Skytide's 7 Online Video Trends to Watch in 2012

In a recent white paper, 7 Online Video Trends to Watch in 2012, online video management analytics company Skytide outlined the emerging trends in the online video industry and the content delivery supply chain that serves it. If the last few years were any indicator of the hockey stick affect of rapid change within the video sector, 2012 promises to be full of twists and turns and major and disruptions. While predictions are a dime a dozen, they have much more relevance when coming from an industry expert and authority on the subject. I caught up with Patrick Hurley, VP of Marketing of the Oakland, California-based Skytide, and author of the white paper, to get an insider perspective on their online traffic projections, federated CDNs and why Telco CDNs will dramatically change the content delivery market. The white paper has been very well received, as Hurley noted, since it was first posted on Slideshare late last year where it's currently accumulated over 8,000 views to date and was featured among their 12 best presentations with predictions for 2012. It is also the number one search result on Google for video trends.



1. Online video traffic will continue to soar

Skytide says the first trend to watch in 2012 is that online via traffic will continue to soar. Hurley admits that while this is no big surprise, they have data to back that up, including Cisco's Visual Networking Index (VNI) that forecasts online video will account for 90% of all consumer IP traffic by 2013 and a compound annual growth of 32% from 2010-2015. Skytide's own large Tier 1 customers are very bullish on this and have seen growth rates exceed all industry expectations. Skytide is even more bullish and believes that it's possible for the coming years that online video traffic will grow 50% or more annually.

"The implications for that are really significant, for the Telcos and Communications Service Providers (CSPs)," explains Hurley. "Because that could compound an already serious problem that they have. They're caught in a vicious cycle."

The cycle starts with the fact that their legacy businesses (landline, telephony, etc.) which used to be their cash cows are really declining quickly and they can't count on them anymore. At the same time, consumers continue to have this insatiable appetite for online video, but that demand requires that the big Telcos, ISPs and CDNs invest heavily in capital expenditures to support their infrastructure. That would be great, if they could recoup those costs, but the problem is, the only thing their getting from online video consumers is a very modest monthly fee, which is your ISP bill, so they aren't able to monetize their capital expenditures.

Hurley says that CSPs need to extricate themselves from this vicious cycle and pursue new strategies. One of the trends we saw in 2011 will continue into 2012, says Hurley, and that is that the Telcos and cable companies are going to get into the content delivery business, which is an inherent strengths they can leverage as owners of the network infrastructure with direct relationships with end users and content owners. That helps them on both sides of the ledger and create new revenue streams.

2. Telco CDNs will make big waves

Owning the network is the biggest advantage that the Telcos have because they control the Quality of Service (QoS) over the last mile, and more importantly, there's a cost savings component there as well. In particular, CDNs like Akamai and Limelight have to lease the bandwidth from the network operator, and network operators don't have that issue.

Based on those advantages, we'll be seeing more of that in the next year, which leads to Skytide's next prediction, that Telco CDNs will make big waves in 2012. Over the last several years the Telcos have waded in the CDN waters slowly, but now they're diving in head first. Some of the world’s largest telcos have now deployed their own CDNs, which is diminishing the dominance of pure-play CDNs. Companies from outside the space (Amazon, Google) are getting into the CDN business and the trend by major content providers (Yahoo, Microsoft, Google) to operate their own in-house CDNs. Dan Rayburn lists many of them on his blog here: Updated List Of Carriers, Telcos and Pure-Play Companies In The CDN Business | StreamingMediaBlog.com.

3. Federated CDNs will finally shift from  
    concept to reality

The third prediction is that Federated CDNs will finally shift from concept to reality in 2012. This has been a hot topic of discussion at content delivery conferences over the last year, and Hurley says that's for good reason. As Federated CDNs move from concept to reality, it will cause a seismic shift in the CDN market.

"CDN Federation stands to be very disruptive, giving service providers an unprecedented opportunity to compete directly with market leaders like Akamai and Limelight in the global CDN arena."

In June of 2011, Dan Rayburn announced on his blog that a group of telcos had founded an Operator Carrier Exchange (OCX) to formalize the process and standards of interconnecting their content delivery networks. Just a few months later, Cisco announced at the CDN World Summit that it had completed a CDN interconnection pilot with several tier 1 telco providers (BT, KDDI, Orange, SFR and Telecom Italia).

In my conversation with Hurley, he skipped over the following three trends, but encouraged people to download the white paper to read more about how they'll be taking greater shape in 2012:

4. Adoption of Adaptive Bitrate protocols will grow 
5. IPTV providers & MSOs will extend reach into OTT models 
6. Multi-screen viewing will become the norm 


7. Online video advertising budgets will soar

And, finally the last trend is that online video advertising budgets will soar. Hurley says that it's created a virtuous cycle based on a confluence of factors that plays in its favor. First, technology is finally at a point where online video resolution and reliability is to the advertisers liking.

"Advertisers buy an audience," says Hurley. "They also buy adjacency to content and they have to have that in a quality experience, and that's what they're able to get now."

They're also able to to tap into new technologies like adaptive bitrate streaming which holds the promise of ad insertion into a live stream, and that mirrors the model of traditional TV advertising. But most importantly, advertisers go where the audience and the audience is increasingly going to tablets, mobile phones and laptops to watch online video. So that confluence of virtuous events is really poised make online video advertising budgets grow 27% in 2012.

To download the white paper, go to: Skytide website
Slideshare: 7 Online Video Trends to Watch in 2012

About Skytide
Skytide, the leader in Online Video Management Analytics, provides content delivery providers and digital media companies with the most complete operational view of their streaming video businesses, delivering the information necessary to make better-informed business decisions. Only Skytide's out-of-the-box analytics and reporting solutions can process massive amounts of disparate data sources and turn it into detailed reports in near real-time. Skytide is venture-backed and works with leading digital media and technology companies including: British Telecom, Broadpeak, Cisco, Clear Channel Communications, HP, Juniper Networks, Telecom Argentina, Telecom Italia, Telefonica and Telstra.

Update  2/21/2012: Revised copy, added numbers 1-7.

Adaptive Bitrate Technology: Meeting the Multi-Screen Challenge Head On – Matt Smith, Envivio

As the demand to deliver content to consumers on multiple screens continues to grow at a rapid pace, companies adapt their methods and means to meet the challenge. It's no longer a notion or idea on the horizon – but a mandate for many product and services in a multi-platform world, where consumers want any content on any device, anytime and anywhere. This is both exciting and worrisome for service providers and content owners – but new trends and tactics like adaptive bit rate (ABR) streaming is changing it all and making it easier to deliver content, says Matt Smith, VP of Internet Television Strategy & Solutions at Envivio.

Smith attributes the accelerated change of multi-screen delivery to the "hockey stick effect" of mobile video viewing trends. He cites Cisco's Visual Networking Index: Forecast that says, "By 2014, all forms of video will constitute 91% of global consumer Internet traffic." (from Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2010–2015  [Visual Networking Index] - Cisco Systems)

Adapting to ABR 

"Adaptive bit rate encoding has been around for a few years," says Smith, "but we're really starting to see some increased uptake as broadcasters and content providers fully embrace the TV Everywhere experience. We're seeing true convergence happening."

ABR streaming was first developed by Move Networks and is now offered in several different flavors by Adobe Systems (HTTP Dynamic streaming), Apple (HTTP Live Streaming) and Microsoft (Smooth Streaming). It works by taking a single source video and encoding it at multiple bit rates. When the video is requested over the network, the content adapts to the network not the network adapting to the content. A user's bandwidth and CPU capacity is detected in real time and the quality of a video stream adjusts according to the changing conditions. 

Each bit rate version is sliced up into tiny fragments and the video player pulls fragments from the different encoded versions and inserts them into the stream as bandwidth dictates. The result is faster video start times with little or no buffering which translates to better viewing experiences. (From Skytide Insight for CDNs - Adaptive Bitrate Streaming)


According to Smith:

"Adaptive bit rate gives some commonality amongst these formats, (from Adobe, Apple and Microsoft), [and] all have common codec payloads in AVC and AAC. So what we're able to do is create a common encoding experience so instead of creating every stream rendition on the encoder, we're creating resolution renditions and delivering those to the network where we catch it (if you will) in what's called a network media processor (NMP)."

Envivio's Halo product is a NMP that can take in 50 different channel renditions and output thousands of streams. A NMP is very beneficial for CDNs and has other functions like DRM, content encryption, ad detection and insertion, television ratings to closed captions. Smith says the NMP stage is the next evolution of ABR and network functionality where the customer/operator is given a lot of scale. Smith added that traditional method of streaming, in which encoder creates multiple renditions, is still very valid for operators with only a few channels. But for those operating multiple channels, this is a new and dynamic approach that they'd want to consider.

Smith advises that for content owners, all screens are a MUST HAVE, and says:

"If your media strategy excludes screens, revisit your strategy. There is no one platform or group of users you should exclude. Channel growth will exacerbate the problem – number of screens will increase."

Smith shared the following points in Adapting to ABR:

• Enables experiences/resolutions -­ mobile to HD
  – Better QoE for viewers/users
  – Adds complexity: additional renditions/screens
• Chunked formatting/delivery
  – Boundaries  and chunk lengths vary by format
• Video & audio payload similar between formats
  – AVC/H.264 -­‐ Video
  – AAC -­‐ Audio

‘Hey Matt - is there one universal codec?'

That was a real question an unnamed Yahoo! Engineer asked Smith in 2003, and almost 10 years later it still brings a smile to his face. Smith has been involved in every aspect of digital video systems design, compression, workflows and delivery for 15+ years, having worked with industry leaders like NBC, Yahoo!, Inlet Technologies and Cisco. He recounts how in the past, different workflows were created for the different streaming environments. There was one for web, one for mobile, one for television and for a variety of reasons there were multiple streaming formats. Hence the best question of career which he says has gotten a lot of laughs over the years. 

Smith says, laugh if you will but where we are today with ABR and the common payload of AVC/H.264 video and AAC audio, it has enabled these chunked ABR type experiences creating the option to do common encoding within a M2TS wrapper to generate multiple renditions on one small platform, and enable a lot of scale. 

Key Takeaways…

Smith says that with ABR, you're essentially creating similar number of streams, but in a different part of the network. You get significant scale gains and you should plan to deliver to every possible screen. The workflow not for every organization and where channel count is low, "old" models work. 

It's about moving from live to live: file to live, live to file. ABR allows for real time packaging (think about… request for right device at the right time) and request based delivery, runtime encoding and delivery. The benefits of a NMP as origin server provides value beyond is packaging and assists with cache.  Smith sees ABR and NMP solutions as key technologies to help service providers and content owners meet the multi-screen challenge on head on and win.

About Envivio
Envivio is a leader in solutions for multi-screen video-over-IP delivery. We design our solutions to remove the boundaries of traditional television and make the world’s video content universally enjoyable by all viewers, on any device, across any network, at any time. Now in its second decade of developing market-leading video convergence solutions, Envivio has amassed dozens of patents, pioneered video-over-IP methods, and led in the deployment of emerging standards and new technologies.  Envivio’s customers include global tier-1 service providers, including eight of the top 10 mobile operators, seven of the top 10 broadband providers and three of the top four cable operators.  Envivio is headquartered in South San Francisco, California and has offices worldwide including France, England, China, Singapore and Japan.