetization through advertising and wholesale service offerings, irrespective of topology and core network bandwidth.
The Orbit 3020 was built from the ground up to optimize video ingest, storage and transmission. Operating in a small one-unit half-rack form factor, the platform supports up to 24 terabytes of low-power Flash storage and sustained 20 gigabit-per-second transmission performance with up to 32,000 concurrent unicast video streams. Fully configured the Orbit 3020 consumes just 85 Watts of power.
The Orbit design takes solid state to a new level by avoiding the need for extraneous components for SSD (solid-state disk). Processing-intensive functions like streaming and shaping the video streams are implemented directly into hardware while an embedded Linux platform hosts higher function control-plane tasks such as RTSP server, firewall, configuration interfaces and other commonly needed facilities.
The net effect of this approach is to dramatically reduce the server dimensions and costs for a given streaming capacity. Moreover, the combination of small form factor, low power consumption and overall reliability together with the high-density hardware-implemented data plane allows operators to distribute edge caching points with support for advanced functionalities across the entire network.
To ensure the most cost effective approach to using this capacity for NSPs of all sizes Edgeware has established a pay-as-you-grow licensing system. Each server can be successively upgraded with streaming bandwidth licenses starting at the 2 gbps streaming/246 gigabyte storage tier and extending all the way to the full 20 gbps/24 terabyte level. By adding distributed appliances at capacity levels suited to immediate needs, operators can continuously scale their networks to support ever greater volumes of unicast traffic without upgrading network bandwidth.
The Multi-Functionality File System Architecture
Edgeware has leveraged this hardware foundation to create a random block access file system that can support a virtually endless array of applications modules as service requirements evolve. For example, the system supports all the links and data required for trick play functions such as pause, rewind, skip, etc., allowing the data to be read and transmitted by low level hardware with no processor involvement.
Extremely fast channel change is another function built into the system, thereby overcoming a troublesome disparity between IP unicast and traditional TV service. And with the built-in capability to record live TV channels, the system allows operators to implement a wide range of time-shifted services from “Start Over” to network PVR.
At the same time, the Edgeware file systems’ support for full random access to the blocks in memory is crucial to enabling introduction of new features without the need to continuously rewrite files to avoid fragmentation issues. Operators can build and add systems to run simultaneously without having to go through defragmentation, garbage collection and other steps every time new functionalities are added.
From the core streaming perspective, this architecture allows operators to implement the transcoding, adaptive streaming fragmentation and end-to-end content protection mechanisms that are essential to enabling a premium multiscreen service that meets the rigorous pay TV standards set by content providers. Working with best-of-breed partners, Edgeware’s Live Streaming Encoder provides the means by which each AR fragment is encoded into the appropriate bit rate, assigned an encryption key and encrypted on the fly across all streams.
This commitment to integration and interoperability with leading technology providers extends to other key components of the ecosystem, including client devices, Web portals, content management systems and much else, ensuring that operators can maintain state-of-the-art performance with feature-rich functionalities as service needs evolve. Consequently, the caching components of the D-VDN can be utilized in coordination with core servers to continually maximize efficiencies as new features are introduced. For example, as operators contemplate the efficiencies to be gained by introducing managed multicasting capabilities, which normally would limit the ability to serve all classes of devices, they will be able to overcome those limitations by implementing multicast-to-unicast conversion at the edge on the D-VDN.
Abstracting Functionality Implementation in the Architectural Hierarchy
To maximize operators’ flexibility to develop services and monetization strategies Edgeware has abstracted implementation of software functionalities as an architectural tier that can be managed independently. Known as Convoy VDN, this tier makes it easier for NSPs to scale in accord with their specific service strategies, including engaging all the functionalities required for a particular retail video service configuration as well as creating an environment for offering the VDN capabilities on a wholesale basis to third parties.
The multiple software modules embodied in the Convoy suite come with APIs that allow operators to integrate the VDN with third-party content management and business intelligence systems and to add new account functionalities to those systems such as are needed for time-shifted TV and nPVR services. Anchoring this flexibility is a system of stateless request routers which take requests from all devices and direct them to specific assets within the operator’s ecosystem, whether they are assets directly controlled by the operator or those of third parties such as the operator’s wholesale customers.
Where wholesale operations are concerned, Convoy allows operators to provide third parties such as public CDN operators to benefit from the high performance levels offered through the NSP’s local managed network. Convoy can support up to eight request servers in a given network segment across multiple servers to extend these capabilities to multiple third-party CDNs.
End-to-End Quality Assurance
So far, one of the key stumbling blocks in NSPs’ pursuit of premium multiscreen service opportunities has been the absence of comprehensive, cost-effective means of maintaining a quality of user experience that measures up to content providers’ and advertisers’ requirements for TV-caliber services. Edgeware has eliminated this barrier by equipping the D-VDN platform with an innovative means of monitoring and analyzing QoE end to end, from the performance of origin servers to how each stream performs on each user’s device.
At the core Edgeware’s Origin Management system provides a centralized tool for monitoring and configuring the distributed server system in conjunction with a Web-based user interface that provides status reports and statistics for ongoing operations and serves as a central portal for accessing the configuration tools of each server. Using a Web browser, operators can access these tools from any computer to look at information from individual servers or aggregated data from a multi-server system encompassing both live status and historical views.
To tie this comprehensive monitoring and analysis system into direct observation of how streams are playing out on user devices Edgeware has developed Active Video Awareness, a protocol that allows users’ devices to generate information back to the OSS for compilation into useful views of what’s happening across the access end points. To make this happen the system turns the incessant flow of brief adaptive rate streaming segments into virtual video sessions of longer duration that can be read holistically for service assurance purposes.
Analytics can be applied to these virtual video sessions to aggregate and measure them many ways, depending on what operators and their wholesale customers want to keep track of. For example, parameters of interest could be average bit rate, degree of user engagement or instances where sub-par bitrates persist beyond an acceptable timeframe. Actual delivered quality over some subset of each session can be compiled into different types of reports such as “all sessions to a certain device type,” “all sessions for some specific content,” or “all sessions over a certain network segment.”
This process short-circuits what would otherwise be a time-consuming crunching of raw data from thousands of devices that might take hours to derive an accurate view of what’s going on. In essence, it makes it possible for operators to deliver TV services across all devices with the same level of insight into what’s happening as they are accustomed to in the legacy pay TV environment.
The D-VDN Framework in Action: Reports from the Field
Edgeware customers in North America, The Netherlands, Austria, Denmark, Slovenia, Russia, Brazil and other countries are deploying the D-VDN platform to provide carrier-class performance assurance and cost-effective traffic management for a wide raange of multiscreen service models. The variety of D-VDN users attests to the viability of the platform for all types of NSPs, regardless of market size or types of networks.
For example, at the Tier 1 level, The Netherlands incumbent telecom KPN began using the Edgeware system to replace its legacy VOD system as part of a video system revamp led by Nokia Siemens Networks. More recently KPN has rolled out nPVR service on a large scale, offering subscribers the ability to record up to 200 hours of programs in the network.
In North America, Smithville Communications, a family-owned quadruple-play provider in southern Indiana, offers an example of how smaller independent NSPs can exploit D-VDN to great advantage against much larger competitors. In this instance the priority was to find a way to efficiently distribute on-demand and restart TV services to nine counties employing Smithville’s fiber backbone to feed its access networks.
Smithville chose the Edgeware D-VDN as part of an integrated solution with middleware and back-office systems supplied by Minerva, another of the many ecosystem suppliers partnering with Edgeware to extend the service options for NSPs. Smithville officials said they chose the integrated solution because it stood out against competitive offerings in terms of simplicity and time to implement.
The service went live in June 2011 and was completely implemented by October the same year. Terming technical execution “extraordinarily quick and easy,” Smithville CTO Dave Brodin said, “We had TV flowing within a few days, and we were able to offer Restart TV from the same platform, which no one else in our area can offer.”
Flexibility to add new services and subscribers was another major factor in the vendor selection process. By tapping Edgeware’s usage licensing model Smithville can scale to higher volumes of narrowcast service streams as content options increase and the subscriber base expands, resulting in significant OPEX savings and accelerated ROI on increasing revenues.
The ability to offer VOD and Re-Start TV from a single platform is a unique competitive advantage that puts Smithville ahead of some of the country’s largest operators. “For many of our customers, Re-Start TV is like DVR: once you have it, you realize you can´t be without it,” Brodin said.
Now Smithville is planning to expand current capabilities to include local channels, caller ID on the TV, access to HBO GO, remote DVR scheduling and other enhancements for its customers. Longer term, the company is well position to deliver whatever multiscreen services serve consumers’ need to access ever more content from connected devices.
While no one knows how the disruptive force of IP-enabled content will impact service models in the future, NSPs have a clear idea of what it takes today to remain competitive. Increasing volumes of traditional VOD content, the need to support network access to time-shifted content and opportunities surrounding streamed distribution to connected devices are immediate imperatives that call for a highly scalable, video-optimized distribution architecture.
The fact that the most cost-effective way to achieve these goals is through deployment of a VDN framework that can open a flexible path to future services and new business models puts NSPs in a strong position to sustain and build engagements with consumers, programmers and advertisers. No matter what size or type of NSP is addressing these near- and long-term expansion requirements, the Edgeware D-VDN platform offers a network-based solution to evolving and scaling services at unparalleled savings in capital and operations costs.