S01E07: Game of Streams (Trends in the streaming video world)

Our Media Solution Consultant, Magnus Svensson, is sharing his reflections from the online streaming industry in this post. This is part of a monthly series so make sure to follow us here if you don’t want to miss an episode.

The trend that the big pay-tv companies lose subscribers for traditional broadcast continues, but the reduction is not as quick as I earlier expected. But the trend is still clear, subscribers cut their cords or at least reduce their subscriptions for their traditional TV package. Online skinny bundles take one part of the subscribers that reduce their subscriptions, but that math doesn’t add up which means that some subscribers don’t compensate their reduction with online channel subscriptions.

This month I have noticed two new initiatives that I think will be interesting to follow. One is ZoneTV, that will use AI to build customized playlists of internet videos much like a scheduled TV channel. The other is New TV, the tentative name for Jeffrey Katzenberg’s idea of short-form mobile TV service for millennials with premium content. More of both later in this post.

Low-latency streaming update

Periscope engineering team published a report on their initiative for low-latency streaming. As Periscope is a live streaming application where viewers interact in real time with comments, latency is very important. They have introduced what they call Low-Latency HLS (LHLS) with two fundamental differences from standard HLS. One is using HTTP/1.1 Chunked Transfer Encoding. The other is that segments are advertised in the live HLS manifest file before they are available. Both will still allow the use common HTTP CDN infrastructures.

This is very similar from what we earlier have seen with MPEG-DASH and low-latency CMAF chunks. The results from Periscope was very positive. With LHLS, they found a way to meet their latency requirements at the same time as they achieved scale. It was even seen favorable compared to the former RTMP solution.

I don’t think it will be long until we see more of these low-latency deployments using small chunks and HTTP Chunked Transfer Encoding. Both for HLS and MPEG-DASH.

AI driven TV solutions

As indicated earlier, later this fall we will see the introduction of ZoneTV. In collaboration with Microsoft and Ooyala, ZoneTV will be a customizable suite of linear TV channels. Microsoft Cognitive Services will handle the metadata and with artificial intelligence make recommendations and Ooyala will ensure that the videos are properly displayed on the TV.

The ZoneTV service, which is available on for example Comcast, DIRECTV, CenturyLink, Telus, and Bell Canada, will be offered for $6.95 a month. Initially, it will aggregate videos from established content companies such as Esquire, Vogue, Wired, and NASA and it will include genres such as fitness, cooking, sports, and children’s programming.

Videos will be lined up very much like a scheduled TV channel. The service will automatically extract and analyze the metadata to identify genre and content sentiment, translate and extract information from speech and text and integrate subscriber analytics. The automatic process will reduce errors in metadata and remove manual intervention, which in turn will increase scalability.

Skinny Bundles and the shift towards online streaming

Cord-cutting or Cord-saving continues, although not at the pace that has been predicted. In the US, the four big pay-tv operators, Comcast, AT&T, Charter and Verizon all announced subscriber losses during second quarter subscriber but not as bad as you could expect. We see the same trend in Sweden and UK and we could expect the same in other parts of the world.

I still believe that SVOD services together with skinny streaming bundles will replace the big cable or satellite channel packages. SVOD services are already common in most homes, and the skinny bundles will increase as soon as the packages are more flexible (both in terms of price and content), the user interfaces a bit more modern and the reliability is equal to traditional pay-tv

The streaming technology in combination with the cloud infrastructure has also made it possible for small niche channels/services to enter the market. I believe we will see a huge increase in small niche services that will offer targeted content (both live and on demand) in specific areas. It could be a specific interest like wine or beer tasting, a minor-league sports team or country specific content for expats.

The technology is in place for this to happen, it just needs to be simple enough for anyone to quickly get started.

To watch out for the coming months…

As earlier mentioned, Jeffrey Katzenberg, former CEO of DreamWorks Animation, plan to start a new service targeting mobile screens. The new service, that initially is called New TV, will consist of content targeting 18- to 34-year-olds with short-form video series with high-quality productions. Imagine 10-minutes episodes of a drama with the quality that you normally get from the big SVOD services. Excellent to follow when commuting and a very smart move that more will follow.

Finally, I need to mention the resent announcement that Discovery Communications will acquire Scripps Networks Interactive. This will for sure be interesting to follow as this gives Discovery better possibilities to deal with pay TV and streaming platform operators and opens for creating their own “skinny bundle” streaming service.

Magnus Svensson is a Media Solution Consultant and partner at Eyevinn Technology. A Swedish consultancy company specialized in streaming, VR, and gaming.

Follow me on Twitter (@svensson00) for regular updates and news.