Disruption in content distribution and the new normal

Content distribution is experiencing tremendous disruption. Broadcasters are going online, telcos are offering digital TV services, and players like Netflix and Hulu are storming into space once dominated by a handful of all-powerful television-broadcast leaders. It’s a new era of content democratization, where viewers are sure winners and content owners, rights holders, telcos, and broadcasters alike are rushing to meet consumer demand for anywhere, anytime content.

The net result? More content is available across more digital platforms than ever before. Content delivery networks (CDNs)—geographically distributed networks of servers that hold copies of content—have risen in number and importance in response to the booming content marketplace. Using a general-purpose CDN service is one approach, especially if you don’t have too many viewers or they are widely dispersed. But costs rise in direct proportion to the bandwidth used, so they don’t offer much economy of scale or control over content delivery.

Edgeware has pioneered a more specialized purpose-built approach. We build TV delivery technology for high-quality, low-latency content distribution at large scale. One of our purpose-built TV CDNs can deliver live-to-VOD, catch-up, start-over and pause-live TV, cloud DVR, TV everywhere, ad insertion, fast channel change, 4K TV – all from one shared platform. It can also eliminate expensive bandwidth rental and provide operational and resource efficiencies that result in significant cost savings over time.

An exploding, crowded market

Edgeware began by helping telcos offer TV services with local ad insertion and other features that optimize networks’ reach and infrastructure. Now, a growing number of OTT (over the top) providers and content owners are also looking for cost-effective ways to distribute content. And as services become more successful, and the capacity per viewer increases with advancements like 4K and VR (virtual reality), there is little economy of scale to be gained by distributing across someone else’s service. So, it makes sense to explore creating and operating your own network.

It’s a landscape of opportunity but it’s also a crowded one. It’s important for any company to positon for growth, to make the most of market opportunities. While it’s not without its challenges, it’s a great place to be.

Success through innovation

Companies that succeed in today’s rapidly changing landscape are those that innovate alongside, not in response to, these changes. Our focus on innovation translates into specialized offerings like anti-piracy and forensic watermarking that are tremendously important to combat a pervasive problem. Billions of dollars are lost each year to online piracy. YouGov research that has recently been commissioned by Edgeware has found that nearly 40% of viewers are likely to watch pirated content on-demand by downloading or streaming illegally shared versions of popular films and TV programming. Further, more than one fifth (21%) said they would watch live events like live sports from unsolicited online sources. Protection of digital content across the content creation and distribution chain is critical.

At the same time, the industry-wide move from software to hardware and to cloud-based technologies and a more open virtualized environment can’t be underestimated. But it’s not a one-size-fits-all proposition. Hardware is a still a viable, competitive sector. Not all regions of the world have the fiber infrastructure required to support entirely software-based operations. For many content owners and distributors, hybrid solutions are the best answer, allowing hardware to be distributed closer to viewers and bypass a congested Internet. In fact, Edgeware is uniquely positioned to play in all spaces – software-only, hardware-only and hybrid. We design systems according to the specific needs, budgets and infrastructure realities of our customers.

We can also provide our customers unique insight into their viewers’ behavior and give control back to the content owner, rights holder or broadcaster. By correlating viewing insights and analytics with network performance, they can get a clear snapshot of who’s watching, what they’re watching, and how they’re watching it – as well as how’s it’s being delivered. It’s said that knowledge is power and perhaps nowhere is this truer than internet TV services.  

Managing growth within the content distribution landscape is also critical. Many of our customers are seeing tremendous subscriber growth. At the same time, providers must address occasional viewership spikes related to programming. So a high-quality service that can scale is critical. We know Netflix solved their scaling challenges by building their own CDN for TV delivery. And the same is true for lots of our customers. Our TV infrastructure, including software design, is optimized to scale.  

Find your competitive advantage

It’s important for any technology company to innovate to keep abreast of customer needs. Sometimes that innovation delivers unique benefits and sets you apart in the market – a sweet spot of differentiation. For Edgeware, repackaging content at the edge of a TV CDN instead of at the origin reduces backhaul and cache storage by a factor of two to three, which is enormously compelling to our customers. The network is less congested because only a single format of the content needs to be distributed. This frees up caching memory and reduces the risk of buffering or glitches, significantly improving the viewing experience.

You can also repackage, encrypt and personalize streams to include ad insertion, be watermarking, time-shift TV, and serve multiple devices directly at the edge without the going back to the source content and be fetching lots of different versions. It optimizes storage and saves capacity. The content only needs to be ingested once in the origin, before it is automatically distributed to the delivery server upon a viewer’s request.

Evolving revenue models

The reality is that ad revenues have been leaking out of the traditional TV industry for more than a decade. Today, content owners, telcos and service providers are exploring subscription-based as well as advertising-driven models or a combination of the two. Targeted advertising achievable through online content delivery has blown open the door to new revenue models. And now, personalized ads and local ad insertion are driving a return to higher advertising revenues.

The sporting life

The launch of myTV SUPER, an OTT service provided by one of the largest commercial Chinese program producers in the world, speaks to what can be achieved through a smartly designed platform.

Rather than rent capacity on a generic public CDN service, myTV SUPER decided to launch its portfolio of online TV services—including 50 linear channels, live programming, and 4K VOD content—by building its own TV CDN for full control of its new OTT services. Their TV CDN was built using 60 Edgeware distributed servers across Hong Kong, to cache popular content and stream it in high quality directly to viewers. They were also able to deliver a rich set of time-shift TV functionality and personalized advertising insertion options with subtitling support in multiple languages. The service has attracted more than five million users in less than two years and put viewers in total control of everything they watch.

We’re seeing more local providers and content owners getting into the game. Sports leagues and other regional content owners are sitting on valuable content they want to distribute – not just in their own backyard but to others around the world who share their affinity. Audiences are willing to pay for high-quality content, so the breadth of the market is expanding exponentially. It’s an exciting time for content owners and viewers as technology innovation brings these worlds ever closer.

www.edgeware.tv

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