By: Steve Sklepowich, VP Marketing, Vantrix
Managing churn by retaining subscriber engagement in an age of on-demand, anytime anywhere content is a key challenge
for operators today. Service providers are in the midst of a steady evolution of content viewing preferences, which are moving away from traditional live linear models to video-on-demand models spanning time-shifted, multiscreen, network DVR (nDVR); catch-up TV; and start-over TV.
Consumer research by Viacom showed that “98% of TV Everywhere users say TVE adds value to their pay TV subscription, (…while) 93% say they are more likely to stay with their provider due to TV Everywhere.” Operators must provide good OTT services as a prerequisite to regaining control of the subscriber’s entertainment hub, and is the key to ensuring that operators can reclaim traffic that is currently being lost to online service providers or other entertainment destinations.
According to a recent report from Frost & Sullivan, operators should build out live-to-VOD media processing capabilities at the network edge in order to cope with the explosive growth in time-shifted and place-shifted consumption of live, linear content. Saying it is no longer an option, the report advises operators to plan new or expanded deployments of OTT content delivery infrastructure to minimize churn, maximize subscriber engagement, and meet projected demand volumes for time shifted content.
To date, the most popular approach for multiscreen content transcoding has been just-in-time-packaging (JITP), driven by relatively low-cost storage, manageable content volumes, and expensive live transcoders. However, soaring content volumes and growing profile complexities on the one hand, and increasing transcoder densities and falling transcoding costs on the other, are shifting economics in favor of just-in-time-transcoding (JITT). (JITT is actually “JITT-P”, where packaging immediately follows transcoding.) This is particularly relevant to network DVR deployments where operators are required to maintain one copy of recorded content per user.
The report, “The business case for shifting live-to-VOD video transcoding to the edge with just in time transcoding” by Frost & Sullivan, details the CAPEX and OPEX economics of JITT deployment as compared to JITP deployment. Financial models show that when considering a steady audience with consistent consumption of time-shifted linear content, the five-year total cost of ownership (TCO) of JITP infrastructure is nearly twice that of the JITT alternative since the CAPEX for JITT transcoders and the reduced storage that they enable is 30 percent lower than the JITP alternative. Similarly, the models estimate a 40 percent annual OPEX savings because volume consumption in this use case is predictable and capacity can be carefully planned to optimize utilization.
“To cope with projected volumes of sustained 24×7 live-to-VOD traffic, operators need to build out adequate transcoding capacity within their network,” said Avni Rambhia, Principal Analyst, Digital Media Group, Frost and Sullivan. “Our analysis shows that for continuous traffic patterns, the 5-year TCO of JIT transcoding at the edge is approximately half that of the prevalent just-in-time packaging approach, thanks to recent innovations in ultra-high-density transcoders running on COTS hardware.”
In the report, analysts point to the Vantrix Media Platform (VMP) as an example of an ultra-high-density transcoder enabling JITT scenarios for operators. VMP is a software-defined solution that enables video service providers to cost-effectively deliver high-quality, multiscreen video. VMP can be deployed on ultra-high-density turnkey video processing appliances, or on standard servers in private or public cloud scenarios.
With this approach operators are able to combine efficient IP conversion, ultra-high-density transcoding, adaptive bitrate (ABR) packaging, encryption and streaming into a modular, virtualized solution. The result is a highly flexible and cost-efficient way to give consumers the high-quality video today with a future-proof feature set. Customers can achieve up to 80 percent cost reduction per stream by deploying Vantrix Video Processing modules on industry-leading 4.3U, 2U and 1U appliances. These turnkey solutions also reduce footprint by 95 percent, resulting in dramatic CAPEX and OPEX savings.
Frost & Sullivan found that when the cost of a JITT transcoder is weighed against the OPEX savings generated over a five-year period, the return on investment is over 200 percent. Another way of interpreting these findings is that for the same investment levels, JITT allows operators to build out significantly higher capacity and deliver much better quality of experience to subscribers.
Factors favoring JITT include judicious and optimized use of relatively more expensive storage as well as strategic reliance on state-of-the-art, ultra-high-density, high-performance transcoders. Embracing this powerful new architecture will put operators in a strong position to outpace competition and delight customers now and in the future.
The full report can be downloaded from Vantrix.
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