Home EuropeEurope II 2014 Video explosion changes the game for service providers

Video explosion changes the game for service providers

by Administrator
Calvin HarrisonIssue:Europe II 2014
Article no.:5
Topic:Video explosion changes the game for service providers
Author:Calvin Harrison
Organisation:IneoQuest Technologies
PDF size:194KB

About author

Calvin Harrison is Chief Operating Officer for IneoQuest Technologies. Calvin brings over 22 years of experience in the technology industry and a wealth of leadership and business expertise to the IneoQuest management team. As IneoQuest’s COO since 2010, Calvin is responsible for leading IneoQuest’s daily operations, as well as overseeing the strategic development and execution of the company’s corporate and product initiatives. Calvin previously served as Vice President of Marketing and Business Development from 2008 to 2010, where he oversaw the strategic positioning of IneoQuest and its growth into the global leader in Video Service Assurance solutions.

Calvin’s professional experience prior to IneoQuest ranges from the negotiation of mergers and acquisitions to advanced Research & Development engineering at companies such as Motorola, Freescale Semiconductor, Surgient, and Zilog Semiconductor. This experience includes closing multi-million dollar OEM and strategic partnership agreements, international business development and management, product marketing, program management, professional services, and holder of four design patents.

Calvin holds a Bachelor’ degree in Electrical Engineering (cum laude) and Master of Business Administration (magna cum laude) from the University of Texas at Austin.

Article abstract

The shift from family home TV viewing to online PC/tablet/mobile personal viewing enables target advertising to be more focused and more effective, but advertisers need to have details of consumption behavior, when and where, devices, content, and so on. User experience of video consumption is greatly affected by the quality of service, and consumers will now pay for it, at the right markets for the right content, so identifying such markets is essential to the pricing video delivery. The NFV concept gives operators the ability to manage historically disparate network functions as a virtual system, providing greater overall visibility. Incorporating video analytics and service assurance can now bring together operational visibility with subscriber consumption data to get more precise demand trends and consumer behavior, which provide the means for operators to monetize their video services.

Full Article

In today’s high bandwidth, broadband world, it should come as no surprise that video is leading the way in digital services. According to the Cisco Visual Networking Index (VNI), by 2018 90% of all Internet traffic will be video related, and that number is likely to continue to climb. By comparison, total video traffic in 2017 will be triple that of 2012.

Not too long ago, our choices for video content were limited to a handful of channels that could only be viewed on an analog TV set. Now we have hundreds of television channels as well as streaming content and other sources of video that can be watched on a multitude of devices, from the latest HD TV sets to tablets, smartphones, gaming consoles and more. For instance, in Western Europe, Forrester Research predicts video tablet ownership will quadruple by 2017, with the percentage of online adults owning a tablet projected to increase from 14% in 2012 to 55% in 2017. With this enormous amount of content, which is only getting larger, and the diversity of devices involved, service providers are struggling to quickly develop new money making offerings for this video-hungry audience.

Rethinking old business models
The old cable television business model that included a set-top box and a controlled environment where the operator knew exactly who was getting what services is over. Service providers may still claim ‘ownership’ over customers, but that relationship is rapidly changing, and in many instances content going over operator networks originates somewhere else entirely.

The combination of vast amounts of video content, coupled with the increased choices consumers have in how they consume that content, has led service providers to seriously reconsider their existing business models. Today’s consumers want their content anywhere, at any time and on any device. For example, they may see their operator as just a pipe coming into their home but rely on streaming services for the bulk of their content. The increasing challenge for providers is to support consumer’s wants without losing money at the same time.

One of the better ways to monetize providers’ video services is through targeted ad insertion – the more connected devices a provider can reach, the more opportunity for advertising revenue. The Forrester Research’s ‘Online Display Advertising Forecast 2013 – 2018 (Western Europe)’ shows that European Internet users spent 68% of their online time in 2012 watching online videos, and we expect more than 90% of the online population to watch online video regularly by 2017. As a result, video advertising will account for a third of total display advertising spend in 2018. With traditional set-top boxes, operators were limited to targeting the ads to a group of subscribers, but within the home they had no idea of the demographic watching the content. You might have four people in a household with a wide range in age and interests, but they all see the same commercials. However, when delivering ads to a tablet, laptop or phone, it becomes a much more personal experience, making it easier to target ads based on the content consumers watch over time. The shift in viewing habits as consumers watch more content over the internet and mobile devices is allowing service providers to expand their subscriber base and premium ad spots. But without the necessary data, targeted advertising will result in contextually irrelevant ads to the end user, and lower-than-expected results.

The video network of the future
While targeted advertising is one way to monetize video consumption, operators first need to focus on the quality of their video services. Without being able to assure quality of service, they can’t charge a premium to advertisers who might be interested in a specific demographic. Poor video quality leads to a higher probability of churn as the number of content provider choices increases. The consumer recognizes that high quality video content is worth paying for and will choose those with the best service. Unlike years past when there might have been only one TV provider in a particular geographic area, now the cable operators of the world are competing with satellite providers, telecomm / IPTV providers, and internet streaming services such as Amazon, Hulu, Netflix and more.

Furthermore, for all the talk about content being king, it is truly only one side of the coin. What will distinguish providers is the viewer’s experience. Just building out a video network doesn’t guarantee customers will flock to you anymore. Most providers offer HD services with all the bells and whistles. To provide the best service and quality, operators will need to harness critical information from within their existing networks, as well as turn to new methods to optimize their networks for the future.

Tuning into video analytics
Before monetization can really get off the ground, operators need to have a lot of information readily available. This includes operational data (service quality data), but it also goes beyond network operations to include detailed information about subscriber viewing behavior. Only when all of this information, both operational and behavioral, is brought together can operators get a clear picture of exactly what’s happening within their networks and how to leverage that knowledge.

Service providers in the video space have a treasure trove of so-called “big data” that can give them insight into a number of areas, including which customers are watching what programs or channels and for how long. This type of subscriber data is critical, but to be truly effective it will also need to be tied into operational data to get the full picture. For example, providers who want to know why a significant number of viewers tuned off a service during a particular time period should be able to look at their operational video data to see if any issues occurred that might need to be fixed or fine-tuned. Maybe the problem was only with a certain device trying to access the content, so that may lead them to updating an app for that device. They might also discover that most of their viewers are watching on a particular brand of smart TV or tablet, which might lead to a decision to only build apps for certain devices rather than trying to cover every device on the market.

Video analytics, the combination of operational and behavioral data, provides the means for operators to monetize their video services. Targeted packaging and more customized offering for the subscribers is one example. Video analytics can tell the operator that in a particular region a lot of subscribers watch sports, which may prompt the operator to expand its sports channels and/or repackage programming to target the services that are most popular. There are so many possibilities stemming from network and subscriber intelligence, but operators need to be able to gather and leverage this data in order to optimize and grow their returns.

Signing on to NFV
Service providers – cable, telco, and satellite – are starting to look at software defined networks (SDNs) and the network functions virtualization (NFV) concept to help them build-out new networks to support the consumers viewing behavior without incurring high capital and operational costs. NFV is new concept aimed at reducing the hardware, power, and space requirements to deploy network functions, which lowers the overall cost and provisioning times. Separating network functions from hardware has many benefits for the service providers, such as reduced network maintenance costs, easier network upgrades, longer life cycles for network hardware and reduced maintenance and hardware costs.

When building a content delivery network (CDN) and a cache site at the edge, the network design requires a caching server, hardware running middleware and monitoring equipment. The NFV concept gives operators the ability to collapse historically disparate network functions into a single hardware solution without losing functionality. Many operators are beginning to realize the benefits of NFV today, as they are in the initial stages of implementing such solutions.

Managing growth, staying competitive
There’s no doubt video service providers have many challenges ahead. Competition from non-traditional players, the huge growth in video traffic going over their networks, the end devices they do not own and the changing habits of their customers are all contributing to the need for a new business and network model. Incorporating video analytics and service assurance brings together the all-important network operations and subscriber data to get a clearer, more precise picture of how the network is functioning, where pain points exist, how customers are consuming video content and on what devices they prefer to view it.

Once operators have this information in hand, they can bring it to advertisers who may be interested in more premium targeted campaigns. They can also use the data to make decisions on the content offerings and packaging, as well as, help decide what specific end-user devices to support. These best practices will be absolutely essential going forward to manage the ongoing video explosion, reduce customer churn and monetize their services and offerings.

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