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.
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.