By: George Winslow
THE FLURRY OF NEW OVER-THE-TOP video services and their long-term impact on the traditional TV landscape has arguably been the biggest TV story of 2015. But behind this widely publicized trend lies a far less discussed tech issue — the ability of the Internet and broadband networks to handle all the traffic.
For the moment, that traffic seems manageable, in part because usage of OTT video is still relatively small. In the first quarter of 2015, Nielsen reported that adult Americans 18 and older spent about 36.1 hours a week watching TV (94.8% of their video viewing time) vs. 1.9 hours (5.2%) watching video on PCs, smartphones and tablets.
“Even though we’ve seen a huge increase in the amount of linear content people are trying to bring to the Internet, I think the numbers show that we are really in the early stage of it,” said Jon Alexander, senior director of product management at Internet service provider Level 3 Communications.
That view is confirmed by a recent report from Cisco Systems, which predicted that North American Internet video traffic will jump fourfold to 28 Exabytes per month in 2019 and that 423 billion minutes of video will pass over the Web in North America each month.
In time, this burgeoning traffic and the push to make more content available over the Internet will pose some major challenges. “The industry is on the razor’s edge of having to make some significant investment decisions,” said Dave Schaeffer, CEO of Cogent, which provides transit services for many major content delivery networks (CDNs). “The current architectures were not designed to carry these types of volumes and these increases in volumes.”
Quality is by far the highest priority for programmers, but as more content is moved to IP delivery, costs are sure to pile up.
Broadcast and cable programmers have traditionally spent heavily to build facilities. Once those investments are made, the cost of delivering programming does not significantly increase when, for example, audiences grow from 10 million to 50 million. By contrast, the unicast model of the Internet delivers each stream separately to a user, which means that cost exponentially rises as audiences grow from 5 million to 10 million and beyond.
“We have gone from a broadcast/cable model with an extraordinarily high cost of entry and an extraordinarily low unit cost after that, to Internet distribution where the cost of entry is minimal but cost per unit is more real,” said David Stubenvoll, CEO and cofounder of streaming technology provider Wowza Media Systems.
That makes it easier for TV programmers to launch new services on digital platforms, but it creates more competition from other OTT players and is putting pressure on CDNs to come up with ways to control costs while improving the quality of the stream.
“There are a number of technologies that are designed to continue to generate a higher-quality viewing experience and some that can control some of the economic pressures,” said Michael Fay, vice president of media product management and operations at Akamai, which acquired Octoshape in April to strengthen its tech portfolio.
One promising area is User Datagram Protocol (UDP), which differs from the Transmission Control Protocol (TCP) typically used on the Internet, Fay said. “With UDP we saw a 31% improvement in visual quality in tests compared to TCP,” he said. “UDP overcomes a lot of the challenges when you have latency and packet loss.”
Elsewhere, Aspera reports significant improvements with its FASP transfer technologies, which offers other significant improvements over TCP. Michelle Munson, CEO and cofounder of the company, which is now owned by IBM, said that their FASPEX product has become a popular system to replace satellite delivery of VOD assets and was a key part of the workflows for streaming content during the 2014 FIFA World Cup.
MULTICAST’S FUTURE TECH
Executives at a number of CDNs and streaming technology providers also highlighted the potential of multicast technologies.
“When you have an event like the Super Bowl, there are many streams going over the backbone with the same content,” with the current unicast model, said Fay at Akamai. “If the carrier elected to turn on their multicast capabilities … the overall cost of delivering the event would be exponentially lower.”
This is particularly appealing inside the network of one operator. “The CDN technology that we have developed will allow operators to use multicast in their network for live streams and then convert the multicast back to unicast in the home,” said Nivedita Nouvel, VP of marketing at Broadpeak. “We think that multicast is really key to helping operators make the switch from IPTV to OTT.”
Other promising technologies include peer-to-peer and prepositioning content closer to the user so that it can be more quickly accessed, Fay said.
But he and others also stressed that these deployments could take time. “Right now the CDNs are able to handle the daily load and have tools to deal with huge events like the Super Bowl,” said Sudheer Sirivara, director of Azure Media Services at Microsoft.
While Microsoft has been exploring both multicast and peer-to-peer technologies, Sirivara and others said more work has to be done before they can be widely deployed.
“There is a lot of interest about multicast, but it has been too difficult and complex to implement across different autonomous Internet networks and the larger Internet,” said Munson at Aspera. “We would welcome it, but so far we’ve seen zero progress.”
Conrad Clemson, CTO at Cisco’s Service Provider Video Software and Solutions divisions believes that will change as traffic increases. “We are pretty excited about the potential [of technologies like UDP, peer-to-peer and multicast],” he said. “The industry needs to be prepared to do large-scale IP broadcasts. But I think it is really a story for 2016, not 2015.”
Many executives also remain confident that traditional Internet technologies can handle the increased traffic. “Individual cable operators may be able to do some things with multicast and different technologies because they have more control over the end-to-end infrastructure,” said Alexander at Level 3. “But we have seen adaptive bit rate technology deliver solid user experience in the last eight years and our expectation is that for the next three to five years, they will remain the dominant approach.”
A number of other technologies, including cloud-based workflows and the creation of complete systems for launching digital streaming and over-the-top services, are also helping reduce costs and streamline the process of making more content available.
“To launch these services you need a complete end-to-end solution” for transcoding, digital rights management, ad insertion, packaging, formatting the content for a host of different screens, devices and bit rate, CDNs, and a number of other technologies, explained Sirivara. “There are a whole set of technical challenges that the content owners are typically not familiar with and able to deploy at scale.”
That makes complete solutions to handle all of those processes increasingly attractive both for programmers and operators. “The Ericsson Media Delivery Network is an all-software solution that can be completely virtualized to manage all types of content,” said Lisa Skelton, head of media delivery marketing at Ericsson.
These cloud-based services reduce the launch costs so that they can easily be spun up or down without building whole new facilities, and greatly simplify the process of delivering content to a wide variety of screen sizes, devices and networks, added James Segil, chief marketing officer at Verizon Digital Media Services.
To further improve the quality of the streaming video, Verizon has also been heavily investing in its network. “Last year, we tripled the size of the network to about 10 [Terabytes per second] and we will finish 2015 at 18 to 20 Tbps,” Segil said.
Segil added that Verizon has also been improving its ad technologies to further strengthen the economics of streaming video. “The AOL acquisition brings those technologies into the equation to help people extract ad revenue more effectively,” he said.
Many also believe that costs of delivery will continue to drop. Schaeffer at Cogent noted that, “our price-per-megabyte of Internet transmission sold to CDNs has fallen for the last 12 years at a compounded rate of 23% per year. That is roughly eight times faster than the rate of price declines that end-user customers have experienced with their ISP.”
Schaeffer credits much of that decline to the deployment of fiber connectivity. “Once you have that connectivity, you can then take advantage of the technology to drive down the cost,” he explained.
Further advances will be created by the deployment of new compression schemes like High Efficiency Video Coding (HEVC).
But this too could take time. “We are seeing a lot of experimentation in the labs but large-scale deployments are moving fairly slowly,” said Charlie Good, Wowza Media Systems CTO and cofounder. “It is really a matter of seeding the market with devices that have the capability to decode those kinds of codec.”
When that happens, cloud-based streaming technologies could quickly make the shift to HEVC, executives at Wowza Media Systems, Microsoft and VDMS explained.
In addition to HEVC, Clemson at Cisco also noted that “there are a number of new companies that are coming up with interesting technologies to optimize video without compression by modifying the bit stream to make it skinnier without impacting quality.”
Clemson also stressed that they are major supporters of open-source technologies for CDNs and that initiatives such as the Streaming Video Alliance could help standardize technologies and streamline technical infrastructures. “If you look at the collection of companies that are getting behind the Streaming Video Alliance, the potential is huge,” he said. “Some working groups are about to get running, and I think you’ll see some exciting developments in the next 12 to 18 months.”
Next-Gen Streaming Tech Takeaways
As more content is pushed onto digital platforms, a number of technologies are helping improve the quality and economics of IP delivery.
1. The cost of bandwidth continues to drop, which is allowing CDNs and IP networks to maintain or improve quality in a period of rapidly growing traffic.
2. Streamlined workflows created by cloud-based systems for ingesting and preparing content for delivery are also simplifying the cost and complexity of digital delivery.
3. CDNs are actively exploring newer technologies such as multicast, peer-to-peer and HEVC to greatly reduce bandwidth requirements, particularly during high-traffic events.
4. The flexibility of current Internet technologies, which have been effectively adapted with an eye toward future challenges, will help the industry handle much greater traffic in the next few years.
5. Even with these advances, the predicted fourfold increase in North American Internet video traffic will require massive upgrades and possibly the deployments of fiber to the home in many areas.