Duncan Potter, CMO at Swedish video server specialist Edgeware, on the extra revenue opportunities out there for telcos looking to enter the CDN market, the integration challenges a telco might encounter along the way, and the need for multiple teams within a telco to work together in new ways in order to overcome them.
What advantages are there for telcos thinking of offering wholesale CDN capabilities?
There are several advantages for telcos in offering wholesale CDN capabilities:
1/ The telco can focus on doing what telcos do best: selling bandwidth and services to subscribers. However, in the case of CDNs, the telco is actually selling access for its subscriber base to a specific set of content.
2/ It allows the telco to monetize the bandwidth that is currently only funded by subscriber bandwidth revenue.
3/ It also allows the telco to sell a range of premium services based on bandwidth and additional features without the need to become a content provider in its own right.
What additional revenue opportunities and strategies are there for telcos in the CDN market?
The additional revenue opportunities of offering premium services that allow subscribers to access high-quality video direct from the content providers continue to expand.
Other additional revenue opportunities include second screen services (dynamically linked content on a companion screen), multiscreen additional viewing opportunities, mobile video access, specialised QoS access, and allowing home viewers to dynamically control priority to premium services.
However, the greatest revenue opportunity of all is probably personalised ad/pre-roll/b-roll insertion at an individual subscriber or household level.
Can you tell us about some of the integration challenges a telco might encounter when implementing a CDN offering to provide on-demand video and live TV services?
The integration challenges can be divided into multiple groups:
1/ Compatibility with content provider interfaces – while this is becoming clearer, there is still much work to be done to clearly define the interfaces required to cleanly access, ingest, control and report on content usage.
2/ Storage deployment – it is highly likely that to ensure a premium service, the content will need to be cached in a “premium-friendly” way. This means the deployment of sophisticated video caching technology to ensure that the video is consistently delivered at a premium level despite (in a multiscreen) environment, the client being in control.
3/ Premium service assurance.
4/ Reporting aggregation – reporting to the content provider for billing purposes is a natural extension of the current billing mechanisms but does require an additional level of video stream session reporting to be integrated and reported.
How can different groups within a telco address these challenges?
The biggest challenge within many telcos may be that multiple groups which have traditionally remained separate may need to collaborate closer to ensure success.
For instance, it is likely that the infrastructure operations team will focus on overall delivery of all web traffic rather than focus on video as a premium service.
In a straight OTT environment, with the telco purely selling low cost bandwidth, this is a reasonable approach as the focus must be on cost saving and infrastructure optimisation.
However, in a wholesale environment, content providers are expecting a premium approach to their content which will specifically mean a different strategy for ensuring premium video content delivery.