A really insightful instalment in our series of interviews anticipating the Video Over LTE Summit – co-located with the LTE World Summit (23-25 June, Amsterdam RAI). Today we talk video-over-LTE with the perpetually acute Aditya Kishore, founder and principal analyst at Diametric Analysis.
IP&TV News: Hi Aditya. Why is it such an important time for video over LTE?
Aditya Kishore: It’s the confluence of network & device technology and consumer behaviour that is occurring now. LTE increases network capacity and allows for downstream bitrates that can support higher quality video. New video technologies such as HEVC and ABR streaming allow for better end-user experiences. And larger screen, higher resolution smartphones and tablets offer improved viewing on mobile devices. We know it’s having an impact: video consumption on mobile devices is growing rapidly and video already accounts for the majority of mobile data traffic on most operators networks. As LTE penetration grows, mobile video QoE is improving and this in turn will feed consumer demand, creating new opportunities for mobile video services…and also challenges, in terms of managing the traffic and maintaining QoE.
What opportunities does the climate present?
Multiscreen distribution is already a necessity for most video distributors, at least those catering to a broad market. Today the vast majority of video consumption is still delivered via dedicated pay TV networks (cable, DTH etc.) or fixed-line networks, whether directly wired connections, or via Wi-Fi. Improved connectivity and coverage coupled with better video-oriented mobile devices will enable wireless video (via cellular networks) at reliable high quality. As such, there may be opportunities to create new services, advertising formats and new premium pay models to try and monetize this trend, based on user location and lifestyle. At a minimum it will provide more information on consumer usage behaviours and help drive adoption of LTE packages.
What about challenges, particularly from the perspective of operators?
There are two main challenges: Monetization and traffic management. In my previous answer I talked about opportunities to create new pay models. There certainly is an opportunity, but there is little clarity or agreement on what it might be. And in a sense, we’re having the same discussions we had when 3G showed up a few years ago: should operators launch their own video services, can they charge for them, will advertising generate new revenue etc. etc.. Until there are clear answers to these questions, monetization continues to be a challenge.
Secondly, video traffic on the network is growing. LTE will create new capacity, but will also drive demand which will exponentially drive traffic increases. So how do you manage to maintain QoE in the long term without breaking the bank, especially when the revenue opportunity is unclear.
What avenues are open to help networks overcome these?
There are a mix of tools and measures available. Some operators are using pricing tiers and caps to manage demand while they ramp up capacity. It appears to have its uses but is a rather blunt instrument. Policy and DPI allow for improved understanding of the network, and better, more targeted and dynamic measures to manage network traffic. As such, they are more precise measures for specific users and times. Caching is another technology that is being implemented, and there are ongoing discussions now about finding ways to move the caches past the Gi interface, deeper into the network. Break-out solutions and small cells are also another potential strategy for relieving the network, and offloading highly popular live events to LTE broadcast or multicast is yet another.
The long term key to challenges is often simply finding a way to pay for continued network investment. I suspect the solution here will not be an operator controlled one, at least not entirely. The TV/Video business is built on a series of relationships between content producers, distributors, syndicators, pay-TV providers, advertisers and even device manufacturers. An eco-system solution has to be developed for monetization of mobile video. This is a different approach for many operators, more comfortable with a simple, traditional vendor-operator value-chain.
What do you think will prove the most appealing solution?
For operators, I think the most appealing solutions at the moment is to keep expanding network capacity, and push vendors to create more efficient delivery and management solutions. That’s how telecom has generally functioned as an industry. I don’t think that’s the long term solution though. The eco-system approach, building the necessary relationships with key players and developing the right business models and revenue shares – that would seem the more pragmatic one.
What are the wider implications of this topic for the connected entertainment ecosystem?
I think we will probably see a lot more out-of-home viewing of video content, but I’m not sure that will dramatically change the eco-system. I think it’s one more pressure point among a growing number, adding to the forces pushing for change in the in the way that content is commissioned and licensed for distribution. There might be an impact on advertising, as additional viewer information and location data could be used to create new formats.
How do you think video over LTE will differ in five years from how it is today?
There will be more “true” mobile consumption of video, and I suspect there will also be a small but important percentage of mobile video being broadcast. I think we will also see more new applications, integration with location-relevant services and more innovative live coverage enhancements. It will also probably facilitate cloud TV adoption, so we’ll see more TV services – and more elements of a TV service – run from the cloud.
Aditya Kishore will be appearing at the Video Over LTE Summit – co-located with the LTE World Summit (23-25 June, Amsterdam RAI)