Next TV

Perchance to Stream

Virtual MVPDs must step up their game to deliver broadcast-TV like scale and performance over the top 12/05/2016 8:00 AM Eastern
CBS's online audience for Super Bowl 50 was some 3.96 million viewers -- a fraction of the 111.9 million who watched on traditional TV. OTT isn't yet scaled up to handle such viewing volumes.
Mark. J. Rebilas/USA Today Sports
TakeAway

The rise of virtual pay TV distributors such as DirecTV Now could force over-the-top providers to undertake an infrastructure growth spurt to broadcast-TV scale.

Free and subscription video-on-demand services sparked a major shift toward over-the-top viewing. Now, the emergence of virtual pay TV providers is stoking another big OTT movement — this time toward linear, live TV services.

 

This latest trend is shepherded by a new breed of virtual multichannel video programming distributor (MVPD) services such as Sling TV and Sony’s PlayStation Vue, and will now expand with last week’s launch of DirecTV Now, as well as online pay TV offerings coming from Hulu and YouTube.

 

Though use of OTT services is on the rise, even during highly viewed “tentpole” events, it remains relatively small compared to traditional pay TV audiences. Significant scale is coming, though. Meeting the increased demand for live TV feeds via the Internet presents a broad mix of critical technology and business-related challenges that will need to be addressed as Internet- fed audiences continue to expand in the years to come.

 

STARTED WITH VOD

For OTT video, on-demand was the first entrée, in part because it was easier to engineer. VOD requires materially fewer moving parts and less complicated workflows, John Bishop, chief technology officer of Akamai Technologies’ media business unit, said.

 

Next came one-off live events, which were more difficult to handle, though Akamai’s platform now handles tens of thousands of them — perhaps 100,000 — per day.

 

“But what is new right now is linear [networks],” Bishop said. “They are similar to live events from a functionality standpoint, but when you look at it from a redundancy, planning and maintenance perspective, they are very different.”

 

Some live events, including NBCUniversal’s expansive online coverage of the Summer Olympics in Rio de Janiero earlier this year, are especially intensive. They also provide windows of inactivity that allow for changes and tweaks, though.

 

“We don’t have that luxury with linear,” Bishop said. “It’s always running.”

 

While picture quality, consistency and the quality of the experience are all key “tenets” of live streaming, “scale is always the hard one,” he said.

 

Online video publishers are seeing a greater push into the live arena. “Most every new customer has a requirement for some kind of live [component],” Arik Gaisler, Kaltura senior director of product management, infrastructure, said.

 

Even partners that don’t have a live stream are looking to add a live-like experience using preprogrammed VOD content that can be spliced into a linear-style stream, Gaisler said.

 

Progress is being made. It wasn’t long ago that any streaming number with the word “million” tied to it was cause for major concern, Bishop recalled. “We would’ve all gotten the cold shakes — this was an all-hands-on-deck, student-body-left movement,” he said.

 

These days, preparing for 5 million concurrent streams doesn’t cause a lot of lost sleep.

 

“North of 10 million gets me very worried,” Bishop said. “And what scares me online is 125 million coming in possibly for an event like the Super Bowl. We’re not there yet.”

 

Fortunately, neither is the online viewership of pro football’s marquee matchup. Availability of live Super Bowl streams are now the norm, but they tend to be a complementary option to the traditional TV feed.

 

CBS’s live stream of Super Bowl 50 in February drew 3.96 million unique viewers, far behind the 111.9 million viewers who tuned into the CBS telecast.

 

SCALING UP

“We still have a long way to get to the point where we can handle broadcast-level scale,” Devin Poolman, senior vice president of digital platforms at Fox Sports, said. “We’re seeing tremendous growth curves … but we need to start building for [broadcast-level scale] now — not just for ourselves, but as an industry.”

 

During Game 7 of Major League Baseball’s World Series between the Chicago Cubs and Cleveland Indians on Nov. 2 — a tight contest that saw the Cubs prevail by a score of 8-7 — more than 1 million consumers viewed some 3.5 million-plus streams via Fox Sports Go, the programmer’s TV everywhere service. Those were OTT records for Fox Sports, yet relatively small figures placed against the 40 million viewers who tuned in via traditional TV for the series clincher.

 

“Relative to our past records, over the last six months we have quadrupled our bests in terms of concurrent audience,” Poolman said.

 

Sling TV, Dish Network’s OTT TV service, doesn’t break out subscriber numbers, but says its totals have been on the rise since its debut in February 2015.

 

“We have seen continued growth and we’re pleased with how the year has progressed,” Ben Weinberger, chief product officer at Sling TV, said, noting that live events, led by sports, tend to drive traffic to the OTT TV service.

 

The recent presidential election, and the debates that surrounded it, also created spikes in usage. And, on occasion, sports and the election collided.

 

A case in point was on Sept. 26, when the first Donald Trump-Hillary Clinton presidential debate outstreamed the New Orleans Saints-Atlanta Falcons Monday Night Football game. On Sling TV, the debate at its peak generated 68% more viewers than the football game. Together, the game and the debate helped to shatter all of Sling TV’s previous viewership records.

 

Jason Thibeault, executive director of the Streaming Video Alliance, a cross-industry group that counts members such as Comcast, Major League Baseball Advanced Media, Charter Communications and NeuLion, is also taking on the scalability challenge that live OTT will face as Internet-using audiences continue to grow.

 

“We don’t have the infrastructure available to deliver live video to 15 million people concurrently. That would break the Internet,” Thibeault said. “There’s a whole value chain when it comes to delivering live video. It has challenges in front of it in order to make it broadcast quality.”

 

INFRASTRUCTURE WORRIES

Among the solutions getting a close look are multicast streaming, which is more efficient than unicast streaming because it allows a subset of viewers to share live streams; and LTE-B, also referred to as evolved Multimedia Broadcast Multicast Service (eMBMS).

 

SVA, meanwhile, is focusing on the live-streaming challenge in part through a new Open Caching working group that’s focused on putting caches deep into the network, as close to the user as possible. In addition to helping with concurrent streaming, the project will also target latency so that OTT viewers receive a feed more closely synched to the traditional TV broadcast, rather than one that lags 30 seconds behind it.

 

SVA is creating the functional requirements and technical specifications to build a new open caching infrastructure for companies in the OTT ecosystem. Next year, several SVA member companies are expected to collaborate on a proof-of-concept/demonstration of the open-caching idea.

 

“Hopefully that will solve some of the latency issues and improve the end-user experience for content delivery for both VOD and for live,” Thibeault said. “All of these players recognize that this is what consumers want and this is the next generation of the television experience.”

 

Bishop agreed. “Being close to the edge matters more and more now,” he said. “Consumers are expecting lower latency and high data rates. All of that needs to be served as close to the end user as possible.”

 

Bishop and Akamai are also strong advocates of shifting OTT video to the User Datagram Protocol, an alternative system known for delivering lower latencies and being less “chatty” than Transmission Control Protocol (TCP).

 

Bishop sees TCP and UDP as coexisting for a long time to come, but expects adoption of UDP to “start small and then quickly ramp up” over the next 36 months.

 

Much of that work will need to happen on the client side of the streaming equation — laptop browsers, tablets, smartphones and connected-TV platforms. Google Chrome already has native support for UDP, but other devices, such as the iPhone, will need a software development kit to receive UDP content, Bishop explained. Akamai is making an SDK available for free that can pull UDP-based content off its platform, he said.

 

Dan Rayburn, executive vice president of StreamingMedia. com and a principal analyst at Frost & Sullivan, has a different view about the big issues being confronted by live OTT. Some providers are playing it too close to the edge to keep costs in check, he said, which in turn exposes them to unnecessary outages.

 

Others, like Twitch, the Amazon-owned company behind the popular live-streaming video game service of the same name, rarely run into buffering and capacity issues. Rayburn calls MLB Advanced Media the “gold standard” for live OTT streaming, and a big reason why PlayStation Vue and online video services from the WWE and the National Hockey League use that platform.

 

“They understand the importance of live. They understand that you get one chance to do it right,” Rayburn said, noting that MLBAM recognizes that underspending on streaming infrastructure and backend workflow systems can harm its reputations and brands.

 

“Some of the biggest challenges [with live streaming] aren’t technical; they’re business-related,” Rayburn said, pointing out that the vast majority of OTT TV services aren’t adding subscribers rapidly enough to make scale much of an issue — yet.

 

Some of the newer OTT TV players won’t be able to survive without being subsidized by a well-funded parent, Rayburn added.

 

Sling TV “wouldn’t be in business if they weren’t owned by Dish,” he said. “They wouldn’t survive [because] their subscriber count is too low.”

 

And as for DirecTV Now, the new OTT TV service from AT&T? “DirecTV Now couldn’t roll out on its own, because the model doesn’t make sense,” Rayburn said, noting that OTT providers have to pay more in capacity as more and more customers stream content from them.

 

To its credit, AT&T is nailing up enough capacity to support 1 million simultaneous DirecTV Now users a year from now, he said, citing his sources in the online video industry.

 

“AT&T is being realistic, internally, in saying, we don’t think we’re going to get that many subs in the first year,” Rayburn said.

 

AT&T has not made any subscriber predictions for DirecTV Now, other than to say it will be targeted to the 20 million U.S. homes currently outside the traditional pay TV ecosystem.

 

The company appears confident that it will be able to deliver a high-quality, stable experience for a service that will be streaming more than 100 live TV feeds.

 

AT&T: WE’RE CONFIDENT

“We do scale at AT&T,” John Stankey, CEO of AT&T Entertainment Group, stressed at the company’s DirecTV Now press event on Nov. 28 in New York. “When you bring a product in, it needs to be scaled.”

 

Stankey said the new video platform, which DirecTV Now is riding on, will serve as “the foundation for how we’re going to do things in the future.”

 

Rayburn said it’s important to remember that OTT and broadcast TV are different animals. At a base level, the Internet is open and public, made up of myriad networks and systems. Broadcast television is a closed, standardized and private system that is largely based on fixed costs. “From a cost and infrastructure standpoint, it’s night and day,” he said.

 

“People always connect capacity with streaming,” Rayburn said, but problems that occur aren’t always with the video itself. Often the problem is an issue with the player, the authentication system or a bad API. “There’s all kinds of steps in the process that have to work perfectly and tie into one another. If any of those don’t work or get hung up, you can’t even get to the video.”

 

Fox Sports’s Poolman agreed: “Different systems have to work well together. Invariably, there are different failure points or choke points. We spend a lot of our time on how to mitigate that and also have the redundancy and more efficient paths to get to the end user.”

 

OTT TV providers such as Sling TV need to have a good sense of the average audience to prepare for, but remain agile enough to add streaming and sign-on capacity if, for example, a big breaking news event occurs.

 

“We have to prepare for normal traffic and we need to prepare for spikes in that traffic because of unexpected events, and we need to prepare for new people coming into the service at the same time,” Weinberger said. “A lot of that has to do with the entire ecosystem that we put in place. There’s only so many things that we can control.”

 

SIDEBAR: fuboTV Forges a Build-vs.-Buy Path

fuboTV, the self-proclaimed “sports-first” virtual MVPD that launched in January 2015, faced a big challenge in July when FC Barcelona squared off against Real Madrid — a match between popular and rival La Liga soccer clubs that’s known as “El Clasico” whenever it occurs.

 

fuboTV, which delivered the game via its distribution deal with beIN Sports, ran into some technology snafus: Some subscribers had trouble signing on and others reported different streaming-related issues.

 

The troubles were temporary, but they happened during a major sporting event and fuboTV made the decision to offer s $15 credit (applied in three monthly $5 increments) to affected subscribers.

 

It turned into a valuable lesson for the OTT service, which decided it made sense to rebuild its platform in-house rather than relying on one that was largely based on outsourced products.

 

“When I took this job, I expected very heavily to buy systems from other vendors and put them together,” said Jason Solinsky, a former Google engineer named chief technology officer of fuboTV in August.

 

“In fact, we’ve gone the opposite direction,” he said, noting that an enormous amount of the software that powers the service’s platform, including its account management and package management systems and code, have been rewritten and developed internally.

 

“That’s the only way to achieve reliability that’s on par with a cable system,” he said.

 

fuboTV is about halfway through with replacing its infrastructure, Solinsky said, and expects to complete the job by the end of 2017 if not earlier.

 

The service now better understands what’s required to develop and scale an OTT TV service and “where the pain parts are,” cofounder and CEO David Gandler said.

 

Live-streaming, particularly with sports, “requires someone that has access to the full chain of problems that can take place,” he said.

 

And fuboTV’s internal handiwork is being parlayed into a new, complementary line of business as a streaming platform provider for other services.

 

“I think we’re a cross-breed between a Sling-type service and BAMTech,” Gandler said, the latter a reference to the tech services and video streaming operation launched by Major League Baseball’s MLB Advanced Media, which recently nabbed a major investment from The Walt Disney Co. “We’ll be focused on building out a fully automated end-to-end solution.”

 

SIDEBAR: OTT by the Numbers

A recent sampling shows live sports streaming is driving sizable audiences to the OTT world, but those numbers are still dwarfed by traditional TV viewing audiences.

 

15.2 million: The number of unique viewers who tuned into Yahoo’s global live stream of the National Football League’s Jacksonville Jaguars-Buffalo Bills game on Oct. 25, 2015. Yahoo streamed that game to most regions of the world, but the game was also available on regular TV (via CBS) in the local Buffalo, N.Y., and Jacksonville, Fla., markets. The game generated 33.6 million video streams, and more than 460 million total minutes of video consumed, with 33% of the audience — about 5 million viewers — originating outside the U.S.

 

3.96 million: The number of unique viewers who accessed CBS’s live stream of Super Bowl 50 between the Denver Broncos and the Carolina Panthers across desktops, connected TV platforms, tablets and smartphones. CBS said viewers consumed more than 402 million total minutes of coverage, and watched for more than 101 minutes each on average. By comparison, the CBS Super Bowl telecast averaged 111.9 million viewers, according to Nielsen.

 

2.1 million: The number of unique viewers worldwide who watched Twitter’s first Thursday Night Football live stream on Sept. 15 between the New York Jets and the Buffalo Bills. The feed’s average audience was just 243,000, and each viewer watched an average of 22 minutes of the matchup via Twitter. By comparison, 5.4 million television viewers tuned in to watch the game on CBS or NFL Network.

 

911,000: The number of Sling TV subscribers at the end of third-quarter 2016, according to the latest estimate from MoffettNathanson analyst Craig Moffett. Dish Network no longer breaks out how many of its 13.64 million pay TV subs take the OTT TV offering.

 

180-plus: The number of live TV feeds offered via Comcast’s TV everywhere app. The MSO said nearly 50% of its subscribers are using its TVE platforms, up from 30% of subscribers last year, and that customers are viewing 10 hours a month of TVE content on average.

 

SIDEBAR: Struggling to Keep Popular Streams Stable

While OTT TV service stability has been steadily improving, the struggles have tended to pop up during premieres of popular shows or big sporting events.

 

Among some examples, Sling TV buckled under the strain last August during the AMC premiere of Fear the Walking Dead, and last year during the TBS telecast of the NCAA men’s basketball tournament’s Final Four round due to a rush of signups and the resulting spike in streaming demand. In June, HBO Now, the premium programmer’s standalone OTT TV service suffered a temporary outage when streamers swamped the system to watch the a new episode from season six of hit series Game of Thrones.

 

Notably, that hiccup occurred after former HBO chief technology officer, Otto Berkes, resigned in late 2014 after the programmer opted to shift gears and work with a third-party streaming infrastructure partner, MLB Advanced Media, after its TV Everywhere service, HBO Go, melted down multiple times during the premieres of GoT episodes and other series. HBO confirmed last week that it has developed its own technology stack for HBO Go and works with BAMTech for HBO Now.

 

Last week’s DirecTV Now launch got off to a bit of a rocky start. While the speed and consistency of the service seemed to vary device to device soon after DirecTV Now’s debut, the service’s first evening saw subscribers head to Twitter to lodge complaints about login troubles, browser compatibility problems, long waits for customer service representatives and error codes, including false messages that customers had reached their streaming limit. (DirecTV Now allows up to two concurrent streams per account.)

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