January 25, 2017
By George Bokuchava CEO, Tulix Systems
Spotlights

Tulix: 2017 Online Video Industry Predictions

There have been a number of exciting advancements in the streaming industry over the past year, but the most impactful developments for 2017, in my opinion, are the following:

• Subscription monetization of online video platforms has firmly cemented itself as viable, thanks to consumer familiarization with the model and the ability of content providers to provide multi-screen services that provide both the content and the convenience that consumers demand.

• Ad-insertion is less costly—thanks to technology that allows for compatibility across all platforms without individual player-specific development—and more lucrative because of advancements that allow for interactive and dynamic ads that target users based on viewing behaviors.

• The creation of professional linear channels is now easier than ever, making it possible for just about anyone to create and distribute broadcast-quality programming to global audiences.

Thanks to the reduced costs of distribution and growing viability of monetization models for streaming media, content providers of all types and sizes are now able to tap an enormous and growing market.

At Tulix, our goal has always been to make streaming accessible to everyone, both content providers and consumers. We started by building a best-in-class CDN, designed from the ground up for live streaming, and have expanded to create a 360-degree solution for streamed content monetization across all devices.

Over recent years, we worked with customers to perfect a model of subscription monetization. Now, we are working on an online brokerage ecosystem for generating ad-revenue that promises to be both a stand-alone and complementary means of monetizing content. We think effective monetization of content is a cornerstone to the success of our customers, which is why we are excited about our advances in this regard, as well as the many other technological developments that we have in store for 2017.

See below the video for a full transcript of our interview with George Bokuchava. See the rest of the 2017 Streaming Media Executive Predictions in the related articles below, or download the entire batch here.

Eric Schumacher-Rasmussen: Hi, I'm talking today with George Bokuchava, who is the CEO of Tulix and we're going to talk a little bit about the Executive Predictions article that George wrote for the January-February issue of Streaming Media. Welcome, George. Maybe you could start out by telling our viewers a little bit about Tulix, in case they're not familiar with the company.

George Bokuchava: Tulix is a leading company in the area of providing streaming services over the internet, monetization services, and also custom IP-based projects for broadcasters and content owners.

Eric Schumacher-Rasmussen: In your Executive Predictions article, you talk a lot about monetization. You start by talking about subscription based video and how that's really become a viable form of monetization. How have CDNs like Tulix helped subscription based services become viable and be the leading method of monetization for OTT video?

George Bokuchava: Actually, Tulix provides several types of monetization including pay-per-view and advertisement-based monetization, as well as subscription based. Up until now, all of the changes were dynamic and so there were a lot of changes that we saw. Up until now, actually, pay-per-view and advertisement over the internet, we didn't find very successful. While we're very focused on subscription-based and while we are leaders in this particular area of providing subscription-based services to content owners and broadcasters.

Eric Schumacher-Rasmussen: You also talk about the fact that ad insertion is becoming easier and more effective, therefore ad based video services are going to see increased growth as well. What changes are happening on the ad insertion front that give viewers a better experience and give publishers better monetization?

George Bokuchava: Actually with ad-based monetization, this is what was our focus recently. We'll continue to invest more and more of our resources in this particular business area. What's happening is very interesting. We have numerous conversations with the broadcaster about ad insertion. Right now, we're working on a full ecosystem, a closed cycle ad-based system which will allow for users to upload their advertisement to choose ad spots, while Tulix will manage the whole system, as well as distribution of the the content of all the channels. This system will allow for everyone to participate and be successful parties, including advertisers as well as broadcasters.

This system will be all completely cloud-based. At this point this is what we're thinking will make a huge difference. We're working with couple broadcasters to find the features, just to make sure we're not missing any of those. The good part is that Tulix is capable of building the whole system from the ground up based on the Tulix CDN, based on Tulix infrastructure, on our own resources.

If I may, I'd like to continue a little bit about another big difference between our systems and classical systems. We will be able to get a granularity that will be able to display ads based on user profiles. This is an unheard-of feature for a classical, old-fashioned broadcaster. We heard, even from some of those, "You know what? We may not need such a granular type of advertisement." But you know what? In a world of social networking, and that area of websites and applications, you do have such type of granularity. I think this will be very beneficial because obviously for advertisers, or publishers actually, to get the biggest return on their money will be when you have a very granular advertisement which will be based on user profiles.

People will be actually interested in watching those advertisement clips versus just skipping them because it's nothing to do with their interests.

Eric Schumacher-Rasmussen: Right. It sounds like then, because Tulix is building the entire ecosystem that gives publishers and advertisers a one-stop shop so to speak. One place to go. You know, everything is going to be integrated. There's no third-party integration to worry about. It sounds like it's going to be a really seamless sort of process for everyone involved.

George Bokuchava: Absolutely. We are not eliminating any third parties. Since it will be under our control, it will be easily able to do that too.

Eric Schumacher-Rasmussen: Makes sense. You also write that you're seeing a growth in linear OTT channels. How has it become easier to create linear OTT channels to replicate the classic broadcast experience in a way that hasn't been able to be done before?

George Bokuchava: This is a huge topic actually. We can talk probably about that more later on. Right now what I'd like to share what we saw during this last year, actually, and it's dynamically getting bigger and bigger. I wouldn't say it's a problem. I think it's actually a very good thing specifically that IP-based systems, what we're finding ou—and not only us, but broadcasters—are finding out are they're much more cost efficient than compared to the classical broadcasting systems and when we talk about cost-efficient, we're not talking about 20%. We're not even talking about 50% cost savings. We're talking sometimes 1-to-10 ratio which is a huge cost savings, and the interesting part of what we see is the minute broadcasters are getting such processes, such pricing, hey don't want to go back and they're asking for everything. To be IP based, they are asking to have huge cost savings, obviously, that they think that they can get. Plus they're getting many more features. You're getting simultaneously a much more cost-effective system with many more features, which is exactly what broadcasters are interested in.

It will be in quarters, it will be play-out systems, it will be anything. The minute you switch to IP based, and with new technologies, which Tulix is specifically interested in, new technologies to differentiate from any other company—that's huge. Actually, the granularity of the advertisements, this is one of the examples of that. The other examples actually play out. Now, before, to get a play out system for a new startup or just to add more channels to multi-medium sized broadcaster, it was a huge task. Right now, Tulix has its own offering in the area of play out, as well as several third-party agreements. All of them are cloud-based but cloud-based means they will be running off of Tulix premises which are much more efficient. We're talking about 1-to-20 ratio price-wise. The broadcaster wants to come up with a linear channels 24/7, and before it was a task which was hugely difficult if I can say so. Once they find find out about us, it's a piece of cake. They can get something up and running in three days without any equipment, without anything as long as they have content.

We actually just added a new feature to our play out system that will accept almost any format, which makes life even easier for all broadcasters.

Eric Schumacher-Rasmussen: That certainly shows how broadcasters can replicate that broadcast experience in an entirely IP based ecosystem. Let's close by talking a little bit about what Tulix has planned for 2017 in terms of the kind of customers you're working with, in terms of the direction you're going.

George Bokuchava: As you can see, what we're talking about is coming up with a number of solutions and those solutions are actually dictated. We have two, not directions, but two types of activities. One, we're coming up with our own product based on our own experience and the other one is that our customers actually dictating to us what they would like to see. One of the products, which we haven't talked about, is a distribution to the affiliates that is much more cost effective. What we're talking about is a distribution of the content to all affiliates around the U.S. or even internationally, which we can do now over IP and the cost is, I would say, I don't call it even a fraction, say that we talked about 1/20th of the cost. When we can deliver content to Caribbean affiliates, we can deliver to Hawaiian affiliates, we can deliver to anyone in the world and actually that pricing is also going down.

It's not only going down, but we're also coming up with solutions which will allow us to provide a solution at the point that it's getting so easy and it's getting so cost-effective that there's almost no competition for us, and simultaneously it makes our customers absolutely happy. The biggest thing here that many broadcasters are finding out is that there is an alternative to what we are doing. Now, there is no way back. They're jumping to that solution and they don't want to hear about anything else—why would they if it costs 10 to 20 times more?

Eric Schumacher-Rasmussen: Right, right. Exciting stuff that you're up to and of course if our viewers want to know more, they can go to www.tulix.com and thanks so much for your time and have a terrific rest of 2017.

George Bokuchava: Thank you, thank you so much.

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