Why Streamers Need Rural Sports Fans — and Why Quality is Key for Keeping Them Around
“Churn is just the killer in this business, and so we have been hyper-focused on it,” Warner Bros. Discovery CEO David Zaslav told analysts in May 2024. He was referring to how viewers sign up for a streaming plan, binge watch for the next 30 days and then cancel. Hence the new trend of bundles that aim to minimize churn.
But streaming’s contract-free business model isn’t the only reason why people churn. If they live in rural areas, streaming can be an unwatchable buffering, tiling, freezing mess. That kind of experience is a big problem for streamers whose main offering is on-demand content such as movies and TV series, but it’s an even bigger problem for services built around live sports. Nobody wants to spend $15 a month or $99 a year to watch out-of-market games and see a spinning wheel instead.
It’s tempting to assume that the root cause is slow internet access, but that’s not necessarily the case. Poor quality of experience (QoE) still afflicts rural viewers who have high-quality, high-bandwidth connectivity such as fiber, a segment that’s grown from 21% in June 2021 to 31% in June 2023, according to the Fiber Broadband Association. And it will only get bigger over the next few years.
“As urban geographies have filled out with fiber, areas with less competition are becoming more attractive,” the association says. “The COVID-19 pandemic also drew national attention to gaps in broadband access and added renewed focus — and funding — to bringing fiber broadband to rural communities.”
The rapid buildout means an increasingly large addressable market for streamers as rural consumers seek alternatives to broadcast and satellite — especially as the NFL and NBA shift more and more of their games exclusively to streaming. Twenty percent of the U.S. population lives in rural areas, according to the Census Bureau. That’s a lot of potential subscribers. But if they don’t have consistently great QoE, they’ll only increase churn, which is a metric that advertisers, analysts and investors watch like a hawk.
Traditional CDNs and the Blind Spot Downstream
If slow internet connections aren’t the main reason for poor QoE, then next place to look is content delivery networks (CDNs), which use direct connections and telco peering to reach ISPs. CDNs carefully manage their caches to keep up with demand even when it spikes, such as the 2024 NFL AFC wildcard game on Peacock, which Comcast says drove a record 30% of internet traffic.
But CDNs have a few limitations that directly affect rural QoE. First, they rely on performance metrics from streaming subscribers located closest to their caches, which are deployed in and around cities because that’s where the telco and cloud points of presence typically are. As a result, the dashboards at large, dense CDNs won’t show metrics from smaller ISPs, whose customer bases are too small to impact QoE for subscribers of large ISPs in urban areas.
CDNs also don’t have visibility into each ISP network or into the path between their network and each ISP. These CDN limitations directly affect providers of streaming content such as live sports. The closely watched churn metric highlights why streamers can’t afford to alienate up to 20% of the population. Rural viewers are crucial for recouping the tens of billions that streamers are paying for sports rights such as the NBA.
Rural viewers are equally important for streamers that specialize in relatively niche sports, such as college, junior and professional minor hockey. Their fan bases are small but highly devoted to the point that they’re willing to pay as much or more than major sports streaming services cost: $30 a month and $150 a year. For that kind of money, they deserve more than the runaround of a spinning circle.
The Era of Last-mile CDNs
To overcome these challenges, streaming services need to add a new type of CDN, one that’s designed to meet the rural market’s unique requirements. This “last-mile CDN” combines cloud-based content- and network-management functions with appliances that can be deployed in the serving ISP’s network. Network awareness, content awareness and consumer behavior analytics provide last-mile CDNs with the insights necessary to ensure that both streaming providers and rural ISPs can verify QoE.
Last-mile CDNs use request collapsing and highly efficient cache-fill to minimize the amount of requests for streams flowing upstream from the outskirt ISP toward the streaming provider.
Fewer concurrent upstream connections ensures that viewers always get the highest quality streams.
Click here for a full-size image
Last-mile CDNs implement caching and delivery within outskirt ISPs while verifying access to streaming subscribers and validating network connectivity behavior. This enables them to optimize network QoE metrics such as average bitrate and buffering time.
These benefits don’t require streaming providers to shoulder major additional expenses and complexity. For example, there are a range of options and methods that allow the network to identify Netskrt as the right CDN for a given user and delegate traffic as needed. Netskrt can help content providers with operational processes of CDN, multi-CDN selection or CDN switching. This approach shows that there’s more than one way to configure a customer. Working hand-in-hand with content providers is key for making the configuration process as seamless as possible. And the bonus to this process is that it improves QoE for subscribers that might not be on the immediate radar and doesn’t cost content providers extra."
Decades ago, satellite providers began mining the lucrative underserved rural market. Today, streamers can repeat history, but only if they can provide the consistently great QoE necessary to keep rural viewers subscribing instead of churning. Last-mile CDNs are key for unlocking that opportunity.
About the Author:
Steve Miller-Jones has over 15 years’ experience in the CDN industry. Prior to joining Netskrt, he was responsible for Product Management and Product Strategy at Limelight Networks, a global CDN. Steve’s extensive experience in CDN and media distribution industries spans video workflows from field encoding to global CDN operations and solution engineering for broadcast, media and entertainment, and enterprise markets. He has overseen the successful growth of streaming media and digital content distribution product and services portfolios and has also designed new service offerings, most recently in Edge Compute and Ultra-Low Latency streaming.
[Editor's note: This is a contributed article from Netskrt. Streaming Media accepts vendor bylines based solely on their value to our readers.]
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