To 400G & Beyond

NGON & DCI Europe 2018

Operators know it all too well: streaming video, cloud computing, the Internet of Things and the evolution to 5G place massive pressure on today's networks, requiring capacity increases by orders of magnitude and the ability to respond to even greater unpredictability in traffic patterns. The optical network sits at the heart of communications, connecting people, data centers and an increasing number of devices across any distance, from next door to an ocean away.

https://get.knect365.com/ngon-series/400g-and-beyond/?_ga=2.86520856.1496769491.1522498944-1343208758.1518033579

With both the cloud and the IoT coming to dominate the enterprise data environment, the need to push connectivity across greater distances becomes paramount.

Recently, numerous platforms and service offerings have that aim to forge tighter links not only between remote data centers, but between individual server and storage components within those data centers. Ultimately, the aim is to produce a single federated ecosystem that spans local, co-located and cloud-based infrastructure, all defined on an abstract, virtual layer to achieve limitless flexibility and scalability.

This requirement for high-bandwidth services comes particularly from cloud service providers, who seek both higher bandwidth networking and software defined network-enabled connectivity solutions. Data center-based traffic is expected to nearly double by the end of the decade, growing to 20.6 zettabytes in 2021 from 11.6 zettabytes in 2017, with the cloud accounting for 95% of this traffic, according to Cisco's Global Cloud Index: Forecast and Methodology, 2016-2021.

The significant escalation in enterprise traffic is manifest in enterprises' migration of IT to public data centers and cloud services, driving demand for cloud connect services and increasing Ethernet service bandwidth by close to 30% annually, Coriant found.

Advances in Ethernet switches drives the data center interconnect (DCI) market, reports research firm Ovum. The 100Gbit/s equivalent DCI market will enjoy a compound annual growth rate of 56% between 2017 and 2021, driving the need for low cost 100Gbit/s over single lambda (wavelength) solutions, Ovum found. At the same time the industry will start adopting higher speed 400Gbit/s links also using single lambda technology. As 400G switches enter the market, optical transceivers must keep pace and rapidly transition to 400Gbit/s.

A series of three reports dives deeper into the state of the next generation optical networking market as technologies and deployments ramp up from 100Gbit/s to 400Gbit/s and beyond.

Download the first report of the series “400G and Beyond” here   

HEVC - AV1 codec competition is welcome but it’s too early to judge

Rohde & Schwarz

NAB 2018 is the first chance for visitors to test the performance of AV1, an emerging encoding technology pitting itself against prevailing standard HEVC.

https://www.rohde-schwarz.com/uk/solutions/broadcast-media/always-on-blog/posts/3-18-hevc_232174.html

Despite doing exactly what its name suggests and seen as the best solution for UHD and HDR video broadcast services, the High Efficiency Video Codec (HEVC / H.265) has faced slower than expected take up compared to previous MPEG standards.

This is put down to a reluctance among content providers, particularly online streamers, to pay what they see as exorbitant licence fees.

With three licensing pools (MPEG LA, HEVC Advance, and Velos Media) and multiple undeclared licensing entities, the codec’s fragmented licensing system is also a drawback.

What’s more there is a massive base of entrenched H.264 AVC equipment which is doing a perfectly good job facilitating HD services in large parts of the world. In addition to which, new Content Aware Coding techniques are proving to boost the picture quality, reduce the distribution cost and prolong the life of legacy H.264 kit.

In an effort to provide a truly open video codec capable of providing high quality video streaming at lower bitrates, Google founded the Alliance for Open Media (AOM) and has gained the backing of virtually all leading industry players and tech companies including ARM, Cisco, Facebook, Google, IBM, Intel, Microsoft, Mozilla, Netflix and NVIDIA and most recently, Apple.

With the code now frozen and the first test results in, AV1 is claimed to deliver a 30% bitrate saving over HEVC for the same quality. This prompted speculation that it rapidly supersede HEVC to become the new de facto standard.

Rohde & Schwarz think it too early to speculate on AV1’s viability as a competitor to other codec technologies.

Rohde & Schwarz anticipates HEVC being more slanted towards professional domains with AV1 towards consumer domains.

It uses HEVC in its encoding and multiplexing solutions for consumer delivery and HEVC in its production products also. Rohde & Schwarz also says it would use AV1 in future for professional production areas “if we thought it benefitted our customers and their workflows or demands”.

However, our reading of the situation is that for our core production workflows AV1 is not the first codec for us,” says the company. “In terms of licence costs this is of secondary importance in our professional production areas where performance is paramount. For consumer delivery systems then, of course, the license cost will affect our customers and we do need to be sensitive to that in terms of which delivery codecs we support in future.”

While HEVC is delivering today on its promise of halving bitrates over H.264 AVC, AV1 is barely out of the lab.

Then there’s the fact that creating a product with an AV1 decoder will take about 18 months and it will take longer for support to be ubiquitous. It will happen eventually, but not on the day ratification of the standard is complete.

Other variables that could impact AV1 maturation: open source software development can take unexpected twists and turns; and while royalty free, it is not ‘indemnification free’ against patent claim violations.

HEVC has broad support

While not impervious to next-generation codec advances, HEVC has a well-established base at this point with an estimated 1 billion HEVC-enabled end points in the market. HEVC also has broad support from major OTT streaming services like Amazon, Apple, and Netflix and across the encoding vendor ecosystem.

Already though AV1 has already had an impact. Bowing to pressure, HEVC Advance has decided to eliminate streaming content distribution royalty fees, on top of reducing certain royalty rates and caps.

It is conceivable though that many media companies and video-capable enterprises will take a multi-codec approach to support video infrastructures. For example, Amazon Prime Video and Netflix take a multi-codec support approach: both are AOM members; both are HEVC users; both distribute content in additional codecs like AVC depending on the device making the request; and, both are active in AV1.

Looking ahead, the industry must also develop a means to compress massive data to handle applications from multiple UHD streams to light field. MPEG, ISO and ITU is exploring ‘omni-directional’ video coding technologies and has based its work on HEVC. Expect news of its progress at NAB.

​IABM: “Significant M&A Activity” Still to Come

Broadcast Bridge 

The traditional broadcast equipment industry is in a state of flux, with continual consolidation on the media customer side impacting M&A on the vendor side. The IABM recently reported a slight increase in sales but a worrying decline in profit growth, running at 75.9% of the December 2016 level. On the cusp of NAB 2018, IABM CEO Peter White shares his perspective on where the market is now and where it is headed.

https://www.thebroadcastbridge.com/content/entry/10664/iabm-significant-ma-activity-still-to-come

The continuing shift in buyers’ preferences for software running in generic IT technology, their increased concern for efficiency and a highly competitive market are all continuing to exert pressure on selling prices, with margins reducing despite vendors decreasing expenditure on R&D, recruitment, sales, marketing and shows.

Unsurprisingly, the IABM confidence ratio, which reflects business sentiment looking forward for the next year, declined from a fairly robust 7.4 mid-2017 to a less optimistic 5.6 in December 2017; this is relatively low by historical standards. Companies that primarily rely on software revenues were however significantly more confident than those primarily relying on hardware revenues – reflecting the now long-standing transition of technology buyers from hardware to software.

What is the value of the global broadcast equipment manufacturing market - and how is this changing?

IABM CEO Peter White:  Revenues in the broadcast and media technology market were about $51bn in 2016 according to figures from the IABM DC Global Market Valuation and Strategy Report. This is up by 2.3% from 2015. However, the overall growth experienced by the industry masks the disparity between different product categories. In fact, while bespoke broadcast technology is on the decline, new categories such as cloud and OTT services are growing significantly.

It depends, however, how you define the boundaries of our market when trying to define its size; IABM recognizes this and is working to redefine its industry model to reflect this – expect an announcement at NAB. While the ‘traditional’ industry is largely static in terms of size, today’s wider industry is expanding dramatically, but doing so at a lower price point.

How does this compare with the size of the global IT market (do you have figures for this) and what does this tell us about the changing nature of the broadcast industry?

Peter White:  Revenues in the global IT industry were about $3.5tn in 2017 according to Gartner. This means that the broadcast and media technology market is about 1.5% of the total value of the IT industry. Other market sizing reports differ in the valuation of the IT industry, but the values are still in the range of trillions.

If a core part of the traditional broadcast equipment manufacturing industry was about selling proprietary hardware at a high margin – what do those vendors need to do in order to continue to make money?

Peter White:  According to IABM data, the deflationary effect of hardware commoditisation continues to stifle traditional broadcast technology suppliers’ profitability despite the sustained level of R&D investment made in recent years. Traditional businesses are going through a transformation to adapt to their customers’ changing requirements. What they need to do is change, offering products that tackle their customers’ issues in a multi-platform world and moving to new business models centred on the flexible provision of software.

These models rely on a radically different financial balance that prioritizes Opex over Capex – smaller, monthly (or daily) cashflows rather than larger upfront payments. This transition often entails an initial revenue slowdown that may be difficult to implement (or accept) at some organizations. From a cultural perspective, skills also need to adapt to this change as new methods of product development increasingly demand a blend of broadcast and IT skills.

There is another major trend gathering pace in the industry – towards collaborative solutions developed jointly by vendors and their end-user customers. IABM recognized this when it launched its Creative Collaboration Award last year for just such projects. All the talk over many years of ‘solutions’ - which actually just meant selling a mix of products in most cases - is finally becoming a reality, and this will increasingly be the way forward. You only need to look at the success of ventures such as the IP Showcases at NAB and IBC to see the industry’s positive momentum towards working together to come up with better ways forward.

How can broadcast vendors provide a value-add in the age of global IT giants with mammoth R&D, global IT standards and virtualised web-based software tools?

Peter White:  According to IABM data, most media technology users still prefer best-of-breed solutions, leaving many doors open for media technology vendors. In fact, their customers are still looking for the dedication, support and flexibility provided by smaller specialist suppliers – large IT companies have a weaker interest in this as the broadcast and media sector represents a small slice of a big pie for them.

However, 98% of technology users demand interoperable solutions. This requires vendors to adopt a more open approach to product interoperability. But although SMPTE ST2110 will address many on-premise interop problems, it takes on quite a different character in the cloud because it’s software interoperability that’s the issue, and transportability of solutions will become a major consideration. Work is going on in this area right now.

Does exhibiting at trade shows like NAB and IBC provide value for money?

Peter White:  According to IABM data, media technology suppliers continue to invest almost half of their marketing budgets in trade shows such as NAB and IBC. Trade shows enable vendors to hit the maximum number of potential customers as close to launch as possible in a cost-effective way. As we move away from stands full of bespoke hardware, their nature is changing towards being ‘talking shops’, where people meet people and compare and contrast offerings, giving them a snapshot of everything that’s on offer at a single point in time.

This means that exhibitions will take on a different character from what we have become used to over the last 30+ years – but they will provide an ideal environment to further the kind of creative collaborations I mentioned earlier, which start with people meeting people and talking about how to solve problems and break new ground.

Can you paint a rosy picture for the future of broadcast kit manufacturers that does not involve M&A?

Peter White:  Although some suppliers are going through difficult times as of late, there are reasons to remain positive about the future of media technology. In the shorter term, 2018 will be a ‘spike’ year with plenty of events-related spending guaranteeing growth and opportunities for many. Adoption of emerging technologies such as cloud, IP and AI will continue to rise, driving more growth for those that have invested in them.

In the long-term, media technology spending will also continue to grow as traditional end-user broadcasters try to keep up with the volatile nature of online video. As mentioned above, traditional media technology vendors can take advantage of this by supplying end-users with products that address their business challenges in the transition to a multi-platform world. Product excellence, support and interoperability may be important factors in determining their survival through this unprecedented change.

Having said that, there will continue to be significant M&A activity for two reasons. Firstly, we now have several thousand technology suppliers chasing business from an ever-diminishing number of customers thanks to ongoing M&A activity between many major players – as I write this I’m just hearing about Comcast throwing its hat into the ring for Sky. This inevitably puts pressure on prices and reduces profitability for vendors. They will therefore need to respond accordingly, and further consolidation is inevitable. Secondly, traditional suppliers with an enterprise mentality can find it hard to develop innovative new solutions, and they will often look to buy this innovation in by acquiring smaller, more agile companies.

AV in the UK; The Price is right

AV Magazine

A benchmark for new technology it may be, but price sways buyers in the UK where Brexit preys on minds and opportunities abound outside the capital.

https://www.avinteractive.com/features/market-sectors/the-price-is-right-22-03-2018/

One of the most mature markets in Europe, the UK is home to a disproportionately large number of regional HQs for Asian and North American multinationals, a position which has supplied a lot of business and cemented many relationships within the AV sphere going back decades. That network is unlikely to be unpicked in a hurry no matter the outcome of Brexit.

“The UK is seen as the benchmark for new technology across Europe as companies look to be recognised as best of breed,” says Paul Corsbie-Smith, sales and account manager, Datapath. “With many companies having offices or personnel across multiple countries it is important that everyone is able to connect seamlessly using the same technologies.”

Pierre Gillet, vice-president, international sales at BrightSign describes the UK as “innovative and dynamic” but no more (and no less) advanced than Germany or France; while Andy Nolan, regional vice-president at Lifesize believes the UK and London in particular to be a pro AV leader but not as advanced as places, such as Sweden.

Within the field of high-end VR installations that Antycip Simulation works in, the UK is “a step behind the leading-edge public-private initiatives” encountered in France: “It will be a while before the UK has embraced VR as much as the French,” says Frank Reynolds, the company’s European marketing manager.

John Ellis, Shure’s Installed Sound regional sales manager reports business as “very healthy and buoyant” and by example quotes a Microflex wireless install at the headquarters of pharmaceutical company, Bayer in Reading. “There doesn’t seem to be any let-up at all, and that could be to do with companies looking to update their AV equipment ahead of Brexit.”

Brexit ‘impact’ so far

The UK may be approaching leaving the single market like a rabbit stuck in wet tarmac but even with the economic uncertainty, confidence in deploying proven technologies remains high.

“The domestic market remains buoyant and moving forward in terms of new projects and upgrades to existing installations driven by an experienced integrator community,” says Colin Farquhar, ceo, Exterity.

InfoComm/IHS analysis estimates the UK market’s worth at almost U$5.2 billion (£3.75bn) in 2016, “significantly down” from U$5.8 billion (£4.2bn) in 2015 as corporate spend, particularly on collaboration equipment, was suspended and pushed back during the run-up to the Brexit vote and the subsequent fallout from it.

AVIXA suggests the market looks unlikely to recover in full until 2020 by which time “the spend profile will have moved toward digital signage in retail” with additional state and commercial spend on surveillance, already one of the highest in Europe.

“Barring catastrophic Brexit negotiations, or the complete collapse of business confidence, we nonetheless expect the UK AV segment to continue to grow at four per cent a year to 2022,” concludes AVIXA’s analysis.

“The only real impact we’ve seen directly is in the exchange rate – and the pound seems to have recovered somewhat now,” reports Gillet. “We’ve seen no impact on business levels which have continued to grow during and following the referendum period.”

Lower exchange rates have increased global pricing – an investment deterrent. “This affects the whole market so many vendors have marginally increased pricing so that everyone is aligned,” remarks Paul Corsbie-Smith. “That said, Brexit has not had an impact on our vision for the future.”

Mark Walker, business development for B-Tech AV Mounts also reports limited impact to date. “Major projects for us planned before Brexit have gone ahead without issue and we’ve felt no real slow-down on new projects,” he says. “Inside the UK it will be business as usual. For the rest of EMEA, our ability to supply locally from stock held in Belgium, Spain, Germany and Dubai helps keep our risk limited as we’re exporting less from the UK.”

The overall picture is positive at ed-tech specialist Promethean too. “However, the level of uncertainty which exists over the Brexit process is affecting schools’ confidence in making new investments. Ultimately this is reflected in their buying behaviour,” says Ali Hayward, head of UKI and ANZ markets. “We’re seeing a lot of hesitancy but not to the extent that it’s preventing market growth.”

GLP UK’s Simon Barrett, however, says uncertainty is having a negative impact: “Many projects, installations and events are planned so far in the future that we need to understand the real implications of Brexit.”

Be prepared seems the best advice. “Brexit requires an attitude of caution and preparedness to adjust, if necessary, within a relatively buoyant market,” says Reynolds.

Ed-tech in demand

It is education along with enterprise and finance which are widely viewed as the strongest growth verticals. Says BrightSign’s Gillet: “More and more corporates are recognising the value of signage to communicate with staff. There’s also considerable demand from education, especially HFE at the moment.”

This is evidenced by the latest Futuresource figures (Q3, 2017) which show that the UK has a 97 per cent adoption rate of IFPDs while France is only at 50 per cent. In terms of market maturity this puts the UK at least two years ahead.

“With the recent advances in IFPD technology, we’re also seeing a trend emerging whereby schools approach AV as an integration with IT,” says Hayward. “IFPDs are no longer simply a front-of-class display device, the powerful Android capabilities have opened up the functionality for IFPDs to become the connected hub of a classroom.”

Farquar identifies corporate and finance as key for Exterity’s IP video solutions. “Even with Brexit generating uncertainty around access to the EU, the reality is that companies will need an operating base within the UK, which has positive implications for AV,” he says.

“HFE recent funding changes has led to universities becoming more business focused. This has led to increased investment in AV technologies to support activities such as distance learning and corporate partnerships.”

The School of Veterinary Medicine at the University of Surrey worked with Exterity to deploy a large-scale IP video system to give students access to live streams and recorded videos of dissection lectures. Nine encoders and 15 screens were installed last year to transmit IP video across the school’s facilities, enabling the University’s AV team to transmit live footage of dissection sessions for viewing by up to 250 students at a time.

“There’s a lot of investment in IP video taking place,” says Farquhar. “However, it’s important to note that there’s still a lag as larger organisations attempt to sweat existing assets for as long as possible and plan for phased transitions.”

Not all about London

London and the South East in general tend to dominate business (and government) and is the major hub of technological innovation that provides the biggest contribution to the UK economy.  Yet Edinburgh is considered a significant AV hub, with Scottish parliament and banks operating out of the city.

“Manchester has seen a recent upswing – especially with the BBC moving a lot more production to the area, which has had an impact on AV projects,” notes Farquar.

Nolan points to the Titanic Museum in Belfast as “a great example of a company pushing the boundaries and using AV solutions to their full potential.”

Gillet thinks it wrong to characterise London as the centre of AV in the UK. “We work with customers throughout the country on installations and have supported numerous national signage roll-outs,” he says.

Likewise, Datapath is keen to focus on its work outside the capital. One that captures attention is the Bruntwood project at The Platform in Leeds installed by UX Global.  This office space features a 24-screen video wall spanning two floors starting in the reception area.

“It’s a work of art,” asserts Corsbie-Smith. The project features video artwork designed by the local graphic design students. [showreel here: https://www.uxglobal.co.uk/] “Almost all new corporate builds in London have a videowall in reception plus many more in meeting rooms and operation centres. Most banks have videowall technology and continue to upgrade these with the latest tech.”

He also charts an increase in activity in Birmingham and Manchester ranging from Gentings Casino to new build schools: “Technology is now more affordable and considered a ‘must have’ rather than a ‘nice to have’.”

Promethean puts its successful 2017 down to Scottish and Irish markets. “While England remains relatively flat, these countries have an equally strong outlook for 2018,” reports Hayward. “Scotland has really led the way with investment in edtech as its budgets are not affected by funding cuts in the UK overall. We’ve seen a major overhaul of technology in schools as they upgrade from IWBs to IFPDs as part of a wider ICT strategy.”

He expects a boost to edtech investment in England with the next general election. “We know that there aren’t enough classrooms for the number of children coming through the education system and this is especially acute in the South. As such, we’re likely to see new schools being built which would require edtech provision.”

Green credentials lurk in the background, but surprisingly seem rarely discussed. Conversations around install mostly come down to cost and convenience along with ease of use for the customer. “I’m aware of companies that measure the time it takes for meetings to take place, and if it doesn’t take place within a minute of everybody being seated the AV guy is in trouble,” says Ellis. “Efficiency and usage of time are the priority.”

Andy Nolan says growth is driven by new builds and refurbishments. “With many offices transitioning to an open floor plan, it’s becoming more important to have designated collaboration spaces free from noise and distractions. As such, the concept of ‘huddle’ rooms have arrived.” Lifesize markets a cloud-based collaboration platform as used by the Institute of Chartered Accountants to connect 700 employees in nine different office locations, from London and Milton Keynes to Dubai.

“As AV continues to merge within IT and facilities, we’re seeing purchase decisions being made by the cto or cio,” he adds. “If the client is not an expert in the pro AV market, they tend to outsource the project to specialists. These partners will provide a full valuation of the market, guidance and knowledge to the client to help make a purchase decision.”

Walker registers price as a major factor on larger roll outs. “For example, in QSRs – where a fixed long-term price is driven through the channel – it’s often an open book end-to-end,” he says. “The ability to quote and immediately supply from stock, even on projects perceived as ‘custom’ has seen a considerable shift and seen B-Tech often selected by default for LED and videowalls.

“The UK market is saturated so the importance of clean channel management, high levels of customer service and an extensive flexible product range from stock are key,” Walker stresses. “When you are one of maybe four key suppliers of commodity solution

Europe’s broadcasters in race to launch targeted ads

IBC 365

It’s a race against time. Even the most bullish advocate is fearful that if the TV industry is slow to develop strategies that bring internet advertising techniques to TV, the tech giants who dominate digital will take an overwhelming share of the emerging market.

https://www.ibc.org/delivery/europes-broadcasters-in-race-to-launch-targeted-ads/2738.article

Consumers are spending more time viewing OTT content on smart TVs with notable growth in live event TV. The opportunity to apply data-driven targeting and household-level addressability, as well the ability to apply programmatic trading to the TV market - all of which are difficult to realise on traditional TV platforms – is galvanising advertisers, agencies and broadcasters across the continent.

It could open up a market worth €825 million by 2020 across the UK, Germany, Italy, France and Spain, calculates SpotX, an online video ad platform in research conducted by consultancy MTM.

If broadcasters do not compete aggressively the worry is that Facebook and Google could capture between a third and a half of the total pot.

In the longer term, Amazon and potentially Netflix could look to introduce advertising into their services, cutting traditional players out further.

But at this moment there is a window. The big advantage that Facebook and Google have had is data, but if broadcasters offer addressability they can strengthen their case for ad spend.

 “There is now industry standard proof that television’s reach hasn’t changed in the last 10 years - but, to make the most of it, marketers need to plan across both TV and broadcaster VOD,” says Matt Hill, Director of Research & Planning, Thinkbox, the marketing body for commercial TV in the UK.

While pay-TV operator Sky has led the way in Europe with Sky Adsmart (and is reportedly on track to boost advertising sales to £1bn by 2020), it is the major commercial free-to-air broadcasters which are best placed to grow the Connected TV advertising space.

“They have the content, scale, reach and resources to respond to the opportunity,” according to SpotX European MD Léon Siotis.

 Some broadcasters have been quicker to react.

Scotland’s STV has been using digital ad insertion since 2014. The technology streams IP ads to connected TV sets, where they are dynamically inserted into the live broadcast signal arriving from terrestrial, satellite, cable or traditional IPTV sources. More recently, Channel 4 followed suit, and last November so did ITV. Meanwhile, Channel 5 in the UK has embraced Sky’s targeting solution (which is also being used to trade ads on Virgin Media’s pay platform).

Now a pan-European initiative led by the DVB aims to scale the market dramatically.

 “There is a genuine appetite for targeted advertising to be made available for classical broadcast television,” says Vincent Grivet, co-chair of the DVB’s CM-TA (Commercial Module for TA) group. “This is accompanied by the overall feeling that, with too many technical solutions, there is a risk of fragmentation in the marketplace that would hinder any progress.”

The Group is seeking agreement on a set of commercial requirements by June 2018. The DVB will use this to formulate a standard specification, in turn paving the way for the first market implementations in 2020.

The CM-TA hopes that the work of the DVB “can help unlock the full potential of TA in broadcast television.”

The technical framework for the service will be built on HbbTV, a platform aimed at harmonising broadcast and broadband delivery and in widespread use across Europe and also by broadcasters in Australia and the Middle East.

There are aspirations that a TA standard over HbbTV will go global.

“Standardisation leads to simplified trading and measurement for advertisers, and that’s a big selling point when judged against Facebook and Google,” says Tim Sewell, CEO at digital ad insertion specialist Yospace.

“There needs to be a strong focus on OTT as well as HbbTV though, for that’s where a lot of viewers are heading and at the moment the marketplace is very fragmented.”

To tap pan-European digital campaign budgets, a quadrant of broadcasters have formed the European Broadcast Exchange (EBX).

 The joint venture of ProSieben.Sat1, Mediaset (in Italy and Spain), France’s TF1 and Channel 4 is expected to begin trading soon. It caters for the “growing demand” for multi-territory video campaigns, initially traded programmatically.

EBX will additionally kick start a deeper collaboration between its members to “drive technological development in online advertising”.

However, there are significant challenges. Connected TV advertising sales strategies are immature across Europe and inventory is fragmented across different services making it hard to aggregate.

 “Much of what we consider to be CTV advertising – advertising delivered to a connected TV – is currently not sold as CTV advertising, but is often sold as digital advertising, and could appear on tablets or mobile devices as well,” says Siotis.

This lack of clarity about scale and value means some advertisers and broadcasters remain cautious about its prospects.

What will change the complexion is a new form of cross-industry collaboration in areas such as the sharing of data and new measurement currencies.

“Combining TV and digital audience measurement is crucial for the CTV ad market to develop,” says Siotis.

Improvements in audience measurement solutions are imminent. France already benefits from standardised analysis across digital and TV which was introduced by Médiamétrie in 2016 but addressable TV is currently prohibited in French law.

“Broadcast advertising is premium, regardless of whether it’s viewed on TV or over OTT…a three second view on Facebook doesn’t really compare.” Tim Sewell, Yospace.

Auditel in Italy is expected to upgrade its total TV solution this year. This month in the UK, BARB (Broadcaster’s Audience Research Board) was due to launch cross platform measure Dovetail.

However, according to BARB it’s taking longer than expected to produce multiple screen viewing figures (the outcome of Dovetail Fusion) to the standard the industry expects of BARB. It is assessing the data ahead of a review with the Board later in March.

It is already considered long overdue. Industry standard measurement (viewing within seven days of broadcast on a TV set) has not been able to keep pace with the changes in TV viewing.

Thinkbox points out that among 16-34s there’s an extra 13% of TV viewing that is not included as part of BARB’s measurement, “these being the most enthusiastic adopters of the new ways we have to watch TV.”

SpotX’s criticism is that BARB’s panel captures viewing of broadcaster content on connected TV services and via traditional TV but does not distinguish between the two.

While the likes of BBC and Sky have worked with BARB to measure audiences to programmes that haven’t featured recently in a linear schedule, BARB can’t yet measure viewing to SVOD services like Netflix and Amazon Video without their cooperation.

 “We can provide even more insight on new patterns of viewing when we have the cooperation of broadcasters or platform operators,” says BARB chief executive Justin Sampson.

One of the principal issues for media buyers lies in the different definitions for viewing an ad online and watching one on TV. An online impression could be as little as three seconds, the time it takes to scroll down a Facebook feed on a mobile phone.

“It’s key that the industry accepts that while both forms of advertising have value, the concept and therefore value of a ‘view’ differs wildly,” says Sewell.

“Broadcast advertising is premium, regardless of whether it’s viewed on TV or over OTT. A 30-second spot offers guaranteed high viewability, and association with premium content. Targeted advertising improves what is already an impressive proposition. A three second view on Facebook doesn’t really compare.”

What is Europe’s connected TV ad market worth?

While there are different views on measuring the size of each market MTM/SpotX register the CTV ad market in the UK as Europe’s largest market, in terms of both TV ad spend and internet ad spend. It is forecast to reach £220 million (€250 million) in 2020, up from £110 million (€125 million) in 2016 with UK broadcasters likely to capture nearly half of this value. Facebook and Google (YouTube) are still likely to capture a significant portion as the market grows.

In Germany the forecast is that CTV could generate €125 million revenues by 2020. The market in Italy is predicted to be worth €105 million by 2020 (from just €10 million in 2016).

In France addressable advertising regulations would have to be relaxed if the CTV ad market is to reach €240 million by 2020 as estimated by SpotX/MTM. Broadcasters and sales houses are petitioning for regulatory change via the trade union, SNPTV.

Alternative measures
The other factor that broadcasters can turn to their advantage is guaranteeing the placement of brands against appropriate content.

Ads automatically placed adjacent to extremist content on YouTube and other ‘unmoderated’ user-generated platforms since 2016 have caused the world’s biggest marketers like P&G and Unilever to push for a greater safety net, if not yet to significantly reduce their digital spend.

In the absence of an accepted metric to combine TV and digital a number of commercial, digital and pay TV stakeholders have developed their own systems.

In the U.S, Google has made its traditional TV inventory available via DoubleClick, allowing advertisers to buy linear TV spots programmatically. Discovery introduced its own ‘Total TV’ audience measurement around live events beginning with Eurosport’s coverage of the recent Winter Olympics in South Korea. Thinkbox offers planning tool IPA TouchPoints, intended as a stop gap in the absence of Dovetail; online advertiser’s body IAB Europe is working on an initiative which it hopes will make digital advertising more directly comparable with TV.

Elsewhere, Liberty Global – whose European assets include Virgin Media, Ireland’s commercial broadcaster TV3 and Belgium’s Telenet, is developing Liberty Insights, a database harvesting insights from its 24 million customers on advertising and programming to broadcasters within its stable.

“We are offering an alternative to Facebook and Google,” said Laurence Miall-d’Aout, VP, Data and Advanced Advertising, Liberty Global. “We cannot replace Nielsen and BARB. They still use very small panels which really tell you nothing about what people are watching. We think with our data we can compliment it.”

She adds, “A lot of brands are turning away from digital and we are pushing that money back to DTV.”

The industry is moving towards integration of advertising models for linear TV and digital video but the greatest challenge remains measurement.

The State of Mobile Video 2018

Streaming Media

Vodafone and Liberty play chess over a megamerger, 5G hunts for business, and AR makes ground over VR. Small devices will make big moves in the year ahead.

http://www.streamingmediaglobal.com/Articles/Editorial/Featured-Articles/The-State-of-Mobile-Video-2018-123812.aspx

Europe is the most highly penetrated mobile region in the world, with little room for subscriber growth. According to the GSMA, about 84 percent of Europe’s population subscribes to mobile services, a number forecast to grow, albeit sluggishly, to 86 percent by 2020.

Slowing subscriber growth is, though, being offset by rapid migration to 4G networks. 4G is expected to account for more than 60 percent of the total subs base by 2020 amid growing demand for data and as 4G network coverage increases. Indeed, the number of 4G connections overtook 3G connections in Europe for the first time in 2016. European mobile operator revenue is expected to top €146 billion by the end of 2020, according to the GSMA. By then, mobile technologies and services are expected to generate around €674 billion, or 3.9 percent of Europe’s GDP, as the region experiences strong growth in productivity brought about by continued adoption of M2M (machine-to-machine) technology and the increased digitisation of industry and services.

Globally, mobile data traffic is set to grow tenfold between 2016 and 2022, according to the “Ericsson Mobility Report” of November 2017, with video growing to 75 percent of the mobile data load in that time.

5G Trials Advance, but Success Is Not Guaranteed

A few dozen of the 800 operators around the world are actively involved in trials of the fifth generation of cellular networks. Great hope is being put in 5G as a transformative technology for everything from changing vehicles into driverless entertainment hubs to enabling remote surgery and building the fourth industrial revolution on the Internet of Things.

In Europe, Vodafone installed 10 Massive MIMO (multiple input and multiple output) base stations in Madrid and will install 60 base stations in Milan in 2018, covering 80 percent of the city by the end of the year, then the same number again in 2019. The operator is already working with hospitals, police, and railways to explore how drones or remote cameras could improve their services.

In Germany, Deutsche Telekom made a public 5G connection in Berlin and reported download speeds of 2Gbps at a latency of just 3 milliseconds (ms). That compares with an average latency of 50–60 ms for some of the best current souped-up 4G networks. Its demo included a live transmission of UHD and an augmented reality (AR) application.

Select London businesses and residents benefitted from a 5G trial, too. Arqiva tested the performance of Samsung base stations and reported downlink speeds of around 1Gbps. This level of performance would allow for the simultaneous streaming of more than 25 UHD 4K TV channels, according to Arqiva. It said the trial was of particular interest for parties looking to a future of ubiquitous UHD.

Arqiva shelved $2 billion plans to float on the stock exchange last November. It operates the UK’s broadcast TV network and most of the country’s radio transmitters—together with renting 8,000 sites on which mobile operators EE, Three, O2, and Vodafone install their own signalling equipment. The company, which the Financial Times calculates made a net loss of £900 million over the last 3 years, is betting that 5G will power huge growth in demand for mobile video streaming and eventually replace DTT in the home.

EE is backing this too. The mobile arm of UHD sports broadcaster BT is looking for media and entertainment applications that would suit the power of 5G, such as live virtual reality streams and multi-angle, viewer-selectable switching of live sports. It claimed speeds of 2.8Gbps using a 100 MHz slice of 3.5 GHz spectrum in its 2017 lab tests, using a 5G baseband unit from Huawei and another Massive MIMO antenna.

With the first commercial 5G networks in Europe due to be switched on by 2020, the GSMA forecasts that there will be 214 million 5G connections in Europe by 2025.

Nonetheless, alarms continue to ring about the lack of a business case and incentives to invest. The CEO of BT Group, Gavin Patterson told Huawei’s Global Mobile Broadband Forum in November: “If you look from 3G to 4G, the case was underpinned by going from what was a pretty poor internet experience to one which was really opening up the potential of the internet to mobile. And we haven’t found that for 5G.,” Patterson said. He acknowledged that the performance would be better, “but ultimately, as carriers we’ve got to make a significant investment and put the capex down...”

At the same event, Vodafone Group CTO Johan Wibergh stressed, “The increased efficiency ... from Massive MIMO and radio ... means 5G is as much as ten times more cost-efficient than 4G,” adding that he doesn’t understand why industry members are not talking about that more.

Deploying 5G faster networks is costly—estimated by Deloitte at around £50 billion ($63.1 billion) for rollout in the EU. The analyst says availability of higher speeds “will likely reveal uses we cannot currently imagine with multiple ‘killer apps’.” In the US, 4G is estimated to have accounted for some $150 billion in economic growth and more than 750,000 jobs.

In any case, Europe and the US are likely to be leapfrogged by Asia. The GSMA forecast that 5G connections in China will reach 428 million by 2025, or 39 percent of the 1.1 billion global 5G connections expected by that point.

Part of the reason for this is the large-scale public showcases of 5G built around successive Asian Olympic games, helping Asian telcos convince financial teams to invest. This starts in South Korea in February with a great opportunity for operator KT to show off 5G, moves to Tokyo in summer 2020, and then to Beijing in 2022 for the next Winter Olympics.

Megamerger On the Cards

2017 saw Vodafone further its ambitious plans to combine its European mobile networks with ultra-fast broadband and offer bundles of wireless and fixed-line services, including TV. It plans to pump €2 billion into routing fibre-optic lines to 13.7 million homes and businesses in Germany—its biggest market—by the end of 2021.

The mobile network operator previously invested in fixed-line broadband networks with Portugal Telecom and Orange in Spain and now has its eye on the UK.

Partnered with network builder CityFibre, it aims to connect 5 million UK homes and businesses. That would represent a fifth of the local market and a considerable improvement on its current position of around 245,000 broadband subscribers on copper lines rented from dominant UK broadband infrastructure provider Openreach. CityFibre’s new fibre-optic lines will offer speeds of up to 1Gbps, more than 10 times faster than on the Openreach network.

Vodafone could also extend its reach in partnership with Openreach, a BT subsidiary from which BT was forced to separate by UK regulator Ofcom in November. Either way, a major investment in full fibre by Vodafone would signal “a radical shift” in Britain’s telecoms industry according to The Telegraph.

Notably, a reinvigorated Vodafone would present Liberty Global-owned Virgin Media with a serious rival. To complicate matters, Liberty and Vodafone continue to manoeuvre for a $175 billion (£131 billion) megamerger which would see the two combine fixed-line and mobile assets across Europe.

Liberty’s potential sale of UPC Switzerland and UPC Austria is seen as prelude to a wider deal. In 2016, the companies presented a proof as to how a bigger combination would work when Liberty-owned Ziggo joint-ventured with Vodafone in the Netherlands.

Premium Content Streams on Mobile, but TV Remains Dominant

According to Cisco, video accounts for well over half of all mobile traffic. That figure is set to rise as network speeds upgrade (4G to 5G), handset reception technology develops, and the volume of premium content available on devices increases. Indeed, Ooyala reports that content greater than 20 minutes in length now represents the majority of time spent watching video across all screen sizes, at 63 percent. Quality of video is up, too. Almost 40 percent of mobile video traffic globally is now HD quality, found traffic management specialist Openwave Mobility. According to the study, HD was just 5.7 percent of mobile video traffic 4 years ago, and is expected to surpass the 50 percent threshold by the end of 2018.

Ooyala advised content providers to tailor their strategy around mobile. Significant deals showed old media tying the knot with social media and developing bespoke short-form content.

In 2016, Viacom and Turner, for example, partnered with Snapchat parent company Snap Inc. to create original content for Snapchat’s Discover section. In Viacom’s case, the agreement also grants Viacom the right to sell Snapchat’s US-owned ad inventory. Discovery’s partnership with Snap will see some user-generated and behind-the-scenes content from the Winter Olympics in South Korea published to Snapchat users across Europe.

However, this activity, which places mobile first, needs setting in the context of Nielsen’s October 2017 revelation that 89 percent of video streaming takes place on TVs and not on a smartphone, PC, or tablet.

“Most people prefer to watch TV on the big screen with better sound and a true lean-back experience,” noted Andrew Ferrone, vice president of pay TV, Roku. “The big screen matters to millennials too. Streaming provides consumers with choice and control, a consumer benefit that appeals to many.”

Streaming is a part of, and not a replacement for, the traditional TV experience. “Many operators do offer a TV Everywhere solution that is available on mobile devices and web browsers, which is a perfect solution for the 10 percent of consumers that watch TV on mobile devices,” added Ferrone.

This is especially the case with 4K content streamed to the home and displayed on a TV. Some 35 percent of TVs sold globally in 2017 were 4K UHD, a total of 79 million, bringing total penetration to 8 percent according to Futuresource data. This is expected to reach a global average of 21 percent by 2021. The UHD streaming device market is also on the rise, with worldwide shipments of 19.5 million expected through 2017 and accounting for 36 percent of all media streamers sold through 2017.

Anecdotal evidence reported by Ampere suggests that achieving the full 4K environment requires no small amount of expertise on the part of the consumer, and even those with all the kit may not actually be experiencing 4K if one aspect or component is set up incorrectly.

“There are the usual claims of 4K availability via pay TV operators and OTT SVOD operators, but realistically these are marketing claims and produce a largely sub-par experience both in terms of the resolution actually received (owing again to file sizes) and volume of content,” Richard Cooper, research director, Ampere, told Streaming Media. “The whole in-home 4K experience is very dependent on having a fully compatible setup from end to end.”

Dynamic range is considered by many to matter more to the perceptual quality of an image than resolution. Even here, rollout is not fast. Just 7 percent of production companies are being asked to deliver in HDR despite HD HDR providing an increased quality of picture with just a small increase in bandwidth requirement, said Futuresource analyst Tristan Veale in the same article. “However, HDR is a more difficult consumer message to convey, and therefore monetise, than 4K resolution.”

It may require the impetus of an all-UHD/HDR FIFA World Cup, which will be produced and delivered live from Russia this summer, to kick-start enthusiasm for the format and for the necessary upgrades to internet connections into the home.

AR Needs Killer Content

There are those predicting that 2018 will be the year of augmented reality (AR), with Silicon Valley’s tech giants pushing product into the mainstream.

Facebook sees AR as a huge new communications platform, and launched its Camera Effects Platform for AR developers in February. Google has been experimenting with products like Google Glass and its Tango platform, which uses depth sensing to map environments from smartphones.

Apple’s ARKit, announced in June, means developers can create AR apps for the 700-plus million iPhone users already in the market. ARKit uses the iPhone or iPad’s camera and motion sensors to find points in the environment, then tracks them as the device moves. It can “pin” objects to one point, changing the scale and perspective. It can also locate flat surfaces, which is great for putting digital props on a floor or table.

Microsoft is also expanding the reach of its HoloLens headset with its mixed reality (MR) Windows software. This includes inputs from motion controllers and natural human inputs such as gaze, voice, and gestures.

Rather than just adding artificial elements to a real scene as with AR, or creating a completely artificial environment as with virtual reality, MR places all or parts of reality into an environment that mimics the real world in real time.

The Future Group and FremantleMedia have produced one of the first MR entertainment formats, Lost in Time, which is currently being adapted for a Middle East audience.

Aside from HoloLens, brands launching MR headsets based on MR for Windows include Acer, Dell, HP, Lenovo, and Samsung. “We are standing at the threshold of the next revolution in computing,” wrote Alex Kipman, Technical Fellow at Microsoft, in an October 2017 blog post. “A revolution where computers empower us to expand our capabilities and transcend time, space, and devices. ... With mixed reality, our ideas move beyond the boundaries ... of screens, and beyond the boundaries of description. This is the fundamental promise of mixed reality. The barrier that exists between our physical and digital worlds will disappear.”

All that’s needed is a killer piece of content for AR or MR to go viral.

Live VR Takes a Back Seat

The high hopes the industry had of VR enjoying quick widespread adoption at the start of the year look to have been overly optimistic. As 2017 progressed, the industry adopted a more conservative viewpoint with regard to the speed of uptake.

Futuresource Consulting, in its latest “VR Quarterly Tracker,” put this down to lower-than-anticipated device sales, but also says the creative community has lagged behind in its ability to generate compelling content.

“A key issue for the industry is the lack of killer applications for VR that are essential to drive consumer adoption, and this has proved to be a major limiting factor that has impacted growth,” said Michael Boreham, the report’s co-author. “The slow rate of consumer adoption of VR hardware has also impacted on the content community, with games and video publishers being wary of funding VR productions until the installed base of hardware has reached a level where they can guarantee a healthy return on investment.”

Sports producers remain keen to tap the potential of the medium, but have largely failed to commercialise it. Perhaps that’s to be expected while the technical complexity and new editorial grammar are worked out.

That was certainly the case at Europe’s most impressive live VR production to date, when BT Sport covered the Union of European Football Associations (UEFA) Champions League final from Cardiff in 4K VR using 12 rigs. While the operator will have learned a lot of lessons about live VR production and had planned to stream regular English Premier League matches in 360 degrees during the 2017–18 season, it has not produced another since.

Nokia’s sudden decision in October to exit VR and end development of the OZO camera and stitching system used by the broadcaster was also a setback. The OZO seemed to have become the go-to camera of choice for live VR, used by UEFA’s production partner Deltatre, among others, but it seems that despite slashing the initial launch price of €55,000 to €34,000, and with millions of Euros invested, Nokia still couldn’t see a way to break even.

Live VR is far from over, though. Sky Sports continued to dabble in trials of largely short-form recorded content, including some in partnership with boxer Anthony Joshua. And the Olympic Broadcasting Services will capture 50 hours of Winter Olympics action using rigs and processing from Intel in a feed bought by NBCU. The chip maker is also behind production of regular NBA games for distribution over a Turner Sports app, starting with the NBA All-Star Game February 20.

Live VR will return. The BBC continues to push 360° video experiences, although mostly in recorded content around drama and documentaries. BBC Earth Productions is reportedly planning to explore “haptic” (including touch with sight and hearing) VR and AR experiences.

Discovery has earmarked VR for Olympics coverage in 2020 and before that, motorsport’s Formula E (in which Discovery has a minority stake) broadcasters are plotting AR and VR innovation.

“[VR] augmentation of the live event requires a robust video delivery connection that can cope with the bandwidth requirement, ensuring minimal latency and consistency of video relay,” said Simon Moorhead, Managing Director of outside broadcast production supplier NEP UK in an interview with the author for SVG Europe. “This is where the broadcaster is at the mercy of the viewers’ data connectivity or, more specifically, the ability of the internet service provider to super-serve this new broadcast medium.

“For these reasons, I see that the broadcasters need to feel confident in the delivery platform, the potential for mass consumption by the potential available audience, and their willingness to either pay for this enhanced experience or have their experience impinged with hard-coded advertising.”

NAB showcases the state of the industry

Rohde & Schwarz

The rate of technological change in the industry is unprecedented which is both a cause for alarm as well as excitement, both moods likely to be encapsulated at NAB this month.

Artificial Intelligence, for example, may be just at the start of its adoption curve but there are already multiple use cases designed to enhance the viewer's media consumption experience, automate production processes, and optimise delivery of content.

https://www.rohde-schwarz.com/uk/solutions/broadcast-media/always-on-blog/posts/3-18-nab-preview_232158.html

Exhibited at NAB, will be AI-influenced tools for audio to text transcription (closed captioning) potentially saving organisation’s time and money; for policing unmoderated content online; and network optimisation (traffic, compression, fault warnings and redundancy). There will be plenty of intelligence added to content management tools (such as automatically tagging video on ingest and recommending clips for producers to build to stories).

For all the technology’s potential, it is also important that we first understand what A.I can and cannot do and then consider when, where and how to deploy it. Indeed, it will only truly come into its own with faster processing speed.

On which note, the millisecond latency and faster than 1Gb per second throughput of freshly standardised cellular network 5G is forecast to reshape the creation, distribution and consumption of content.

360-degree video in 8K resolution is already being lined up for demonstration over a 5G network at the Tokyo Olympics in just two year’s time – something inconceivable with current technology. Other futuristic forms of media – such as capturing and displaying light fields (otherwise known as holograms) - will also be enabled by the 5G revolution.

It is Augmented Reality (AR), though, which marks the next big shift in immersive content because the potential user base is already far wider than that for VR headsets. Everyone is waiting for the killer app to explode the AR space. Perhaps there will be a clue waiting in Las Vegas.

The overriding topic of conversation on the show floor could well be the state of the equipment supply industry. The market is being squeezed by consolidation on one side (the Disney/Fox merger being the latest example) and commoditisation of product and services on the other, leaving media technology vendors under pressure to maintain a competitive edge.

The good news is that the door is still open for many of them. Most media technology users – 98% according to a recent IABM poll – still prefer best-of-breed solutions. In fact, customers are still looking for the dedication, support and flexibility provided by specialist suppliers. Large IT companies have a weaker interest in this as the broadcast and media sector represents a fraction of their overall business.

This in turn necessitates that vendors forge ‘creative collaborations’ with end users and third party ‘rivals’ and a more open approach to product interoperability than ever before.

At NAB, Rohde & Schwarz will demonstrate how collaboration and joint development can add real value to customer focussed solutions to many of today’s broadcast business challenges.

The maturation of SMPTE ST2110 will address many on-premise interoperability issues but it takes on quite a different character in the cloud because it’s software interoperability that’s the issue.

One example of solving this is the R&S Venice platform which has been re-developed as software over COTS (commercial off-the-shelf) hardware to empower users to transition their servers from an SDI environment to UHD and SMPTE 2110 IP easily, using all the inherent benefits of COTS hardware and virtualisation.

Additionally, as part of the AIMS NAB 2018 interoperability showcase, R&S will demonstrate the advanced PRISMON multiviewer running interoperable implementations of the latest drafts for SMPTE 2110 and AMWA IS-04 in a live environment.

Managing the change from SDI to IP, or the trend towards COTS hardware and virtualisation transition, in an economically viable way is the biggest challenge facing the industry today – both for customers and also for technology partners such as Rohde & Schwarz.

NAB is the chance to take stock.

The State of Live Video 2018

Streaming Media

Live keeps pay TV in the game; piracy and scalability issues dog streaming; remote production comes of age; and the battle over sports rights has barely begun.

http://www.streamingmediaglobal.com/Articles/Editorial/Featured-Articles/The-State-of-Live-Video-2018-123856.aspx

Growth of premium video is continuing apace across all devices and platforms, with viewers particularly embracing live digital content. The importance of user experience, TV-quality content and devices that allow “linear-style” viewing were also evident across the year.

According to a Cisco report, live video is quickly becoming the fastest-growing segment of internet video, and is expected to grow from just 3 percent of all internet video traffic in 2016 to about 13 percent by 2021.

“While VOD has been a dominant part of OTT video services, live video is now enjoying a renaissance in the online space,” Parks Associates’ senior director of research Brett Sappington said in an Ooyala press release.

While the growth of live video in Europe (up 12 percent on 2016) was slower than the 40 percent rise charted in the US, ad management vendor FreeWheel suggests “that broadcasters are becoming more willing to experiment with content type.”

Another piece of research, sponsored by Yospace and conducted by consultancy MTM, found that live event programming—including sports and reality TV—is playing a major role in the popularity of live, IP-delivered television, accounting for about 70 percent of simulcast viewing on broadcasters’ OTT video services in the UK. On a wider scale, live and linear TV accounts for 60 percent of total video viewing in the UK market.

“Live appears to be still alive in the digital era,” concluded consultants at Deloitte. “And it may always be the case that people use technology to enhance live consumption rather than avoid it.”

The demand for scheduled television was reflected in a slew of announcements:

• Amazon launched Amazon Channels, a suite of live TV channels featuring content from Eurosport, MGM, ITV, and others.
• Amazon beat Sky Sports to a £30 million, 5-year deal to broadcast ATP tennis tournaments outside of the Grand Slams from 2019 in the UK.
• Twitter signed 16 live-streaming deals, spanning concerts, sport and drama.
• YouTube offered several UEFA Champions League matches (and seems likely to launch premium service YouTube Red in Europe in 2018, though some predict the launch may not happen).

Looking to expand on its US live-sports inventory, which includes the broadcast of Major League Baseball games and Mexican soccer matches, Facebook bid $600 million and lost (to Star India, paying over $2.6 billion) the rights to air cricket’s Indian Premier League tournament, but its ambitions seem even bigger. It is pitching its new premium video service, Watch, as a destination for reality TV and live sports. Soft-launched in North America in the autumn and presumably destined for Europe in 2018, Watch is building on Facebook’s strong community-based networks.

“What is interesting is that community is built into sports,” Daniel Danker, Facebook’s product director, told an IBC 2017 audience. “It taps into fandom and national pride. We also see that when you can see comments alongside the game it gives a shared sense experience, knowing that others are connecting is what makes [the event] special.”

One billion people use Facebook Groups each month. “These are people who aren’t necessarily your friends, but you share a connection,” Danker explained. “Increasingly, there are groups built around video.”

There are widespread predictions that Facebook, Amazon, and Google will dramatically scale up their investments in live TV. In particular, the acquisition of rights to premium live events among these companies is expected to increase significantly.

And of those rights, none is larger in Europe than the EPL. The current 3-year deal that ends in 2019, for domestic coverage alone, is worth over £5 billion to the EPL, with Sky Sports retaining the lion’s share. Premiership football has been the bedrock of Sky’s growth in the UK, but whether it will have the stomach to fend off the ambitions of an Amazon or Discovery—which is in the process of reinventing itself as an online play—remains to be seen. The sealed-envelope bids for the next tranche of rights comes to a head in 2018.

Pay TV Fights Back

The consumer’s evergreen demand for live programming and a continuing desire to view it on the largest screen available—arguably with the best service—does, however, make the commercial prospects for operator-owned linear and live IP-delivered TV more positive than many predicated a couple of years back.

Operators can employ a number of lines of attack against social media network and OTT giants. Yospace, for example, thinks live programming still holds significant value, and that the untapped advertising potential of live IP-delivered TV “must be realised in the near future in order to counter the threat posed by major internet media companies.” It advocates introducing dynamic ad insertion.

A related route is to on-board third-party subscription video-on-demand (SVOD) services, and/or to offer more live linear services online, including developing apps and tools that allow consumers to experience content on displays other than the primary screen.

Pay TV providers, including Sky, Swisscom, and Vodafone, are already doing this. Vodafone, for example, offers HBO exclusively in Spain, carries Sky’s OTT offer on its platform in Italy, and partners with Netflix in territories including Spain and Italy.

Indeed, Vodafone conceives the conventional distinction between millennials as “cord nevers” and the older generation’s traditional pay TV inertia as misleading. “It’s more useful to think of the split along linear and nonlinear lines where live sport is essentially linear and makes sense on the larger screen,” says Nuno Sanches, group head of fixed product development.

Recent analysis by Ampere identified the two most valuable types of consumer that operators should be targeting. These included a sport-loving, high-spending category of people who predominantly watch scheduled viewing live or via DVR, referred to as “TV Traditionalists.”

Ampere recommends that the TV industry work toward an integrated user experience (UX) that encompasses traditional scheduled TV alongside apps and other services like catch-up TV.

Fox was faced with this scenario a couple of years ago, when it began to boil down its 17 network options to the five of today: Fox, FX, National Geographic, Fox Sports, and Fox News.

“Viewers still had to go to all sorts of different places to get Fox content—some is on Hulu, some on Netflix, others on a TV anywhere service,” explained Brian Sullivan, president and COO, Digital Consumer Group, Fox at IBC 2017. So the company began bringing all of that content back together into a single, branded space. “The aim is to marry the power of apps with the power of a TV experience—meaning full-screen video and simple navigation with machine learning capabilities for discovery.”

While consumers are getting the widest range and highest-quality content from drama and sports in this “golden age of TV,” the fragmented premium content offer of “skinny” operator bundles and SVOD is believed to be causing user frustration due to the time it costs them to find content.

A report by OC&C Strategy Consultants reveals that viewers feel overwhelmed by the number of services: “Even among under-35s, 40 percent of viewers agree that the amount of choice is confusing, and this increases to nearly 50 percent among over 55s.”

“The average user is confronted with myriad services from Netflix and linear broadcast to VOD services and YouTube,” says Anthony Smith-Chaigneau, senior director product marketing at UX software developer Nagra. “All of this combines to create a labyrinth of menus across multiple apps and services. Users need to be able to switch between these services effortlessly with a simple, uncluttered, and engaging interface that doesn’t overwhelm them with options. At the same time, user interfaces also need to create a bridge between content silos—searching for one particular piece of content shouldn’t entail accessing multiple apps.”

In turn, this is prompting a re-aggregation of content and services with pay TV operators that are well-placed to capitalise, even if it is unlikely that a super-aggregator will emerge. The genie is out of the bottle.

“Cost is now much more driven by the value of the experience and not by the volume of content,” says Jon Walkenhorst, CTO, Connected Home, Technicolor. “They are becoming their own primary curator, and there’s no turning back. Families may all gather together around a TV, but they will be consuming different content at the same time. In this world, anytime is prime time.”

IP Production Evolution

Germane to the future of much of the broadcast industry is the ratification of SMPTE standard 2110 for moving audio and video around as separate streams. The standard, which will be finalised this spring, should permit a greater take-up of IP infrastructure and interoperable equipment.

“Thanks to the SDI-to-IP bridging support provided by SMPTE ST 2110, broadcasters can take an incremental approach by building new islands of IP-centric operations while continuing to rely on legacy equipment elsewhere,” lobby group AIMS states in its 2017 report, “Guidelines to Preparing Broadcast Facilities for IP-Based Live TV Production.”

The AIMS agenda does not end with 2110. The latest objective provides a common means of identifying and registering devices across all workflows and locations based on the Network Media Open Specifications (NMOS) IS-04 developed by the Advanced Media Workflow Association.

As the industry get to grips with IP, a fundamental shift in production is emerging. In live outside broadcast this is notable in the ability to decentralise operations away from the venue with different production elements being contributed from diverse geographical locations. This can only be achieved where suitable guaranteed bandwidth of appropriate latency exists, but this capacity is improving year on year.

A report by the Digital Production Partnership (DPP) and Ooyala suggests that, by 2022, more than half of today’s video-production environments will recognise greater business benefits, efficiencies, and return on investment by adopting IP. Its survey included ITV, Sky, BBC, and Sony, and concluded that the gains would be made by companies adopting strategies around internet-first distribution, live streaming, single-camera shooting (companies accessing on-site footage via the cloud), media management, and cloud playout.

“The fact is, the move to IP has inherent benefits for many processes, but only specific environments will see the greatest benefits and highest returns today,” DPP managing director Mark Harrison said upon the report’s April 2017 release. “Within a few years, IP infrastructure may be essential in doing business because of the impact it is having across media companies and distribution.”

The mammoth broadcast trucks run by all the leading suppliers will travel to premium sports events for some time, in part because squeezing 4K UHD over IP contribution links is currently unreliable and expensive. What you may save on not sending crew to a venue is used up on connectivity.

Nonetheless, the BBC’s plan to cover an additional 1,000 hours of sport per year is predicated on the cost efficiencies of IP and remote production. It will stream live coverage of mostly niche sports like the British Basketball League, snowboarding, and Women’s Super League football to iPlayer and the BBC website using a streamlined production that, in some cases, will be a single camera controlled remotely via web browser.

“We are at the point of transition from a place where IP production is contributed back to base and passed through a relatively traditional gallery with comms and graphics and switching towards a scenario where all of that takes place in the cloud,” explained Tim Sargeant, one of the BBC team members leading the project.

The BBC’s long-term aim is to shift all of its live event production onto software and into the cloud for distribution online. This plays into the corporation’s short-term plan to “revamp” the iPlayer in a bid to compete better with OTT rivals. Indeed, BBC director general Tony Hall’s ambition is for iPlayer to become the top online TV destination in the UK within 3 years. iPlayer usage has plateaued, averaging around 8 million views a day for the second year running.

In announcing the sports plan, he admitted the BBC has been forced to evolve as a result of the budget for live sport being slashed. “[W]e will not stand still,” Hall wrote in the Guardian, “not if we want to meet the changing demands of sports fans, not if we want to remain relevant in the media’s most competitive marketplace.”

The BBC already requires individual registration to access iPlayer and says it will incorporate AI and voice recognition to personalise the user experience.

Live Streaming Struggles to Scale

Live online broadcasts require robust systems that can supply the necessary quality demanded by consumers, media companies, and content owners. However, some high-profile incidents in 2017 put question marks over the internet’s ability to scale.

These included the big-money fight between Conor McGregor and Floyd Mayweather at end of August with some pay-per-view patrons taking rights owner Showtime to court for not delivering on the HD quality it promised.

DAZN, the live and on-demand sport service owned by Perform Group, was afflicted by delayed feeds and service skipping when it launched into Canada in September on the back of exclusive rights to the NFL. The company had to extend an apology to subscribers and offer compensation, although further glitches have not been reported.

Also in September, Eurosport’s live stream of Bundesliga matches suffered similar issues, and Eurosport had to issue an apology to the league and offer to refund the pay-per-view fee.

That Eurosport is reliant on BAMTech, the poster child for direct-to-consumer streaming, illustrates the challenge of meeting consumer expectations for a broadcast-quality, always-on experience.

Eurosport parent Discovery will be hoping the issues are sorted ahead of demand for the Winter Olympics this February, which it promises will be the biggest online Olympics yet.

Disney, which paid $1.58 billion to acquire a 42 percent stake in BAMTech (bringing its majority to 75 percent) in September, will use it to launch an ESPN-branded, multi-sport video streaming service early 2018.

“A global show on the scale of a Super Bowl cannot be live streamed today to everyone online,” Charles Kraus, senior product marketing manager at Limelight Networks, told Streaming Media. “The internet would have to grow by an order of magnitude in capacity to support streaming for everyone.”

Kraus pinpointed the main issue as last-mile congestion, adding, “The average bandwidth in the US is 10Mbps, [and in] the UK [it’s] 20Mbps, but you need at least 30Mbps to deliver 4K. Even where 4K is advertised (by Netflix, Hulu) and people pay a premium for it, you never hear these providers state that the end-user’s ability to receive this will depend on your ISP network.”

According to Stuart Newton, VP strategy and business development at Ineoquest, checking video availability at multiple geographic locations will help in mitigating future brand damage, especially if the issue was not with the content provider.

“Having the data allows for negotiation with the CDN and access network providers—the worst possible situation is not knowing what to fix for the next major event,” says Newton, whose company was acquired by Telestream last March.

CDN technology will improve and bandwidth capacity will increase, but the traffic is likely to increase accordingly.

In Europe, Digital Video Broadcasting is working on an adaptive bitrate multicast protocol that can be deployed over managed networks and the public internet, and a standard is expected to be available this year.

The other key problem facing live streamers is latency. Net Insight tackles this with Sye, a solution for distributing synchronised live OTT with a fixed delay from the CDN into the cloud and out to the client’s device. The firm made a proof of concept of this in June, providing OTT viewing to fans of the Scandinavian Touring Car Championship event at Solvalla in partnership with Swedish production company StoryFire. Traffic was routed through a local ISP called IP-Only, with overflow streaming via Amazon Web Services, configured to handle 50,000 concurrent viewers.

Another solution is provided by Ooyala, which upgraded its managed Ooyala Live solution with 24/7 monitoring and high availability for multi-region auto-failover. It claims a 99.95 percent uptime for content provider video streams as a result.

Chicago start-up Phenix reckons its technology is good enough today to scale to multiple millions of viewers online. While most services are either HTTP Live Streaming or WebRTC, both of which trade scale for delay, Phenix says its platform offers less than half a second of latency and a potentially infinite number of concurrent users.

“We dream of streaming the Olympics opening ceremony to a billion people worldwide in real-time, a task that is not possible with other streaming technologies,” Stefan Birrer, co-founder and CEO told Streaming Media.

Piracy Moves to the Fore

Piracy is an unfortunate fact of life for the TV industry, but direct hacks into production servers became a worrisome trend last year. Netflix supplier Larson Studios had episodes of Orange Is the New Black stolen and released online in April, and Disney was subject to an alleged breach a month later as hackers sought to capitalise on industry panic. But it was the hack of Game of Thrones in August that sent Hollywood into overdrive.

Criminals threatened to leak scripts, including a detailed outline of the Season 7 finale and an image with the warning “Winter is Coming. HBO is Falling,” and they gained access to Time Warner employees’ Twitter feeds.

HBO resisted the $6 million bitcoin ransom and the material was leaked, but the show still recorded high live-viewing numbers and download figures that suggest that spoilers won’t deter fans from watching event television live to air.

However, the industry faces its biggest threat from illegal redistribution of live content, specifically sports. This was thrown into relief by August’s money match between Floyd Mayweather and Conor McGregor. This was watched illegally by close to 3 million viewers, security specialist Irdeto calculated. With Showtime charging $99 per view, that is an eye-watering loss of revenue.

The industry response is multi-layered, ranging from consumer education to law enforcement—the English Premier League struck a series of significant blows against the use of Kodi set-top boxes to view unlicensed streams.

With pirates using increasingly sophisticated and professional presentation techniques, the onus is also on online publishers to ensure content is delivered to a high standard. A good portion of potential pay-per-view customers for the Mayweather/McGregor fight were reportedly deterred by the service’s inability to complete their transactions on time.

Linear Drives OTT Subs

Subscription OTT services that are driven by linear streaming, as opposed to library catalogues, are the fastest growing segment of the online video market now according to Ovum. In November, it reported that subscription linear services (SLIN) already account for around 37 percent of the 4 million total OTT subs in France, 31 percent in the UK (of 13 million total OTT subs), and 28 percent of 7 million in Germany.

A subscription linear service is one that contains linear and on-demand content. The analyst firm believes this combination is more likely to be used as a substitute for traditional pay TV than subscription video-on-demand services, and that it will have increasing market impact.

The category includes entry-level linear OTT services from pay TV operators such as Canal Play; direct-to-consumer offers from traditional channel owners, such as HBO Now and services launched by rights-owners, usually for sport; and streamed games services like Twitch.

Ovum explained, “Many SLIN services offer first-run TV shows at the same time as traditional TV, especially live sports coverage and other premium content historically restricted to traditional broadcast TV windowing—and denied to SVOD providers such as Netflix until later release windows.”

Analyst Tony Gunnarsson told OTTtv World Summit attendees that there are several things to look out for going forward, including price pressure building against pay TV, the fate of sports rights, Netflix response to falling subs, and how Amazon develops its Amazon Channels service.

However, SLIN isn’t confined to pay TV. November saw Freeview, the UK’s digital terrestrial television platform, announce “Bundle Builder,” a recommendation of subscription packages that includes Sky’s NOW TV, to supplement free-to-air viewing. For a platform that was launched as the home of free TV, this was a dramatic acknowledgement that viewers of free TV also want access to SVOD. However, Freeview is still not available as a distinct online service.

“We can choose to become a footnote in the quarterly results of Apple or Amazon or we can strive for something better,” warned Jonathan Thompson, CEO, Digital UK, which is jointly owned by the BBC, ITV, Channel 4, and Arqiva, at the Outside the Box event in London. “Our industry needs to lead the charge and act together to strengthen rather than loosen the bonds on which our success was built. We must go faster and further than ever done before.”

Late in 2017, reports circulated that the BBC was weighing plans to introduce an SVOD service to replace BBC Store, the download-to-own service that announced its closing in May, just 18 months after launch.

The idea would be to offer a paid-for VOD catalogue of BBC programming via iPlayer after the 30-day catch-up window. This would put the BBC more in line with Netflix’s vast archive library.