Authored by Laurent Lafarge, CEO
Back in 2014, Anevia published a whitepaper on Live OTT distribution with a focus on edge-packaging and made some predictions.
So, what did we get right or wrong and what did we simply not see coming?
VoD is the driver, but which VoD?
Although we identified VoD as a key driver, four years ago we didn’t recognize the extent to which SVoD services, such as Netflix, Hulu, or even Amazon Prime would be the true market drivers. We thought that like in France at the time, the global market would be driven by the de-linearisation of live TV from established broadcasters with DVR, time-shifting, catch-up TV and transactional VoD. These services have indeed made progress, but from a global perspective, it’s the unabated growth of subscription VoD that has truly driven the market.
And how fast?
Industry experts were discussing at the time how we’d manage a move from 100% of content being viewed on traditional broadcast systems, down to 80%. However in France, by 2010 over a third of TV was already consumed non-linearly, driven by operator STBs with integrated catch-up TV services. IDATE was still predicting in 2013 that by 2022, 82.3% of global TV revenue would still come from linear services. It was a confusing time and we are now seeing confirmation of the continued drop in traditional broadcasting.
Is the cake getting smaller or larger?
There’s more to de-linearization than people just stopping watching live programs to watch them on-demand: the flexibility of multiscreen on-demand services made it finally possible for those with busy schedules to find the time to relax and enjoy TV content – when and where it suited them, not only when the live programs aired and they happened to be in front of a TV. Disruptive de-linearization innovation has thus taken some audiences away from traditional broadcast while also adding new use cases like mass-binge watching, which is why many premium pay TV operators like Sky have managed to grow through the disruption.
We don’t know when linear broadcast will stop declining. Although linear services remain important in the 2018 landscape, from a technology vendor’s perspective we are still not seeing linear services driving the OTT market.
In the US, 18-24-year-olds have reduced their traditional TV consumption by 44% in the last five years! Source
Could latency and delay be the keys to live streaming?
A central aspect we missed four years ago was the importance of latency and delay to deliver compelling linear TV services. This is mainly because social media integration with live TV was just a gimmick back then. Now that it’s a reality, operators are looking for solutions with a real-time to final-display latency of no more than a few seconds. This could help turn linear programming into the real driver for OTT services we thought it would be.
Our 2014 whitepaper predicted that edge-packaging would be a big phenomenon – we got this wrong and it hasn’t happened. That said, edge-processing still has great potential and transcoding at the edge, although different from packaging at the edge, could bring some of the benefits we saw four years ago.
In 2014, we had recognized that storage could be either a driver or an inhibitor for non-linear services, but we missed just how crucial it would be. Indeed, the number of different profiles that need to be supported, in multiple flavours of ABR, meant that storage in the CDN has been one of the key hurdles for operators venturing into OTT. There are many initiatives in this area like the blockchain-based, modestly named, Interplanetary File System (IPFS).
We still don’t have a crystal ball, we’re still learning and we will publish an eBook next quarter with an updated view on the OTT video market. We’ll go into a lot more detail on latency and delay as we’ll explore some exciting opportunities. We’ll also give some indications on new trends we expect to see, for example shared or common infrastructure for content delivery. So stay tuned, I’ll post a link here when it’s ready.