A roadmap for OTT convergence

Thursday, March 21, 2013

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Generic PC-based servers are able to function in a best-effort environment; however they will limit growth opportunities when adding premium services that require QoE guarantees. It is recommended purpose-built servers are used that are optimised for the added applications and can simultaneously guarantee performance, and above all, allow freedom of placement throughout the network.

As traffic volume across networks continues to skyrocket, network operators are faced with the challenge of trying to increase revenue from this traffic, while providing compelling services to attract new customers. Joachim Roos, CEO of Edgeware examines how delivering Over-The-Top (OTT) services is forcing operators to consider new technical solutions such as operator-run Content Delivery Networks.

Over-The-Top services have exploded in popularity over the past couple of years. However, not only does OTT video require a lot more bandwidth, it also increases peering/transit costs for the operator. That being said, how can an operator rise to the challenges that OTT causes while maximising the company’s return on investment (ROI)?

One potential answer is by offering competitive in-house services and selling content delivery network (CDN) services to OTT content providers and service providers. Conversely, once an operator adds OTT services to its offering, complexity to the system increases. This means the video delivery network in place not only needs to be able to scale, but it needs to have the ability to incorporate new services on an as-needed basis.

A Quick How-To…

Once a decision has been made to build a video delivery network, a number of questions and uncertainties remain. The best approach towards building a video delivery network would be to start small and have the ability to scale. Operators need to be able to scale capacity, scale the number of services offered, the types of devices reached, the business models and so forth. The key decision is to select a system solution that offers this kind of scalability.

The premium services that are already being delivered to users’ living rooms are fairly mature, both from a business model and technical perspective. However, delivery of premium video services to other devices, including smart phones, tablets, computers and gaming consoles is still in its infancy. Video services delivered to these devices have, to date, mostly been free services, delivered as best-effort services over the internet.

When operators provide premium services to additional devices other than the TV, more often than not, an IPTV model will be used as a starting point. Then, existing business models can more or less be reused. This is, however, a non-trivial exercise, since the delivery method used to reach these devices (HTTP) lacks several key features, including Quality of Experience (QoE) guarantees. In order for additional services and devices to be offered to customers for additional money, QoE must be guaranteed.

Also, Pay-TV services are built around the concept of delivering a programme or a video asset, usually tied to a session. This allows for both subscription and pay-per-view payment models aimed at end users. Operators can measure usage per content that can be used as a baseline for content purchase. Content is also “pushed” over a managed network that is provisioned to provide well-defined QoE and delivery costs.Alternatively, traditional best-effort delivery over the internet uses a pull-based model that offers no QoE guarantees. Since QoE cannot be guaranteed, advertising revenues replace end user revenues. In addition, best-effort content is delivered over a CDN, which has no video awareness. CDNs are not able to understand what a video asset is and have no concept of a session. Lastly, costs are purely driven by the number of bytes delivered, instead of the quality. These underlying differences need to be mapped into a more pay-TV friendly solution that both the operators and content owners feel comfortable with, for example, operator CDNs.

Maximising ROI

Offering competitive services has been one of the first choices of operators, and currently many telco and cable operators have at least one premium TV service to offer to their subscribers.

Many operators have taken the competitive advantage of using their traditional broadcast pay-TV services, such as terrestrial and satellite TV, and then delivering video over an IP network. This enables them to provide advanced services, such as catch-up TV and video on demand, and to reach other devices other than just the living room TV. More recently, OTT video services have forced operators to compete by offering advanced, higher quality content through direct connectivity to end users.

Competing with traditional TV services may be an ongoing battle for the operator, however; it will be impossible for them to compete and overcome all new video services appearing on the internet. Users will be attracted to the best features or content they can find online. Instead of trying to beat them, operators can join them by monetising these services instead. This is the main concept behind operator CDNs.

Once an operator has a video delivery system that can support its own services, the spare capacity can be sold to outside content and/or service providers. The main reason content and/or service providers would explore this opportunity is due to its ability to utilise a higher quality path to reach their own customer base. With pure-play CDNs, services are delivered by using an overlay delivery infrastructure that runs along the top of carrier networks. As most TV content that is viewed is regional or national to the viewer, a relationship between content providers and CDNs is of more importance. Capacity from an operator CDN can then be sold to the pure-play CDNs to allow them to guarantee a higher QoE when delivering to their customer base.

Converge!

First, what is convergence? Convergence is having a video delivery system that can seamlessly deliver different services to different devices using a single management model. By doing this operators have the flexibility to reallocate delivery capacity when popularity for a service changes, to deliver services to new devices when preferences change, to adapt to new business models, and to generate revenue from both in-house and external service providers (through CDN capabilities) with minimum to no changes to the management system or current infrastructure.

As there are several layers within a video delivery system, convergence can happen at any of the layers: service and management, delivery infrastructure and delivery servers. Each of the different layers has its own unique functions that can be introduced at the same time or each individually. With the services and management layer, convergence makes handling more simplified, meaning that the system can be operated by the current/same staff, even when additional and advanced services are being offered. Even if the services provided are being offered to different devices, the same content usage data is provided. This greatly simplifies the business operations of the system.

Next is the delivery infrastructure layer. At this layer, convergence allows operators to use the same equipment to deliver all services, to any device while the capacity can be allocated to different services depending on customer demand. This results in greater equipment utilisation, which leads to reduced CAPEX. When operators utilise hierarchical streaming servers at the delivery infrastructure layer, scalability is easily addressed and QoE can be maintained without overloading the upstream network. However, when pushing streaming capacity further into the network, convergence becomes critical in order to maintain high utilisation of each node. This is due to the capacity needed per service being diluted the further out in the network it goes.

At the lowest level are delivery servers. In order to provide the flexibility needed at the service and management level, the delivery servers have to be reliable building blocks that include performance guarantees. Alternatively, generic PC-based servers are able to function in a best-effort environment; however they will limit growth opportunities when adding premium services that require QoE guarantees. It is recommended purpose-built servers are used that are optimised for the added applications and can simultaneously guarantee performance, and above all, allow freedom of placement throughout the network.

Conclusion

In order to add increasingly popular OTT services that are essential for being successful in today’s highly competitive video market, operators need a flexible, scalable and ultimately, a converged network infrastructure solution. Convergence allows operators to scale on an as-needed basis. It enables them to attract new subscribers while retaining current ones and lastly, it allows them to generate new revenues through offering higher-valued CDN services to OTT content/service providers.

It’s a win-win scenario in which operators ultimately maximise their ROI and viewers consume premium content on any screen of their choice.


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