HOW PAY TV OPERATORS CAN REDUCE TRANSCODING COSTS
Updated: Jan 25, 2019
This article introduces the technical environment used by Pay TV operators for transcoding hundreds of linear channels, its increasing costs, and how the industry can learn to sustain itself with some coordinated efforts. While VOD enterprise solutions are increasing and consumption is rising steadily, linear TV is still a core offer - but costs of TV hosting platforms are skyrocketing.
Should the leaders of large Pay TV operators think differently?
BROADCASTING OVER THE INTERNET
4K is the sweet spot where streaming video meets broadcasting quality. While the visual qualities between streaming video and broadcast TV may be comparable today, the internet’s capacity to handle 4K streaming is far from sweet. The internet was not built for today’s rising volume of video traffic, estimated to make up 82% of all internet traffic by 2021.
While the quality of 4K video delivery cannot be ensured over the free internet (yet), all streaming video feeds can be adapted to suit the strength of the internet. As of 2018, streaming content in 1080p (Netflix calls this SuperHD and I call it FullHD) is increasingly common in most households not just because of the availability of the content in such formats, but also due to the steady increase in number of devices that support it.
There is a lot of 4K on demand (VOD) content available, but it is not yet the norm for much of the linear TV channels due to the high costs of content creation, hosting, delivery and devices. This is unfortunately a deal-breaker unless one has access to an affordable video hosting platform for transcoding (read on...) or a managed or private network for delivery to end-users.
QUICK GUIDE TO VIDEO TRANSCODING
Formatting video to suit streaming formats across an expanding list of devices, from smartphones to Smart TVs, is called transcoding. Transcoding of video not only formats the content to suit streaming protocols, but can also create multiple qualities of the video to suit a user’s internet strength. This can minimise interruptions by dropping Mbit stream size automatically when the internet connection weakens. While transcoding of VOD content is a one time effort for each file, for linear TV channels, this is a 24/7 job.
There are many different platforms offering transcoding software and for the sake of this article, we will assume one such platform can, at its maximum processing power, transcode up to 10 HD linear TV channels at the same time. If you choose to use such a platform to transcode one 4K linear TV channel, you should be prepared to replace all the 10 HD channels capacity with that one 4K channel. The cost of formatting a 4K channel is tenfold, at least.
Pay TV operators or distributors in every country license hundreds of linear TV channels from content providers or broadcasters. The TV channels are bundled to provide consumers with a huge choice of content, whether they ask for it or not. Many of the channels included within such TV packages are forced in by content providers who try and make a business out of niche content, even if the channel is viewed by few. However, the costs of transcoding the highest viewed TV channel or a channel viewed by none, are the same.
Many of the channels within these content bundles provided by the different Pay TV operators are the same. And yet, it is commonplace for each of these locally competing players to have a similar transcoding platform that receives TV content from the same broadcasters, preparing it separately for streaming in similar formats. This is not sustainable since there are no visual differences between one HD channel offered by two different distributors. HD is not rocket science anymore. Neither will 4K be soon.
What if common technology were shared on common platforms? What if TV streaming businesses competed only where it actually matters? And what if the industry became self-sustaining allowing for exponential growth? Reducing transcoding costs for live TV would allow investments to be diverted towards marketing services rather than costly or irrelevant technology with a short lifespan.
A unified or common transcoding platform between competing distributors is not an easy topic to manoeuvre with legal and operational issues, unless the industry backs it. Broadcasters and content providers will have to offer the source content, as well as endorse a single transcoding platform. The content can then also be managed in a more streamlined manner to suit other requirements like piracy, formats and personalised ad-replacement.
Reduced costs from multiple costly transcoding platforms helps to build a single, robust platform with the redundancy that is required for such expansive internet based services. Streaming issues have become commonplace with linear TV and live sporting events, which can anger consumers; this can be greatly reduced if video platforms and common technology investments are unified.
STREAMING IS THE NEW BROADCAST
When 4K formats become the norm for linear TV services, such streaming channels can easily be compared visually with broadcast quality signals on TV. The free and open internet can however not be compared to a broadcast or cable network that allows for the delivery of high quality video. The use of managed networks or ISPs will be able to bridge the gap between streaming and broadcast to make content delivery more digitally controllable while improving quality to noticeably better levels. A managed network is like a private highway, where one can drive a sports bike or a truck without any worries, unlike the open internet which can be compared to rush hour traffic jams, when you’re running late to an important meeting.
High quality content requires upgraded video platforms, but also needs to support new and improved low-latency technologies, which is currently the most interesting topic to follow. (stay-tuned for more blogging from me).
The “broadcasting” of video streams is a concept where digital delivery of high-quality and low-latency unicast streams over the internet, which will become a reality soon. For the industry to evolve, efforts should be concentrated. The unification of such platforms can only help to reach common goals of competing distributors.
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