The TV industry is desperately trying to grow revenues while reducing costs and cloud and SaaS looks like a potential answer to both. In part 2 of this IBE Market Brief we look at the types of cloud and SaaS services available to the TV industry and examine the key criteria for implementing a move to an as-a-service model, some key questions to ask along with a real world example to highlight its potential.
What cloud and SaaS services are available to the TV industry
Before diving into the cloud its worth separating the types of services on offer and how they relate to the TV sector. The simplest to grasp are Software as a Service (SaaS) which delivers an application to the operator through a web browser client or as a web connected application or process. Effectively, the software is running remotely in a third party data centre and the operator can load content or other data to utilise its features and functions. Examples of SaaS for the TV industry include:
- Media Asset Management
- Encoding & Transcoding
- Video Editing
- Content Delivery Networks
- Media Consultants
- Media Indexing
- Live Broadcasting
Lower down the stack we have Platform as a Service (PaaS) which is essentially a mixture of compute, storage and bandwidth resources to develop an application or delivery of a process. Unlike a SaaS, the PaaS is an environment with support for specific sets of programming languages or development plug-ins. PaaS often also includes components for application development such as databases, file sharing, scalable storage and other functionality to ease the development and integration process. In essence, all of the above SaaS list can be built in a highly turnkey fashion in a PaaS and potentially used by the operator but crucially, the PaaS can scale as demand grows on demand.
At the lowest level of the model is Infrastructure as a Service which is typically a blank canvas that provides networked computers running in a hosted environment. This is the equivalent of renting a chunk of a virtual data centre and using this infrastructure to build an application or process. IaaS platforms include
- Amazon EC2 (elastic cloud compute)
- Google Compute Engine
- Microsoft Azure
Private vs. Public
Before you diving into cloud, it is worth looking at the two fundamental approaches of private versus public cloud. The labels are a little deceptive but in essence a public cloud like Amazon or Google is generally like public transport, everybody shares the same infrastructure with little control of the underlying technology. However, where you want to go is up to you. A private cloud, such as services offered by TV industry specialist can potentially give you more control, privacy and allow you to make significant changes to elements of the underlying physical infrastructure and processes. To use the transport analogy, a private cloud is akin to hiring a car with a chauffeur.
Factors for defining a successful SaaS / cloud transition
The questions you need ask before selecting a service provider can apply to both private/public camps but with larger “faceless” clouds like Amazon or Google, actually getting a direct and specific answer is much more difficult. Before selecting a cloud or SaaS supplier, you need to pare down to a sensible shortlist. A key question to ask is “What credentials do you have to offer cloud or hosted services?” Unfortunately, at the moment there is very little to independently certify the quality of a cloud service other than the trusted reputation of the vendors.
Probably the most impressive sounding is the ISO 27001 which is an Information Security Management System standard that evolved from the British Standard BS7799 for managing information security. ISO 27001 is used in conjunction with other standards from the ISO 27000-family, such as the ISO 27002 that contains some audit guidelines. ISO 27001 is often seen a comparable to SAS 70 which is an auditing standards run by the American Institute of Certified Public Accountants. SAS 70 is common in the US and starting to spread to Europe but it is not a general stamp of approval to guarantee that everything is secure and all procedures are perfect. Even an audited SAS 70 provider gets to choose which bits they want audited. It always good to ask for an independent audit report or verifiable testimonial from a number of current customers as just a logo of a well-known brand on a website is no indication that that customer is still current or even happy. The TV industry has a growing number of adopters of cloud yet case studies are thin on the ground, especially where hard data is concerned.
Creating a shortlist of potential suppliers
Before getting into the specifics of the technical infrastructure, just like any other supplier, it’s wise to understand the business as whole, its pedigree and the people who you will be to dealing with. Even creating a short list can be a daunting task. Potentially a good starting point are industry groups; the Cloud Industry Forum (CIF) has created a Code of Practice for Cloud Service Providers which includes organisations that offer customers remotely hosted IT services of any type. These services include, but are not limited to, multi-tenanted services accessed via the Internet. However, this is a UK centric group while the US focused MSPAlliance MSP/Cloud Verify Program is similarly slight in scope and both have almost no services directly applicable to the TV industry instead focusing on enterprise computing. Self-certification is also the norm with these groups which makes it hard to accurately judge claims.
At the moment a lot of small firms are announcing themselves as cloud/Saas providers and in many cases, they are simply building their own apps or combing third party systems and using IaaS/PaaS to host the resulting services. A key point to consider is the financial security of the company as if the service fails or the company goes out of business, getting data back or migrating over services can be a challenge. It is wise to seek details on the financial pedigree or the indemnities of a supplier. This comes down to some fundamental questions like Who owns the machines? Who owns the data? And where is my data is stored? These must be established as if a cloud vendor doesn’t own the machines, or shares them with other vendors, then the physical security of the data can’t be guaranteed. The worst case scenario is if a cloud provider goes bust, there may be issues for a client wanting data back from machines now under the ownership of receiver.
The infrastructure – what is it built on, where is it located and validating security?
To deliver the economies of scale, most “clouds” are delivered from a virtualised compute infrastructure and shared storage pools. The choice of Microsoft, VMware or Citrix as the main vendors is somewhat irrelevant if you are paying for a vanilla service. To give an analogy, you probably don’t care if your electricity is coming from a nuclear power plant, coal or gas turbine providing the supply is reliable and at the price is right. However, the geographical location that your service comes from can be critical. For example, customer billing or content holding is impacted by EU rules which says that personal details on EU citizens are not allowed to be stored outside of the EU. Security is another area of concern, particularly when trusted brands like RSA, Sony and even defence contractors like Northrup Grumman have been hacked. Good layered security and properly trained staff are important. When dealing with licensed content, it may be a requirement that the Cloud or SaaS provider run certain levels of encryption or even that content deals explicitly allow storage in a third party cloud.
Service delivery and termination
The cost of any service is of course a key consideration but understanding real pricing is not as straightforward as it seems.
What’s included in the price? Does it include setting the system up and content loading?” as often this is not the case, and a transparent pricing structure can often be the best way to avoid awkward sticking points when it comes final contract negotiations. It is worth discussing the minimum contact period that is often 1 to 3 years and break clauses to understand what you can do exit. It is worth asking service providers to describe the process and the potential costs to remove my data from your environment should you decide to exit the contract.
Example of SaaS/Cloud in the real world
The largest cable system operator in Hungary, UPC Hungary is a subsidiary of Liberty Global Plc. UPC Hungary provides video, voice and data to 1.1 million customers in Budapest and in 22 other major cities and towns. UPC pioneered advanced services in Hungary with UPC Direct, the first interactive digital TV service in the market. Today, UPC Hungary has 910,000 video subscribers, 408,000 of which are digital cable subscribers, on a network that is almost entirely two-way capable. Digital services are available through standard definition or high definition set-top boxes, as well as to televisions equipped with a CI Plus conditional access module.
Like all pay-TV operators, UPC Hungary has faced the challenge of growing customer demand for online video. Cisco VNI estimates that IP video traffic will be 79 percent of all consumer Internet traffic by 2018. Content is delivered almost exclusively to handheld devices, gaming consoles, Smart TVs and other connected devices — increasing pay-TV broadband service usage, while decreasing perceived value of pay-TV video services.
Pay-TV operators have sought ways to counter this trend by bringing online video to the television as part of the pay-TV bundle, transforming online content from a competitor to a service differentiator that increases content availability and subscriber satisfaction. Typically, operators’ strategies have involved replacement of customers’ existing set-top boxes with more expensive, IP-capable devices that can support online video user interfaces and online content. For example, a small number of
operators — notably Liberty Global’s Virgin Media in Europe and Suddenlink Communications in the United States — have made the Netflix subscription video-on-demand (SVOD) service available in limited numbers to customers who have purchased TiVo set-top boxes.
UPC Hungary recognized that taking full advantage of the game-changing potential of online video would require making such services available at scale via its managed network. Rather than requiring the significant expense or the lengthy time-to-market of deploying an expensive new set-top box in every home, UPC Hungary sought a solution that would overcome resource limitations in existing set-top boxes to resolve multiple technological hurdles. These included the vast majority of existing STBs simply are unable to support the rich user interfaces of online video brands and content Protection issues where digital rights management solutions used by many online video providers , such as PlayReady and Widevine, are incompatible with the conditional access systems used by UPC Hungary and other cable operators. In addition, existing pay-TV STBs’ need for video to be delivered in MPEG-2 or H.264 formats, rather than the adaptive bitrate streaming protocols used by online video.
To bring online video experiences to existing set-top boxes, UPC Hungary opted to virtualize the STB functionality in the cloud. Using the CloudTV™ StreamCast software platform from ActiveVideo, UPC Hungary can render online video user interfaces and conduct media manipulation in the cloud, and deliver both the UI and the online video as a single video stream to any STB.
Working with YouTube and Metrological, a provider of interactive television applications, UPC Hungary has enabled full access to the YouTube Leanback experience that is optimized for television. The UPC Hungary service enables search, discovery and navigation using the existing HTML5 YouTube Leanback interface, as well as access to the complete library of YouTube content. The service currently is a value-added offering, rather than a source of new revenue.
Subscribers tuning to the YouTube channel are connected to a cloud-based browser that points to the YouTube Leanback URL. A thin client delivered via a simple software download to existing set-top boxes maps Up, Down, Left, Right and Enter key presses from subscribers’ STB remote controls to the cloud. Subscribers use these keys to navigate the YouTube Leanback UI, providing Web functionality in an environment with the quality and reliability of the television. When a video is selected, it is streamed immediately from YouTube servers.
This cloud based approach has several advantages. Firstly, by rendering the application interface in the cloud, rather than on the device, UPC Hungary is enabling a uniform user experience to every subscriber, using the STBs already in homes.
UPC Hungary is using CloudTV StreamCast’s execution of video pass-through or real-time hardware transcoding in the cloud, ensuring compatibility between online audio and video formats and UPC Hungary’s MPEG2 and H.264 STBs. This cloud-based stitching of both YouTube video and the cloud-rendered user interface provides UPC Hungary viewers with a single-stream television experience that retains all of the interactivity of the Web.
Benefits and costs
Using the cloud, UPC Hungary quickly and cost-effectively scaled availability of the YouTube service. The service was launched to 200,000 high-definition STBs in May 2014, and since has become available on 320,000 additional devices, most of which are standard definition STBs. The bandwidth required is equivalent to that of a standard VOD channel. UPC Hungary has stated that the hardware cost of the service is “a very small addition,” less than 1 Euro per set-top box.
Other benefits of the cloud-based solution include reduced expense and faster service velocity for updates, which can be effected once in the cloud and delivered immediately to all devices, as well as the ability to ensure a uniform experience across every device as new STBs or CE devices are installed in the future.
Finally, the same platform can be used by UPC Hungary to deliver online video content, including encrypted content, from other SVOD providers, using capability that bridges DRM-protected online video content to the conditional access systems or specific DRM used by pay-TV providers. It was announced at IBC 2014 that HBO Europe intends to use a cloud-based platform to deliver its HBO GO service to full footprints of existing STBs in eastern and central Europe and the Netherlands.
Since the launch of the YouTube service in May 2014, customer usage has far exceeded expectations. At the last count, 68% of UPC Hungary subscribers have tried the service, and of that number, 83% have returned for additional views. In September of 2014, UPC Hungary announced that customers were viewing more than 1 million minutes per day of YouTube content during the first three months of availability on the television. UPC Hungary has repeatedly stated that the average engagement length of a YouTube session is 45 minutes.
There are a growing number of SaaS and cloud providers serving the TV industry. The technology for many vendors is seen as a great leveller allowing small innovators to compete with industry heavyweights and in the mould of many enterprise equivalent such as Salesforce, NetSuite and Dropbox; there is a hope and possible valid expectation that as-a-service can deliver benefits for customers and new business opportunities and profit for suppliers.
The main issue is that the TV industry is still much smaller than the wider enterprise markets and the specialisation in tasks involving content, playout, STB’, CA and other mechanisms for service delivery are more rigid and often hardware intensive. This boundary is changing. As the example shows, taking a small project and testing it in the cloud is a great way to proceed. In addition, some processes that are administrative in nature such as billing, CRM and customer support are easier to move to cloud based functions which are already well proven in the wider enterprise world. Finally, do the maths. That means before jumping into Cloud/SaaS work out the real cost, over say a 3 year period. Work out the cost of processes or task in house and include existing and future equipment CAPEX, development, support and staffing. In some areas, for some organisation especially new OTT vendors, the cloud is going to be cheaper and faster to deploy. For entrenched incumbents with extensive investment in technology, the cloud may not be the best option yet.
If we look at the current landscape, many of the traditional equipment vendors supplying the TV industry are heading towards software positron based on virtualisation and as-a-service delivery. The evolution seems inevitable. As IP overtakes legacy connectivity protocols, a cloud/SaaS based future is an almost certain outcome – making the transition requires preparation and picking the right element to move across.