This one’s for everyone careening out of the holidays and into 2017 — while necessarily keeping an eye on what’s about to happen at the upcoming International Consumer Electronics Show.
We’ll be at the Wynn Hotel again, with a hot lineup of products demonstrated– way more than I could possibly describe with any degree of brevity.
Here’s the quick version: We’ll be showing a healthy set of extensions to our Infinite Video Platform, which solve multiple riddles, like how to launch new, IP-based services on legacy boxes. And delivering video quality everywhere, accelerating service creation, and a new advanced watermarking method designed for eliminating live streaming piracy. That, plus preparing your network for the growth in IP traffic and video services with Cloud Scale Networking solutions. It really is a good time to come see what we’re up to!
On the news front, we’re unveiling a video innovation community, Infinite Video Platform Labs, with our customers to test new features with their users. It’s a real-world implementation of our agile development approach, and I’m pleased to report that YES, Israel’s leading providing of satellite-based multichannel video, is among the first operators to sign on.
And now, allow me to share our (pretty exhaustive!) reading of the tealeaves, here on the brink between ’16 and ’17, and as it relates to what’s ahead for content and service providers.
Let’s start with what’s for sure. We know where video consumption is going, for starters. It’s going all-IP and mobile. Millennials, for instance, watch 70% of TV online, and consume twice as much mobile video as 23-59 year olds; our Visual Networking Index (VNI) Forecast indicates that by 2020, 82% of the Internet’s traffic will be video by 2020.
While viewing is moving to IP global broadcast pay-TV is $400 billion market — $180B of it from advertising, $220B from subscriptions. (Yes, 2016 saw some major linear networks reporting significant (10%) subscriber losses. Yes, some (but not all!) multichannel video providers also saw slippage. Let’s face it: $400 followed by nine zeros is still a really big market. Doom is a choice.
Some interesting context: Recently I had the occasion to hear Joe Zaller, broadcast-side sage and founder of Devoncraft Partners, speak to this very issue. He was talking about ESPN, and the news earlier this year about economic differences between the network’s online and linear properties. “With 100 million unique visitors per month, approaching $500 million in digital revenue, ESPN (online) is making the equivalent of $0.42/sub/month … while linear ESPN gets $7.20/sub/month, and ESPN2 another $0.80/sub/month.” Conclusion: “There’s a problem there.”
I agree. It’s an interesting puzzle — moving video assets and services across any network, any platform, to any device. One issue (which gets clearer daily) is that “going multi-platform” doesn’t make sense with today’s operating models.
Why, because the very nature of broadcast TV involves high fixed costs, and few variable costs. But! If your costs scale as you deliver video over more networks and platforms — as is the case with point-to-multipoint IP delivery …. well, here we are.
Our premise, which threads throughout our Infinite Video Platform, is that there are ways to be better than pay-TV alone, or OTT alone.
Except it’s not a “1+1=3” thing. That’s far too finite. More, it’s about reinvention, the hard way. Hard, because this particular reinvention necessarily includes a commitment to do so perpetually. Continuous improvement = table stakes.
Here’s one actionable way the pay-TV community can exceed both broadcast and OTT: Commit to the highest available video quality, “broadcast quality” everywhere, on any device, no compromises. What constitutes video quality? Here’s a short list:
- Video that starts instantly.
- With rock-solid picture and sound.
- That only pauses when the viewer says so.
- And that same stream, is not 30 to 60 seconds behind what’s on TV.
solving the video quality issues consumer experience on OTT, , service providers are one step ahead on making IP video better than broadcast and OTT. If they could deliver a personalized service with video quality, everywhere, and do it in a cost effective way, service providers could win the hearts of today’s video consumers.
That’s a brief look into what we’re doing at CES, and why. Happy New Year and see you there!