New at NAB: The cloud gets crowded

IBC

NAB 2019: The cloud allows for revolutionary gains in speed, flexibility, and collaboration, with the industry on a fast track to deploying workflows with Google, Microsoft and Amazon. So it’s little wonder that NAB has been awash with new launches based on cloud technology.

https://www.ibc.org/delivery/new-at-nab-the-cloud-gets-crowded/3736.article

Video workflows for sports, news, film and entertainment are moving rapidly to the cloud and NAB was awash with ways to achieve it.

There are many benefits for doing so but Intel’s Lynn Comp summed it up best in a keynote delivered at NAB.

In future, she said, media will become a building block for a set of “intelligent visual experiences” that go way beyond content streaming to the TV. “We move from a world of passive consumption to something that is much more interactive and immersive. In addition to traditional media processing and delivery, the agile, flexible visual cloud encompasses workloads such as analytics, immersive media, cloud gaming and graphics.”

It’s no coincidence that Intel has termed its cloud service ‘visual cloud’ of which Comp is the general manager but her point is salient.

The intense competition for new SVOD services from AT&T, Disney and Apple versus incumbents Amazon and Netflix will shift from conventional high-end unscripted and drama shows into new immersive storytelling formats such as 360-degree and augmented reality. These will be produced in ever-more visually stunning cinematic ways with higher resolution, HDR and high frame rates.

Netflix’s burgeoning slate of nonlinear programming is a prime example. Bandersnatch should no longer be considered an experiment, more like a future of entertainment in which programming will be made and delivered in increasingly personalised, contextual and just-in-time ways.

And Cloud? It’s the only way to handle the massive increase in data.

The hosts
Google, Microsoft and Amazon were everywhere at NAB. You’d be hard pressed to find a vendor in storage, asset management, video acquisition, playout and more which does not have its kit plugged into one or more of them.

Google fielded John Honeycutt, formerly CTO of Discovery and now heading up Google Cloud as vice president of telecommunications, media and entertainment.

Honeycutt has been tasked with getting film studios, distributors, and telcos to shift their workflow to Google Cloud. MediaKind is one customer which has launched Cygnus 360º-as-a-Service for anyone wanting to process live 360º video at up to 8K resolution. “By integrating our products with Google Cloud, we are opening up production in the cloud to new global markets where cost and ease of integration are big factors in deciding which solution or product to choose,” said CEO Angel Ruiz.

Amazon is the biggest media player in this area with more than 60 companies on the NAB show floor demonstrating what they are doing with AWS. It offers facilities the ability to deploy a creative studio in the cloud for VFX, animation, and editing workloads. Machine Learning (Amazon ML) and AWS Elemental Media Services process sports content to extract metadata with activity and object detection for enhanced live sports coverage. Demonstrations at NAB incorporated automated highlight clipping and on-screen graphics creation.

Unlike Amazon and Google, Microsoft wants to be seen as a little more independent. “We’re not in the business of content creation or content ownership,” said Sudheer Sirivara, General Manager, Azure Media. “We want to provide platforms to help content creators and owners achieve more.”

Enhancements to Azure include a new cloud rendering service, content delivery network (CDN) optimisation and more AI capability umbrellaed under its Video Indexer.

Intel is the new kid on the block, using NAB to announce the Open Visual Cloud. Intel described this as an open source project with reference pipelines for CDN transcoding and video ad-insertion on launch with VR, interactive raytracing, and cloud gaming to come.

Storage, transcoding, transcription
Most media companies will come into contact with the Cloud first to accelerate storage capacity. We need to become familiar with terms like hot storage, which keeps media in the cloud ready to go in an instant. It’s like the term online for on-premise storage and is distinguished from a ‘cool’ storage tier (nearline) for material accessed less frequently. Archive is archive but this too is about being the best fit for the data centre.

Quantum claimed its most significant product launch in more than a decade with a new storage line based in the Cloud. Its F-Series of flash drives are run on Quantum’s own Cloud Storage Platform to support performance-intensive workloads like UHD editing and rendering. It comes with Quantum’s file system StorNext which offers things like data protection and an automated tiering of data to optimise storage capacity.

XenData teamed up with Wasabi to offer a hybrid cloud archive service. The joint Cloud File Storage Service is operated by Wasabi, a cloud provider that sells storage services compatible with Amazon’s S3 storage platform, with pricing from $0.01 per GB per month based only on the volume of data stored in the cloud and no charges for uploads or downloads.

Content providers and posthouse have a choice to make when it comes to investing in storage options: expand more on premises capacity; offload everything to the cloud or maintain a hybrid of the two. The latter is seen by many as a sensible halfway house in which content can be managed locally or by a cloud provider of choice, with users in control of what content should be stored where.

 “Traditional storage platforms can’t meet the scale, intelligence or cost efficiencies needed for today’s media workflows,” reckons Jon Toor, CMO at storage vendor Cloudian. It has paired with Telestream to overcome this obstacle by plugging Telestream Vantage’s automated metadata tagging, search and analysis tools into the Cloudian HyperStore platform. Vantage provides services such as auto-transcription and captioning, keyword analysis, and QC automation.

Broadcast metadata and transcription specialist Take 1 launched Take 1 Cloud, for video transcription workflows. The standard features of this product enable broadcast and production companies to use a web-based interface to transfer video assets, add comments or instructions for specific projects or media files, monitor the status of work in progress and retrieve completed outputs.

For clients with ongoing contracts or high volumes of work, the platform’s features automate large parts of the workflow. It can automatically scan and transcode clients’ video projects as soon as post is completed and, when transcription or localisation services are requested for these projects, automatically trigger the associated tasks.

Broadcast engineering stalwart Evertz has launched what it described as a collection of on-demand and ‘pay-as-you-go’ cloud native services for broadcast customers. Evertz.iO is a serverless system (at least in so far as the servers are virtualised in the cloud) and will offer services such as technical metadata generation, content moderation, audio transcription, scene detection and text detection applications, the company explained. It has partnered with Interra System to offer automated QC in the cloud.

Production in the Cloud
Production in the cloud is still in its infancy, yet new capabilities are quickly evolving out of this technology.

Avid NEXIS Cloudspaces, for example, effectively extends local offline storage into the cloud using Azure. “Instead of resorting to NAS or external drives when budgets are tight, Avid NEXIS Cloudspaces offers a way to offload projects and media not currently in production,” explained Jeff Rosica, Avid CEO.

Forbidden Technologies has also added Microsoft Azure to its own cloud video platform Blackbird, a move which is said to increase the speed of cloud workflows such as viewing, clipping and publishing video online. Among companies already using Blackbird on Azure is Deltatre, which uses it to accelerate delivery of live and on-demand video highlights to sports fans.

Collaboration across geographic boundaries is one benefit of a cloud-based approach. Intelligence in the form of metadata-aware or AI-driven media asset management software can be layered on top. Storage and MAM vendors have been tying the knot to offer such a combined product.

iXsystems, for example, has partnered with media asset management specialist Cantemo to offer iXsystems’ storage line running with Cantemo’s cloud video hub, Iconik; Forbidden Technologies has allied its Blackbird cloud video platform with Xytech’s facilities management software.

“Bringing talent to known creative hubs such as Los Angeles, New York or London’s Soho is not a cost-effective cure for facilities,” said Andy Liebman, founder, and CEO, EditShare. “They need to be able to [gain access to] talent wherever they are located and, if need be, bring them into the creative process remotely.” EditShare’s Flow MAM targets this problem and boasts cloud-based workflows in Azure, Google, S3, Wasabi, and Backblaze.

Wireless links developer Dejero was showing the ability to bring AI to live content by hooking IP video links into Microsoft Azure via its video encoders and receivers. Once in Azure, metadata tagging, facial recognition, and speech-to-text functionality is enabled using Microsoft’s Media Services Video Indexer, with the result spat out to newsrooms keen to introduce automation to save time and reduce costs.

Sony thinks news organisations, and ENG crews in particular, are ready to move to the cloud. It is offering its Ci cloud processing platform and XDCAM Air content acquisition tool. Content can now be transferred via wireless transmission directly out of the camera into Ci. Other new features include algorithms for object recognition and speech-to-text technology to help eliminate manual logging and transcription processes.

Sony has also developed a mobile app called XDCAM Pocket that “turns any phone into a cloud-ready XDCAM camcorder”. With it, users can stream content shot with smartphones back to base over mobile networks.

Playout in the cloud
Broadcasters are shifting to IP-based workflows and embracing the cloud for full scale channel operation.

“Broadcasters at NAB have a particular interest in the ways cloud virtualisation models can help them pursue new avenues in a ‘test-bed’ environment,” says Kris Barker, Head of Product Development, Satellite & Media at Arqiva. “They will explore these future cloud-based systems, looking for the virtualisation services that offer the flexibility to rollout new channels quickly and affordably, and the scalability to pull them down when those habits shift.”

Qvest Media has new range of cloud package for live event production, post production, archiving, disaster recovery or playout. Qvest.Cloud, for example, is for companies that want to efficiently orchestrate, manage and monitor their media technology, either on-premise, with a single cloud provider, in a multi-cloud environment, or using a hybrid model.

M2A Media used NAB to discuss Dynamic Content Insertion, a development based on public cloud technology that allows live event streaming content to be localised without the need to run multiple local playout systems.

Telestream believes that currently, service providers and content aggregators are turning business away due to not being able to create channels quickly for short-term events. Its Channel-as-a-Service Optiq collapses months of installation and preparation to minutes. One scenario sees content providers that want to have the choice of which cloud provider to use: many do not want to be tied to a single provider or want to migrate away from or de-risk their current provider, but simply do not have the choice. The intention is that OptiQ will support most major cloud providers, in addition to on-premise data centres at a later stage.

AV with Chinese characteristics

AV Magazine

In 2022, Beijing is set to become the first city in the world to have hosted both the summer and winter editions of the Olympic Games. The games will be held in February when the city’s average temperature is well above freezing. Not even the nearby Yanshan Mountains are expected to have enough snow. Previous Olympics in Sochi and PyeongChang augmented the real thing with man-made flakes but China will fulfil its vision of a ‘Joyful Rendezvous upon Pure Ice and Snow’ with more fake stuff than any event before it.

https://www.avinteractive.com/features/territory-features/av-chinese-characteristics-08-04-2019/

You can take that as symbolic of the ‘can do’ attitude of a state transforming itself and the global economy (along with the planet’s climate) with the most ambitious manufacturing programme the world has ever seen.

A recent downturn in growth and an accumulation of debt (running 254 per cent in 2017 according to the IMF), may be unnerving some economists but has hardly put a brake on AV investment.

“We’re seeing explosive growth in the pro AV market across China,” reports Robert Stacy, Asia Pacific GM at AJA Video Systems.

According to the 2018 AV Industry Outlook and Trends Analysis summary by AVIXA, the local industry will be worth U$230 million by 2023.

“The AV sector is very progressive and has grown substantially over the last decade,” says Ellen Shi, marketing manager for China at visualisation products vendor, disguise.

Growth is being driven by a number of factors including mega-scale infrastructure projects; cultural changes in education and entertainment; the rise of esports and wireless 5G; and a continued evolution of smartphones and the internet.

“All of these developments are setting the stage for new opportunities, while at the same time encouraging industries to embrace audio and video, and to upgrade from traditional, legacy mediums to digital,” Stacy says.

Brandi Zhu, country manager for Kramer Electronics, says the pro AV boom in China began about 10 years ago when a majority of AV solutions were foreign brands. “Now, there are more and more Chinese brands which have grown fast and become strong brands in the past few years. The Chinese market is very diverse now, and the competition is also very fierce. To remain competitive in this market, a company has to develop various new products aggressively to match multiple market needs.”

Market preconceptions
Two preconceptions tend to dominate ideas of doing business in China. That it’s a price driven market with local brands likely to undercut foreign imports; and that there’s a necessity for overseas firms to actively collaborate with a Chinese one on the ground.

Michael Austin, director of sales (APAC) at Datapath, says Chinese customers have a ‘good enough’ attitude towards products and solutions. “They tend to be primarily interested in whether a solution works ‘well enough’ and can meet the primary technical requirements, rather than whether there are additional features and functions that could improve usability or simplify solution setup. That said, there is certainly a smaller number of high-end projects where customers demand the best regardless of country of origin.”

Foreign AV firms are likely to struggle to compete on price with local products that can, at a basic level, accomplish some of the same technical tasks.

“There is usually openness towards foreign products, but the actual interest level and likelihood of buying will depend significantly on whether there are any acceptable or comparable local alternatives,” Austin says. “It is essential to identify your product’s unique capabilities, distinguish between those that attract interest rather than being deemed ‘beyond what is good enough and therefore just adding cost over local solutions’, and then actively promote the former,” advises Austin.

In most cases non-Chinese pro-AV companies are achieving “small to medium-sized business” in China, he reports, through distribution or through small local teams working with distribution and/or system integrators. “Investing in a local team essentially requires joint investment with a local Chinese company,” he adds.

“Naturally we are keen to promote our own brand, but most of what we broadly categorise as Command & Control’ – but can include utilities, telecommunications – are government projects. In some cases the videowall controller effectively must be ‘made in China’.”

Local vs imported product
Most observers agree that it’s a fiercely competitive landscape. “Consequently, it is important to innovate, remain price competitive and ensure you provide excellent support,” says Stacy.

That sound advice is not necessarily unique to China, of course. Another truism common to most markets is that the smaller the technical gap between local products and imported ones, the more that local support could become an issue.

“Even if a potential customer likes your product, they may select a local competitor with a less attractive product simply because there are more staff available for remote or on-site support,” says Austin. “Ensuring your distribution partners, OEM customers, and/or local team has adequate technical support expertise, and that they can directly provide this support directly and/or train their downstream partners in turn, is essential to ensuring end customers reach the necessary comfort level in buying your product.”

Kramer entered the China market a decade ago and has its own direct branch with sales and technical teams in the country. AJA’s strategy involves a strong distribution channel and reseller network, along with a social media presence on platforms, such as Weibo. Disguise opened a Shanghai office last year and has a reseller partner in Beijing. It also reaches customers through WeChat, a local language website, user manuals, support, and training.

“We’ve also seen the pro AV market, including major companies within that space, expand rapidly because of the increasing spending power and rising numbers of young consumers,” says Shi. “Gen Z have more spending power, are early adopters and keen learners. Social media is raising the demand for visually impactful entertainment, as more immersive entertainment experiences are gaining attention on social media sites.”

Disguise has supported projects including an Omega brand event, Hermes projection mapping and Jessie J concert touring as well as events at the Nanjing Opera and the National Games of China.

AJA sees similar growth in live events. “If the market seemed limited to government-based projects, recently we’ve seen major growth across all sectors as more streaming platforms – such as Tik Tok, Kuaishou, QiY and Youku – have come online,” says Stacy. “More sophisticated raster sizes, frame rates and deep colour workflows, including HDR, have become highly sought after for live events prompting greater demand for low latency signal connectivity.”

Mega-city AV
Unsurprisingly, most of the large, tier one system integrators are based in Shanghai, Beijing and Guangzhou because many of the large government projects for broadcasting, utilities and so on are driven from these locations. Meanwhile, the LED industry is centralised in Shenzhen, the ‘Silicon Valley’ of the global LED industry. Among them Chainzone, Novastar, Yes Tech, Absen, Unilumin Group and Leyard.

“These LED companies have become better and better at marketing their LED panels in overseas markets,” notes Austin.

Many of the most recognised Chinese technology brands such as Huawei, Tencent and ZTI also have their global headquarters in Shenzhen, “providing a large talent pool of trained engineers and sales professionals,” says Alex Couzins, head of brand and marketing, Absen.

Provincial city growth
Provincial capitals don’t miss out though. Chengdu, Hangzhou and Nanjing exhibit fast economic growth and increasing incomes, which means AV growth too.
“Even the most remote regions are rapidly expanding in the pro AV sector, with more access to innovative technology due to an increase in entertainment venues being built in new cities with an aim to bring multiple populations together,” reports Shi.

Command and control
National security is an important concern in China. Datapath expects the overall pro AV market to grow steadily, highlighting city surveillance projects that involve massive numbers of IP cameras. “Recently China has been placing more effort on – with some success – exporting such solutions to markets outside of China,” Austin says.

For the government and security market, policies have a significant impact on demand, reports Zhu. “The government wants to support Chinese brands, so the proportion of domestic equipment used is also growing substantially.”

For the business and corporate vertical market, she reports that customers prefer AV solutions to be “simple to configure, efficiently serviced over its lifecycle and easily managed by software.”

This year alone some 35 theme parks will open in the country, according to Zhu. “China is becoming the world’s largest theme park market. Hotels (often adjacent to theme parks) are another huge opportunity market for the pro AV industry.”

Absen spies demand for e-gaming. Its LEDs were used to create a four-sided LED display for the finale of esports tournament G·League 2018 which took place in Shanghai this January. Each side measured 16m × 9m, hung 20m above the floor and were the biggest yet for a tournament in China. The displays were used for livestreaming the game and for enhancing the fan experience.

Large-scale infrastructure projects continue to consume AV technology across the country to keep up with the explosive growth of China’s megacities, and the impact this has on the city’s energy, transportation and emergency services requirements. Couzins, for example, reports “a big spike in demand for Smart City control and command centres”.

A good example is the Longgang Operation Centre in Shenzhen, allegedly the world’s largest curved narrow pixel pitch LED screen “and one of the most technologically advanced control rooms,” he says. With a record-breaking 103 million pixels covering a 167 sq m surface area and a pixel pitch of 1.2mm, this LED videowall has the highest pixel density ever achieved (at the time of installation).

“This reinforces China’s position as a market leader, never afraid to employ or invest in the latest AV technology to achieve or meet a specific market need,” Couzins asserts.

The newly established Xiong’an New District is another example. It’s a top-down, government initiated city-building project that will see a high concentration of AV activities in the new region.

“The establishment of the Greater Bay Area in the south (Guangdong province, Hong Kong, and Macau) will see heavier investment on AI-powered technologies that will be applied to the smart city system installed in regional infrastructure,” reports Shi.

The next milestone will be the 2022 Olympics which builds from the legacy of 2008 with the Water Cube set to stage curling events, the National Indoor Stadium used for ice hockey, and the Opening and Closing ceremonies scheduled to once again take place at the Bird’s Nest.

As a result, the host budget is a relatively modest $3.9bn but the event “will certainly impact activities related to facilities throughout Beijing,” says Zhu.
A new high-speed railway, for example, will cut travel time from Beijing to Yanqing to 20 minutes, and from Beijing to Zhangjiakou to 50 minutes.
Both are resorts for alpine events and the line is due to be completed this year.

Netflix original: Inside Netflix’s post-production operation

IBC

From interactive episodes of Black Mirror to Bear Grylls’ latest series, Netflix’s post-production operation and supply chain is responsible for servicing the insatiable appetite for original content that will see it deliver more than 1,000 branded shows this year.

https://www.ibc.org/production/netflix-original-inside-netflixs-post-production-operation/3720.article

The Netflix supply chain, which underpins its rapid growth, is set to become even more integral to everything from editorial to user experience as it attempts to become the most innovative content creator on the planet.

“Where companies like Netflix are producing content at unprecedented levels of complexity, quality and velocity, we need to rethink what post is as a creative function,” Sean Cooney, Netflix director, Worldwide Post Production tells IBC365.

“We’re at the beginning of experimentation with many different formats and technologies and many new ways an audience can enjoy our content. We want to find ways to express stories that are not constrained in one traditional framework or dictated by the limitations of technology.”

It all points to an early stage integration of post processes that is going to be increasingly necessary for Netflix continued success.

“We are at a pivotal time in our industry where we stand at the end of the era dominated by the impact, legacy and elegance of that hundred plus year old technology called film and the evolution of what we think of as ‘video,’” says, Leon Silverman, director, Post Operations and Creative Services. “What is really interesting about a company like Netflix is that its culture comes as much from Silicon Valley as from Hollywood. It has a deep affinity for creating entertainment and for technology innovation.”

Silverman has spent the past decade at Disney, where he built its in-houseeditorial, sound and digital media operations team and infrastructure before joining Netflix in February

“The fact is, I wasn’t looking for a new job, but I was looking for “what’s next,” says the veteran who also spent more than a quarter of a century at former Kodak-owned facility Laser Pacific (now part of Technicolor) leaving as president. He was a founder and former president of trade body Hollywood Professional Association where he continues to serve on the organisation’s board of directors.

“Hollywood has always been a meeting place for art and the technical sciences, but these have been siloed and segregated in many parts of the traditional system. In some ways, moving to Netflix is a culmination of everything I have been trying to achieve throughout my career. Its ethos is about the intersection of technology and creativity in order to innovate new forms of storytelling. Netflix has the resources, the vision and the talent to align these goals.”

Pointedly, Silverman adds: “I know how hard it is to get the people, resources and freedom to create innovation in big companies. I’ve worked with many brilliant people in my career, but my Netflix colleagues have a level of intellect and smarts, where they don’t make it about themselves. This culture is all about the freedom and responsibility to drive impactful results.”

Global operation
Netflix global post operation is in Los Angeles, where it employs the majority of its 275 person staff. Cooney explains that this comprises teams that manage shows from a budgetary, scheduling and creative standpoint together with technical and engineering teams that are advancing imaging and sound and user design “to create next generation immersive entertainment.”

Forty-five post-production staff are currently stationed in international post hubs including London and Amsterdam but with regional content increasingly important to the growth of the company, this number is set to grow and with it the complexity of Netflix’s post-production operation. The aim is to streamline core functions like localisation, QC, asset management and archive while increasing output from Asia, Latin America and Europe.

“Every title must go through that pipeline while on-the-ground management of the craft functions on shows such as editorial and finishing happens remotely and under the management of partners, freelance creatives and third-party vendors,” explains Cooney. “One of the challenges is making sure that the talent we work with feel they are creatively supported even while we operate on a such a large scale. We want to continue to provide a boutique experience even as we expand.”

Those aren’t just platitudes. Netflix does receive positive reviews from showrunners, directors, editors and cinematographers for the creative space it gives them. There’s recognition, too, of the importance of existing relationships with dozens of third-party post houses, freelance artists and tech vendors.

“Netflix has spent a lot of time cultivating deep relationships in the post community but as we get more and more involved in upstream production we want to focus on streamlining handoffs from the creative side of production to content finishing, localisation and delivery to our service,” says Silverman.

The use of the cloud to connect globally located creatives is a part of the discussion but there’s also an emphasis on connecting this ecosystem to the physical spaces where creative work is done. “We have a need to be present where creatives are located - whether that’s New York, Singapore, Brazil, Berlin or Mumbai and we need to take as much friction out of the process as possible,” Cooney says.

Format experimentation
While this makes sense from a business point of view, there’s a creative intent too. Bandersnatch, the breakthrough interactive drama from the Black Mirror team, could not have been realised without close collaboration from editorial all the way to user interface design.

“We developed special technology to enable audience interaction but that had to work in concert with our engineering and product teams and with editorial and post teams,” Cooney says. “This involved multiple departments working to create a unique end-to-end experience and figuring out how the branching of storylines can work. It meant the user interface guys talking with [Charlie Brooker] about the script and with every department in between that touches the content.”

Netflix’s investment reportedly includes ‘state tracking’ which logs the choices viewers make as they watch the Bandersnatch episode. New technology also enables the narrative branches to load without any lags and a writing tool called Branch Manager suitable for multiple choice scripts.

There are plans to explore other genre including romantic comedy, in nonlinear fashion but next up is live-action interactive factual You vs. Wild. Debuting April 10 and fronted by survival expert Bear Grylls, viewers will apparently have the power to control which decision Grylls makes as he climbs mountains and enters jungles.

There are plans for more nonlinear drama as well as experiments with just about every cutting-edge media and technique from VR to virtual production. “We have teams exploring virtual production just as we are interested in experimenting with every intersection where technology meets creativity to innovate new formats spanning film, TV and immersive media,” Cooney says.

In doing so a new role is envisioned for post, one that collapses the traditional boundaries separating it from production. It’s an idea that has been envisioned for years but Netflix may have the resources and gung-ho attitude to finally make it happen.

“We are at a time now where the very notion of a serial progression from content inception to production to editorial then finish to distribution is anachronistic,” Silverman says. “’Post’ is not ‘after’ anything as much as it has become the underlying fabric of content creation, production and distribution. As we see more synthetic content and nonlinear content such as Bandersnatch there’s more than a realisation that post is integral to the greenlight process.”

He adds, “It would be great to have the ability to rethink, reset, recharge and reinvent large parts of our industry to create better colour, editorial, VFX and finishing pipelines and essentially create a cloud-based creative supply chain connected and integrated fully with the creative and physical places all over the globe where content is made. This will take real work and a lot of dialogue to move our industry forward, but the fact is, if there is any organisation or group of people anywhere that can bring content creators together with creative technology innovation in service of global storytelling, it is Netflix”

The State of the Streaming Market 2019

Streaming Media

Our annual big-picture look at the numbers that tell where the online video market is today and where it's headed in the next year.

http://www.streamingmediaglobal.com/Articles/Editorial/Featured-Articles/The-State-of-the-Streaming-Market-2019-130616.aspx

Just 4 or 5 years ago, streaming services were being labelled as supplementary to pay TV, an inexpensive add-on that would offer viewers alternative content. The reality now is that over-the-top (OTT) is on a decidedly upward trajectory while its competition is not. 

TV viewing has been steadily sliding across Europe, a trend which UK media regulator Ofcom identifies as not a blip but a "structural decline" in the 2018 version of its annual Communications Market Report.

People across the UK watched an average of 88 minutes of non-broadcast content on their TV each day, with 16–34-year-olds viewing 2 hours, 37 minutes of on-demand—including 59 minutes of YouTube, on PCs, phones, and tablets—according to Ofcom's annual report on how communications services are changing in the UK. 

These patterns are repeated everywhere. Conviva's State of the Streaming Industry report for Q3 2018 shows that streaming TV consumption globally has more than doubled in a year.

While European internet users are less likely to watch video on a smart TV or smartphone than their US counterparts, according to research from Ampere Analysis, overall, viewers continue to prefer mobile devices for consuming short-form content and connected TVs for consuming long-form programming. 

More significantly, a growing segment of TV viewers has also started to associate OTT with both high-quality on-demand content and start-over functions. 

"The increasing capabilities of mobile devices to deliver video content mean consumers now expect a compelling and consistent experience from their traditional TV service provider across devices, blurring the lines between traditional linear TV and online video," finds the latest PayTV Innovation Forum report  from Nagra and MTM. 

"The demand for quality is pushing connected TVs to the top in terms of device share, commanding more than 50% of total viewing hours at the expense of PCs that have lost 7% while mobile remains relatively flat,” Conviva CEO Bill Demas notes in a press release announcing the "State of the Streaming TV Industry" report. 

The report enforces the understanding that viewer engagement is directly related to the content's streaming quality, with rebuffering a key factor. 

"It's clear that viewers are less tolerant of a poor experience, as 13% of U.S. and 16% of global viewer attempts result in an exit before the video starts," Demas warns. "Providers must increasingly focus on the streaming TV experience to match viewers' rising standards." 

Conviva did chart "significant overall improvements" in streaming quality, with video start failures down 33% year on year (YoY), as were buffering rates (down 41%); meanwhile, it found picture quality (bitrate) had increased by a quarter. 

No TV for Generation Edge 

We know Millennials are fleeing traditional TV but Nielsen figures from November showed post-Millennials ("Generation Edge") abandoning TV in even bigger numbers, which eroded to 18% over the past year, according to Ooyala principal analyst Jim O’Neill.

 Ofcom also reports the steepest fall in TV viewing among children and young adults. Children's viewing fell by 15% in 2017 to an average of 1 hour, 24 minutes, while 16–24s' viewing fell by 12% to an average of 1 hour, 40 minutes. This means that over-54s, who make up just 28% of the UK population, accounted for 51% of broadcast TV viewing in 2017. 

Alarmingly for broadcasters, "[O]lder viewers are starting to catch that wave, because streaming content to connected devices and to mobile phones continues to grow cross-generationally," says O'Neill. 

Content War 

Programming is the primary weapon to attract and retain audiences—but it costs. 

"Cost—more than anything else—is going to be the determinant in who thrives in the new OTT environment," O'Neill predicts. "Content distributors who can't maximise ROI or who can't afford a continuous stream of new content are going to simply disappear." 

Ofcom's "Communications Market Report" has found that drama is still capable of attracting 8 million-plus viewers in the UK, but many smaller shows have dropped below 5 million. Outside of live sports (decreasingly available on free-to-air channels), "TV shows with mass appeal are now increasingly difficult to generate" it states. 

That said, October 2018 saw a record-high 334 million requests for BBC iPlayer, bolstered by high-ranking drama like Killing Eve and the start of the 37th run of Dr Who. 

Current market pressures are increasing the cost of content at a time when original content is in demand. Even Netflix could be trapped in a cycle of its own making. 

Ampere Analysis says cost of acquiring subscribers to Netflix in the U.S. has shot up from $60 to $100, according to Advanced Television, as the streamer's content budget nudged $13 billion in 2018. 

Its content strategy is being angled toward local origination. From new commissioning hubs in London, Madrid, and Paris, it will raise the number of European titles it produces by a third to 221 projects. Amazon and YouTube are adopting similar strategies. 

"In addition to giving audiences the local, original content they crave online, those assets will go a long way toward satisfying pending laws from the European Commission requiring 30% of streaming services' libraries to be sourced from Europe," observes O'Neill. Prowess in locally produced content is also the argument made for the survival of public service broadcasters (PSBs). In a public address in March, BBC director general Tony Hall warned that the success of digital streamers threatened to undermine British values unless there was some sort of "breathtaking, seismic change." 

Yet, as Ofcom reports, UK PSBs combined spend on TV content remained flat in 2017 at £7.5bn, with spend on original local programming within that total dropping to £2.5 billion. 

PSBs Plot Digital Fightback 

All of these factors coalesced into a growing clamour for a consolidated UK public service broadcaster SVOD service. Such a "British Netflix" would showcase the best of British programming to compete with the global growth of FAANG. By the end of 2018, Ampere forecast Netflix would reach 9.78 million UK subs, while Ofcom pegged Amazon's subscriber number as close to 5 million. 

A revived venture (prevented by competition authorities from forming a decade ago as Project Kangaroo) was in discussion at ITV, BBC, Channel 4, and Channel 5 all year and would seem to be waved through by Ofcom should a proposal be agreed. 

Sharon White, Ofcom's CEO, reiterated her stance at several points in 2018. "As the national broadcaster, we'd expect the BBC to take the lead on forming such partnerships," she said in November. "And for our part, Ofcom has to be a forwardlooking regulator that supports the future success of UK TV, firmly rooted in the online world." 

The idea is that a single digital platform would unite the content available on each of the PSB's individual on-demand services (iPlayer, ITV Hub, All 4, My5) and make it easier for viewers to access content across a range of devices. 

The BBC has partnered with ITV on the joint U.S. streaming service BritBox, while a new free Freeview mobile app for live and on-demand streaming from the PSBs, launched in January, shows that collaborative deals can be done. 

Aside from being a paid-for service, the new PSB SVOD would probably have a single login and have its content pooled. Brand protection may be a sticking point for BBC and ITV. 

The move, finally announced in February as a UK version of BritBox, would be similar to partnerships in France (between Rai, ZDF, and France Television) to enter a co-production pact and pool funds and in Germany, where Discovery has linked with ProSiebenSat.1 to build a paid-for programming hub. 

Defending its position, Sky's chief executive of UK and Ireland, Stephen van Rooyen, warns in The Guardian  that any such plans could still fall foul of the competition regulator since PSBs still command nearly three-quarters of viewing share.

Should a PSB SVOD not go ahead soon, ITV has prepped its own plans to launch its own domestic streaming business, which it reportedly thinks will net more than £200m ($254m) a year, according to Broadcast. 

Media Giants Position for DTC 

The battle for Sky between Comcast and Fox was the year's biggest M&A this side of the pond, one in which Comcast emerged victorious after parting with £30.6 billion ($40 billion) and Rupert Murdoch was ousted from British TV (if not all media) for the first time in 30 years. 

According to Ampere Analysis, the deal is predicated on a strategy in which streaming services and direct to consumer (DTC) offers take priority and major content creators increasingly keep their own content for their own services. 

Indeed, if the combined Comcast/NBCUniversal and Sky decided to pull all owned content from Amazon and Netflix in the UK and push it to Now TV, Sky's streaming service would grow by around 20% in volume, boosting its competitive position in the UK market. 

"As Comcast owns NBCUniversal (which also owns Dreamworks Animation), Comcast could decide to follow in Disney's footsteps and shift its content away from Netflix and Amazon in Sky markets and place it on its newly-acquired streaming services in the UK, Ireland, Germany, Austria and Italy," Ampere has observed.

 Comcast and Sky have already partnered to offer NBCUniversal's reality TV streaming service, hayu, on Now TV devices in the UK. Despite placing its bets on a traditional satellite pay TV platform, Comcast is likely to also be looking to expand its streaming footprint internationally using Now TV and its sister entities. 

With Disney+ and Apple's services both on the horizon to launch in 2019, the storm facing PSBs and pay TV providers will intensify. 

The number of publishers launching OTT services has grown too. From Condé Nast to Vice, there has been a growth in brands which once would have focused solely on text but are now launching separate video platforms with hours of new original content. 2019 could see an acceleration of this trend. 

"An increasing number of publishers will create platforms which attract consumers already using VOD products," says Tom Williams, CEO at Ostmodern. "This will mean that some publishers will take away much of their audiovisual content from social media platforms." 

Voice Takes Control 

All of this puts intense focus on discoverability, a focus that risks burying broadcasters all together. Ofcom will advise the UK government this year on how PSB prominence might be legislated to ringfence content. Today, PSBs get the top channel slots on a TV EPG (electronic programme guide). 

But even that may be redundant if, as many believe, voice search will soon be the dominant TV interface. Mark Harrison, managing director of the Digital Production Partnership (DPP), told the Changing the Picture conference in November that voice search will be the single most disruptive and important thing to happen to video in a decade. "There will be a ‘Voice EPG' and the question is, when we say ‘Play me some news, play me some comedy': What news? What comedy? Who will decide on this? The one who has the most money? And what will happen to niche content?" 

Virtual voice apps are being integrated into new TV displays and set-top boxes. Any pay TV operator choosing Android gets Google Assistant bundled in. It was estimated that smart speakers would be in more than 100 million homes worldwide by the end of 2018, while Amazon claims 20,000 different devices can be connected to Amazon Alexa alone. 

"TV is the most important space for us," Fabrice Rousseau, Amazon's GM for Alexa Skills EU, informed the IBC2018 conference. "Voice is going to change the user experience by making it a simpler and richer way to access content." 

But that's what worries broadcasters. In the same panel session, Channel 4's chief consumer and strategy officer Sarah Rose argued that content providers had to "actively defend" themselves over a service they had little control over. 

She urged broadcasters to work together to standardise voice interfaces (their metadata) "so that the consumer isn't going to be confused" and also urged Amazon to share data on Alexa interactions with consumers around content. 

Rousseau insisted that there were no plans to prioritise Amazon Prime over that of other content providers—yet. 

There are likely to be battles ahead around rights and which assistant can serve what content to which device. 

Sports Streaming Becomes Business as Usual 

Another indication of the growth in streaming is the impressive increase in peak concurrent plays. Peak concurrency in Q2 2018 was up by 45% YoY, spiking to 5.3 million concurrent plays during the winner-take all 7th game of the NBA Western Conference Finals and then 7.9 million during the FIFA World Cup, as charted by Conviva. In the UK alone, a record 3.3 million requests were made to stream England's dramatic penalties win against Colombia via ITV Hub, according to The Guardian. 

These spikes demonstrate that sports are driving "appointment TV" in the streaming space even while they are broadcast to TV. More than 24 million people in the UK also watched England v Colombia, making this match one of the most-watched events in recent UK TV history, as reported by The Guardian. 

While live simulcast is becoming a valued part of the fan experience, these events can also create massive demands on the video delivery ecosystem, which faltered at times in 2018. 

Combating Latency 

The rollout of Formula 1 streaming service F1 TV got off to a stuttering start in May when live playback issues resulted in some viewers being unable to watch the race. 

Australian telco Optus had to hand its rights to the FIFA World Cup over to free-to-air broadcaster SBS in July after subscribers reported being unable to watch games. 

However, Nick Moreno, director of strategy at communications infrastructure company Arqiva, reminds us that these incidents are outliers. "Though clearly serious for the rights holders involved, these are noteworthy events only because they are now relatively rare," he told me in a December Broadcast interview. "Multiple millions of streams are delivered every day without hitch, but this doesn't make headlines." 

Latency has long been an OTT bugbear, but one that BBC R&D may have cracked. In a prototype for which it won an award at IBC, Chris Poole, lead research engineer for BBC R&D, explained that it could eliminate delay by either reducing the duration of each segment of video file sent over the network, or by creating the segments progressively as a series of chunks that can be passed through the chain immediately as they become available. 

Esports finally burst into mainstream consciousness last year. Official affiliation with the Winter Olympics in February is paving the way for the sport's full integration. The $25m prize pool at The International Dota 2 tournament is indicative of the entertainment's rapid rise. 

"2019, we will see more organisers experimenting with enhanced interactivity, such as allowing viewers to vote collectively on a player's next move in a game, through the use of polls that appear on the screen during the live feed," predicts Ostmodern's Williams. "Viewers in eSports will not just watch game broadcasts but will actively participate in them, potentially affecting the outcome of a contest." 

Rights to premium sports continue to be fiercely fought for. The most eagerly anticipated auction in the UK was for the English Premier League (EPL), the second-most lucrative sports franchise in the world behind the NFL. Incumbent domestic rights-holders BT Sport and Sky regained the bulk of live TV coverage, paying a combined £4.464 billion ($6.43 billion), which is less than the £5.14 billion ($7.1 billion) for the previous tranche. 

More attention was on whether a digital player would be enticed by the EPL's smaller package of livestreamed games. Amazon eventually made the move by purchasing a 3-year, 20-match-per-season set of games for Prime (following its scoop of exclusive UK rights to the ATP tennis tour and US Open tennis tournament). 

While this looks like more of a tester for the future, the biggest mover in sports streaming was Perform Group, the UK-based self-proclaimed Netflix of sport, which rebranded in 2018 as Perform Content, and DAZN, with the latter being its consumer-facing division. 

DAZN Goes for Broke 

Already with a presence in Germany, Austria, Switzerland, and Japan, it launched in Italy and the US last year. In Italy, it paid nearly €600m for three seasons, or 114 matches a year, of football league Serie A. 

Ampere Analysis is sceptical. "DAZN has an addressable market of 7m Italian households. It needs to sign at least 25% of these homes in order to break even on the rights costs," it notes adding that DAZN's monthly price of €9.99 means DAZN's break-even point, "while high, is not unachievable".

It maintains, "DAZN's local success will be a key test of whether subscription OTT players are really ready to disturb incumbent pay TV providers in the big-ticket sports rights arena." 

It landed in the U.S. in September with an eyewatering $1 billion for exclusive U.S. rights to broadcast Matchroom Boxing's 16 US and 16 UK staged fight nights per year which, at current exchange rates, means around $118m per year—a bigger budget for promotion than HBO and Showtime put together. 

Matchroom's boss Eddie Hearn told The Independent,  "I could have done this with less money—probably half the money—but to make it as powerful as we can, this figure enables us to do it. This will end up eradicating, in my opinion, the pay-per-view model here in America. It's so expensive, it's ridiculous—$99 for a pay-per-view". 

"Paying over the odds for a niche sport in an already saturated US market, in terms of content distributors, is an enormous gamble; especially at a time when viewing figures for boxing and sports overall is declining," is the view of MIDiA Research.

MIDiA points out that Disney-owned ESPN+ offers a much more diverse sports portfolio, which could impact DAZN's value proposition on entering the market. But DAZN is nothing if not ambitious and aggressive, plotting to make inroads with major sports leagues, including the NFL and MLB when rights become available in 2021–2022. 

At the other end of the scale, for second- and third-tier sports, remote production for signal contribution purposes over the internet is gaining ground. SRT, the open-source protocol developed by Haivision goes some way toward ironing out the glitches in sending video over the public internet, a point recognised with the award of a technical Emmy. 

Codec Wars 

Arguably the efforts to promote an alternative video streaming codec to HEVC were generated as much by frustration over HEVC patent holders' refusal to budge on either cost or transparency of licence payments than any bounding improvements in rival technologies. Nonetheless, most observers concede that the foot dragging by HEVC stakeholders has irreversibly opened up the market for new contenders. 

Chief among these is AV1, backed by the Alliance for Open Media (AoM). Others include Divideon's xvc, which attempts to find a middle ground between AV1 and HEVC, and PERSEUS from V-Nova, which works by enhancing existing HEVC encoders and so wouldn't necessitate a rip and replace. V-Nova is promoting this at MPEG with a view to getting it standardised. Samsung, which is not a member of AoM, is pursuing its own HEVC successor through MPEG. 

The sanest observers on this topic point out that HEVC is still a very efficient codec and that it will take any rival at least 2 years to either reach critical mass of market development and/or standardisation to make any real impact. By that time, MPEG intends to come riding to the rescue with Versatile Video Coding (VVC), designed to generate a 40% efficiency over HEVC for applications in omni-directional immersive media. 

The desire to improve VVC's commercial prospects by reassuring potential users that the mistakes of HEVC will not be repeated led to the formation of the Media Coding Industry Forum (MC-IF), which includes HEVC Advance. 

5G Drives Mobile Gaming and Extended Reality 

Cisco's latest Visual Networking Indeix predicts that by 2022, 60% of the global population will be internet users, more than 28 billion devices and connections will be online, and video will make up 82% of all IP traffic. This volume is being driven by 5G, which will go commercial in 2019. 

Qualcomm's 5G-ready Snapdragon 855 chip is already being incorporated into flagship Android smartphones like the Samsung S10. The system-on-a-chip is primed for 2Gbps speed using a 4G modem, but higher in 5G mode and using the 802.11ay-based protocol, it will take Wi-Fi speeds up to unprecedented 10Gbps. 

Intel and Ovum predict that user demand for video data alone will grow from a monthly average of 11.7GB per 5G subscriber in 2019 to 84.4GB in 2028, at which point it will represent 90% of all 5G traffic. 

The source of this data won't necessarily be autonomous cars or IoT sensors but VR and AR (merging into eXtended Reality [XR] or mixed reality [MR]). Virtual and augmented reality traffic will skyrocket, Cisco believes, so that by 2022, it will consume 4.02 exabytes (EB) a month, up from 0.33EB/month in 2017. 

Intel/Ovum states that 1 minute of AR will consume 33 times more data than 1 minute of 480p video. Yet by 2028, AR games will dominate more than 90% of 5G AR revenues, or around $36 billion globally. 

Intel speculates, "Initially, users will see mobile cloud gaming become a reality, as cloud-based servers do the heavy graphics and AI lifting for less powerful mobile devices." 

Intel and Ovum also list a variety of ways that video viewers will be able to enjoy immersive experiences, including "responsive haptic clothing," that will drive new 5G use cases.