Smart moves

Smartphones and tablet devices are responsible for a resurgence in mobile video services. Graham Pomphrey looks at the remaining challenges.

The potential for mobile TV to break into the mainstream and deliver sizable revenues to operators and content owners alike has long been debated. For many, it was seen as an entirely logical evolution – everyone owns a mobile phone and would surely relish the chance to watch their favourite programmes wherever they wanted. But with mobile broadcast services falling by the wayside, in Europe at least (see sidebar), and issues surrounding the screen sizes of most handsets, it looked for a while that mobile video would be at best a niche market. However, the advent of smartphones, especially the iPhone, and more recently tablet-style devices including the iPad, has moved the industry a step closer to commercially viabile mobile video business models.

Network issues

Fearghall Kelly, vice-president media solutions ioko, a digital media systems integrator, has seen two key trends in particular that sheds light on the re-emergence of mobile video as a potential game changer for pay TV providers.
“Firstly, the advent of devices with improved back lighting, larger screen sizes and higher resolutions has greatly reduced eyestrain, enhancing the user experience and increasing viewing hours,” he says “Secondly, tablets and smartphones can utilise Wi-Fi connections instead of 3G telephony networks. This is crucial from a power and connection perspective as a pure Wi-Fi connection makes for a better battery life, more stable connection and no 3G data charges. As a result, there will be considerable growth in the usage of home broadband for WiFi connections in tablets as consumers continue to diversify the viewing experience in the home, making this the area where mobile video usage will prove the most commercially viable for content owners.”
The issues associated with 3G networks and their inability to cope with high bandwidth video and large numbers of users in a ‘cell’ trying to access data are well-documented. But without mobile broadcast networks in place, operators have continued to pursue 3G video streaming services, with the hope that WiFi-enabled phones and 4G networks, set to roll out over the next few years, will eventually boost take-up. For now, WiFi coverage is limited and 4G rollouts will take time.
The question remains whether 3G networks work for live TV. In the shorter term, some, like Envivio’s marketing vice-president Boris Felts, believe that despite its somewhat significant shortcomings, there will always be a market for certain live events to be watched on mobile devices, regardless of the quality. And that means a strong reliance on 3G. “The 3G networks are not really good enough for video streaming given then size of the screens today but at the same time, live events will always drive uptake. Soccer games are driving usage and these events are where we’re seeing the highest network peaks,” says Felts. “In the absence of WiFi, there is no other solution for live events, and in these cases most people care more about the score and being informed than the quality.”
A key technology driver to have emerged that enables a better quality of experience for mobile video users is adaptive bitrate streaming. The technology works by dynamically adjusting a video’s bitrate to match the quality of the network and the end device at any given time. “The underlying principles of these [adaptive bitrate streaming] protocols is that they enable the client to make the decision about the quality of content that it can consume based on the available bandwidth. The device decides what it can handle,” says video technology company Edgeware’s chief marketing officer Duncan Potter.

Previously, viewers were frustrated by lengthy start times, and waiting for buffering to finish. “They were further hampered by the inability to move backwards and forwards through the video, and if the connection quality or type of connection changed as they moved around, the video would become choppy or stop altogether,” says Alex Gibbons, director, digital media Europe at content delivery network provider Akamai Technologies. In short, they were not able to get a TV-like experience on their small screen device. “Adaptive bitrate technology has overcome the primary user experience problems that have long hindered the mobile audience. With these issues being addressed, mobile video uptake is now able to grow with more confidence as operators and content providers know that mobile users can now enjoy a better quality experience,” adds Gibbons. There are four main proprietary variations of the technology on the market – Microsoft’s Smooth Streaming, Apple’s HTTP Live Streaming, Adobe’s Flash and Widevine – giving the industry a consistent set of protocols that can be used across pretty much any mobile device, and making transcoding video for mobile devices easier. “The most effective solution can only be better networks, but we are seeing a lot of demand from operators for these kinds of video optimisation services,” says Yuval Fisher, chief technology officer at video technology company RGB. “There’s no point streaming a very high quality video to a low resolution screen so adaptive bitrate streaming can mitigate the problem to some extent, perhaps saving something in the region of 30-40% of bandwidth.”

 

On-demand and catch-up

With the downfall of mobile broadcast technologies, streaming remains the only viable solution for live video delivery. But forces are underway that could leave on-demand and catch-up services proving more popular than live for mobile use.  Viewing patterns are slowly evolving and online catch-up services like iPlayer are proving popular and will work well on mobile devices with a good WiFi connection. In addition, on-demand services that involve content being downloaded to devices means that high quality videos can be watched at any time and in any place. Harmonic’s director of telco solutions Thierry Fautier is sceptical about live, or ‘appointment’ TV on mobile devices. He believes people that are on-the-go will want to watch specific programmes at their own convenience, rather than being bound by schedules, which could play into the hands of on-demand and catch-up services. “Network coverage places huge constraints on mobile TV services, which is one reason why appointment TV will not work. Another is that people who are on-the-go will not always be in a position to watch a programme at a scheduled time. The business model is very thin.” Consumers are more likely to be prepared to pay for downloadable content, which avoids any network problems as long as the device can access a good WiFi network. “It could work by the device side-loading preferred content automatically as soon as it becomes available. Or the user could download content at the airport before a flight, for example. You certainly can’t stream content while you’re flying.”
Side-loading, where content is downloaded to a device, takes advantage of the reasonable storage capabilities of new smart phones and tablets, and home WiFi networks. It has already proven popular with iTunes’ aficionados. Fautier is not the only one that sees the potential for on-demand mobile video. “For VOD, whether you rent it or it’s a catch up service, side-loading has a lot of potential,” says Felts. “You don’t need to watch the content right away and you are free from any network limitations.”

Ultimately, Fautier says, video quality is the single most important thing for end users and they will only be willing to consume, and pay for, services that are delivered above a certain level of quality. “In addition, the user experience must be seamless, whether the service is being delivered via 3G or internet,” he says.

 

Business models

The growth in popularity of on-demand services, especially catch-up services, whilst providing arguably the best quality experience for end-users, will cause headaches for operators: firstly, they must find a way to monetise these services and, secondly, third party catch-up services can use up huge amounts of bandwidth with little return for operators.
Aside from developing more efficient networks, the technology behind delivering quality video to mobile devices is sound. What is proving more of a challenge is the identification of an optimal revenue model. Stephen Petherham, marketing director of multiplatform software company and payment specialist MGt says that revenue models for mobile content will increasingly be a blend of ad-supported and pay. “The pay pillar will in turn be a blend of increasingly sophisticated subscription models, including pay-per-daypart, season passes, pay-per-multiday event, not just monthly or annual subscriptions, as well as per transaction payments including very low price-point micropayments,”
However sophisticated the billing system might be, Petherham says the key to driving online pay revenue is to better understand the consumer. “To effectively monetize content across platforms, operators need to deploy a truly multi-platform payment mechanism – but, and it is a big ‘but’, the payment platform must do much more than just service a payment for the operators to be able to fully understand their increasing multi-platform customer base.  There is a real requirement to deploy a sophisticated payment platform that can pass rich, real-time transaction information back to the operator.”
One interesting area that could impact the potential for mobile video services on tablet style devices are licensing fees that are much higher than for smartphones, according to Jan Olin, European managing director of mobile TV specialist MobiTV. “Sales of tablets are booming, so it would be safe to assume that broadcasters would be excited about the influx of new devices with video capabilities and screen sizes of up to 11 inches.” Not so, he says. “Broadcasters have responded by slapping a bigger price tag on content licensing for iPads. In our experience it’s to four times more expensive than licensing content for a mobile phone.” Broadcasters are concerned that the emergence of tablet devices, like the iPad, will cannibalise people’s viewing of cable and satellite TV, he says. As a result broadcasters are charging the same amount for tablet applications as they would for regular TV content. “Whereas they see video and live streaming on a mobile device as a complementary service, tablets are perceived as potential competition to the home TV,” says Olin.

OTT threat for operators

What is becoming clear is that WiFi is beginning to play a major role in mobile video consumption. The proliferation of networks in homes as well as public locations including transport hubs, restaurants and offices, combined with better client devices, means that the already burgeoning demand for video delivered online is likely to be boosted by mobile usage. The strain on networks will cause problems.
As with the wider pay TV industry, no discussion about mobile TV would be complete without looking at the threat posed by OTT services to pay TV operators, ISPs and mobile operators alike. “Operators must realise that there now exists a window for them to offer a good quality service on mobile devices. But they’ll have to get their act together before the likes of Hulu and Netflix eat their lunch,” says Harmonic’s Fautier. Take iPlayer – people might prefer to make use of this service than subscribe to a pay TV operator’s branded, premium mobile TV service. On the other hand, mobile operators, and WiFi providers, are wary that such services are bandwidth hungry without providing any discernable revenue stream. According to Edgeware’s Potter, optimising the video delivery network, by caching at the edge of the network to keep pressure away from core network, can help to alleviate congestion within a network. This kind of architecture is being introduced by IPTV operators delivering on-demand content and could be equally applied to the delivery of video to mobile devices. “We’re seeing that a lot of operators are starting to embrace the whole idea of distributed video delivery. That means they have a much more predictable load on the core network,” says Potter.
Going beyond this architecture, with an eye on trying to monetise the bandwidth being used to deliver third-party video services, Potter says operators are starting to consider developing their own content delivery networks (CDNs). They are, after all, in control of the final delivery to end-users. “All of a sudden, people aren’t watching the operator’s services, they’re watching a third-party provider delivering content over the operator’s network. The challenge is that the operator has to work out how to monetise it – if they can at all,” he says. “Interestingly, we’re likely to see that operators are limited by what they can charge for all the content going over their network based on just the bandwidth. It’s all well and good for the content providers to pay the likes of [content delivery network provider] Akamai to push that content across the network and then expect the operator to provide that based only on what the operator can charge for bandwidth. It’s not going to work.”
Potter says that Edgeware is seeing a lot of demand for operators to change their distributed video delivery system into a full CDN. “A properly constructed video delivery system looks just like a CDN but with a few session management and reports missing. Operators need far more granular reporting because they will need to be able to bill on it depending on the bandwidth that is being requested from a particular content provider.” At that point, they can tell the content provider that their CDN can manage and ensure quality of service, but that there is a charge for it. “That’s one of the single biggest transformations that we’re seeing now,” he says.
This is just one of many changes that is taking place in the mobile video space. But one thing is clear, the popularity of viewing content on a range of devices – PC, tablet, smartphone – across a range of networks is set to grow, despite the remaining challenges.
“I think we’ll live through the hype,” says Envivio’s Felts. “Historically, networks have not been good enough and people had bad experiences. Then came smartphones and high decoding capabilities, and with the likes of adaptive streaming, we’re well on our way to providing quality mobile video services.”