How an Evolving Pay TV Infrastructure Can Coexist With OTT
It’s common knowledge that growth in subscriptions to online video services is continuing at a breakneck pace, while traditional pay TV is experiencing a decline. Consequently, pay TV providers are scrambling to offer a mix of programming and service models that will appeal not only to longstanding customers, but to newer generations and their anything-but-traditional viewing habits.
Short-term tactics, such as becoming vMVPDs, or the recent trend of merging online content into existing channel lineups, may help delay the subscriber exodus but are only a partial solution. Long-term success will likely require more fundamental change. But there is good news.
First is that, in spite of declines in the U.S. and some other parts of the world, pay TV use is still growing on a global basis and is forecasted to do so for the next few years. Second, a large percentage of viewers—over 80%—still consume live sports through cable subscriptions or other more traditional TV services. Third, pay TV operators still hold some impressive cards. Consider the following:
- A simplified viewer experience could ultimately attract and/or retain subscribers. Largely due to program distribution and licensing, many viewers subscribe to multiple services to cover everything on their watch lists. But while this creates more flexibility and choice, it also translates to a confusing and incompatible mix of user interfaces, streaming equipment and remotes, mobile apps, and user credentials, plus having to interact with multiple providers for billing, customer service, and technical support. If pay TV providers can simplify the overall customer experience and still satisfy viewers’ content preferences, then those services could regain some luster.
- Owning infrastructure is a competitive advantage. Pay TV providers that own and operate networks and facilities gain not only more control over QoE for their own services, but a unique ability to control costs through network consolidation, virtualized infrastructure, or other measures that might level the playing field vs. the OTTs. Indeed, many network operators have already kicked off service and network transformation initiatives designed to reduce the COGS associated with pay TV services, and those cost savings could be reflected in more competitive pricing, not to mention healthier operating margins.
- Evolving technology and business partnerships enable service integration. In part because they own the infrastructure, including set-top boxes, home gateways, and, most importantly, the access networks, pay TV operators are capable of integrating content from popular OTT providers like Netflix and Amazon with content they already license directly. The coexistence of OTT and on-net originated content within channel lineups is already fueling new promotions and service bundles. And while the technology, partnerships, and industry consolidation that are making this possible are still evolving, this trend could lead to better times for pay TV.
These points all serve to underscore the importance of infrastructure, and its impact on service and business models. For pay TV to succeed going forward, that infrastructure will have to evolve to become higher performing, more capable, and less expensive, which is where technology known as multicast-assisted adaptive bitrate (M-ABR) streaming enters into the equation.
M-ABR is exactly as the name implies. Used primarily for live programming (although there are other use cases), M-ABR employs IP multicasting to better manage the volume of stream traffic generated over the network when many viewers simultaneously watch the same program. IP multicast is not new technology by any means. In fact, multicasting has been used to deliver IPTV services for many years. What distinguishes M-ABR is that it uses adaptive bitrate (ABR) codecs rather than the static bitrate codecs used by IPTV. While static codecs are fine for networks dedicated to one service, they’re unsuitable for delivering live television over networks shared by multiple services. ABR codecs are a proven commodity in that regard. The combination of multicast efficiency and ABR flexibility and quality creates a best-of-both-worlds scenario in that it enables high-quality live and live linear content to share the broadband connection with other content and services.
The positive cost impacts of multicasting are felt most on the operator’s last-mile network, particularly during high audience events such as sports playoffs or championships, where it’s not unusual for more than 80% of households in a given service area to be watching the same program on the same channel. Because multicasting generates only one stream per edge router, rather than the many streams generated by unicast delivery, multicast streaming places far less burden on edge aggregation and access networks during those events, helping operators avoid overspending on extra router capacity that might be needed only occasionally.
It’s also worth noting that M-ABR complements unicast streaming, which is already used widely today. While M-ABR is optimal for high-audience live-streamed events, unicast, which also uses ABR codecs, is totally sufficient for delivering most other types of IP-streamed content, including time-shifted, VOD, and most live or live linear programming. Designating certain content or channels as M-ABR-enabled, while defaulting other content to unicast, is an optimal delivery model in that it creates a single video workflow in which the provider can programmatically control how, when, and where certain types of content are delivered, all over the same network, of course.
While M-ABR does require an underlying multicast-configured network, M-ABR solutions that convert unicast streams to multicast can be positioned so that the requirement only exists for the last mile network. This is in contrast to other forms of multicast streaming that require the end-to-end network to be multicast-enabled or augmented with solutions that tunnel multicast traffic over non-multicast networks.
In addition to network efficiency and high quality, M-ABR also opens the door for operators to more seamlessly integrate OTT VOD and other content with their more traditional multi-channel lineups and VOD libraries. Today that integration is most often accomplished through a hybrid approach in which the OTT content is delivered to the set-top via the broadband Internet connection, while traditional pay TV programming arrives via the digital network (cable, satellite, IPTV) to which the set-top boxes in the home are connected. Although the viewer’s experience is improved through the improved mix of content, and service quality is maintained, this hybrid model still requires maintaining two distinct networks and content management workflows, an approach that is fundamentally inefficient and thereby costlier.
The preferred approach, one that offers the same quality of experience and content mix, but also achieves the desired cost savings, would be to migrate traditional delivery models (cable, IPTV, etc.) to HTTP delivery (M-ABR and unicast streaming), making the broadband internet connection the single delivery mechanism for multichannel TV, as well as OTT streaming and other types of content, again with a single workflow. To summarize, M-ABR streaming makes possible:
- The integration of traditional multichannel and OTT content for a simplified high-quality viewer experience
- More attractive pricing, in part through cost savings achieved through network consolidation and improved efficiency
- Additional service enhancements and content moving forward, again through a common delivery infrastructure
M-ABR streaming is by no means the silver bullet for efficient broadcast-scale HTTP ABR video delivery. Constraining factors for both workflow and network efficiency gains may include:
- When the provider is in the investment cycle for its cable and/or IPTV solution
- Existing multicast capabilities and capacity constraints—or lack thereof—in different parts of their network infrastructure
- Regulatory constraints
But for operators in markets where traditional TV services continue to hold appeal, using technology such as M-ABR to evolve infrastructure and services in a way that will keep them not only competitive and profitable, but more adaptable to the constantly shifting video services landscape, seems to make an awful lot of sense.
[This is a vendor-contributed article from Akamai. Streaming Media accepts articles from vendors based solely on their value to our readers.]
Related Articles
Declining subscriber numbers don't bother today's pay TV executives, who are "cautiously optimistic" their companies can adapt to changing viewer preferences.
06 Aug 2019
A report created by Digital TV Research finds that, for 505 operators in 135 countries, three-quarters will increase their subscribers between 2018 and 2024.
20 Jun 2019
Subscription services are the biggest piece of the pie, and have been since 2014. Between 2018 and 2024 SVOD revenues will climb by $51 billion.
10 Jun 2019
The number of pay TV subscribers will grow by 380 million from 2010 to 2024, but total global revenues will fall by 14% to $177 billion during the same period.
06 Jun 2019
A report from Vindicia and nScreenMedia shows people like having multiple streaming services and prefer low-cost options. Also, Amazon Channels has a strong following.
19 Mar 2019
Where do the video-on-demand, live linear, and live event markets stand now? And what's coming next, as streaming media delivery enters its third decade?
19 Mar 2019
The theme of this year's Streaming Forum was "OTT: Better Than Broadcast?" But before they could debate that topic attendees needed to decide what OTT means.
07 Mar 2019
In a major milestone, adoption of the leading SVOD service now beats pay TV. Viewers have more choices than ever, and they're happy about that.
01 Feb 2019
Consumers are comparing high-priced pay TV services with lower-priced streaming plans, and for many streaming wins out.
25 Oct 2018
While OTT competition has slowly eroded pay TV numbers in the U.S. for years, the global pay TV audience is growing, finds ABI Research.
05 Jun 2018