"Specifically, as pay TV transitions to IP-based delivery, new obstacles stand in the way of efficiencies in content distribution at the last mile and, ultimately, an enhanced user experience." -Jonathan Zarkower, Akamai Technologies
With the explosive growth of the OTT video market comes a natural conversation about cord-cutting and what many are predicting to be the death of pay TV. While there are certainly massive changes taking place in the industry, it’s not all doom and gloom for pay TV service providers. In fact, the pay TV industry continues to grow, with an eight-percent subscriber increase expected between 2018 and 2024.
This gradual rise, of course, does not negate the growth of the streaming market. It doesn’t take a psychic to see the gap between the two closing over time and OTT catching up to pay TV, at least based on recent trends. But contrary to popular belief, there’s a future in which both pay TV and OTT can co-exist.
Making this a reality, however, will require a deep examination of consumer viewing habits and a significant pay TV infrastructure evolution. Specifically, as pay TV transitions to IP-based delivery, new obstacles stand in the way of efficiencies in content distribution at the last mile and, ultimately, an enhanced user experience. Overcoming these barriers will be a must for pay TV to maintain its competitive foothold.
Appealing to a viewer-centric world
It’s important to remember that today’s viewer often subscribes to pay TV and multiple streaming services to access the diverse content lineup of their choice. It’s not necessarily cord-cutting as much as it’s “cord-shifting.”
While consumers may come to terms with the idea of subscribing to multiple services, at least for now, they also want the flexibility to consume everything on their terms. We are living in a viewer-centric world and rightly so – after all, they foot the bill.
This means that pay TV needs to provide superb, flawless viewer experiences, while also offering consumers flexibility. And there is perhaps no better opportunity for this than with big TV moments that bring viewers together.
Major, planned events like the Super Bowl and less predictable ones like the release of the Mueller Report, often connect society as part of a larger conversation. And it’s expected that services are able to cover these big moments without any hiccups, while also offering viewers the flexibility they want.
But as pay-TV infrastructure transitions to an all-IP-based delivery model, meeting these high user demands, especially during these highly watched events, is creating new challenges.
IP delivery challenges
The transition to all-IP delivery of content that will ultimately pass through individual home broadband connections promises many benefits. However, standard IP delivery is unicast – providing one stream per viewer – and places a great deal of strain on the last-mile network infrastructure, especially during highly watched events.
What’s more, as 4K high-dynamic-range (HDR), augmented and virtual reality, and other high-bitrate content becomes more integrated with live programming, there is growing concern that networks will face even greater stress.
To help support major TV events and build in the features and flexibility that viewers desire, pay TV operators leveraging IP-based delivery commonly elect to increase network capacity through network build-outs and/or router upgrades. This approach, however, is complex and expensive, and can force viewers to pay the price.
The multicast solution
Instead of building out these complex and expensive networks, the key to driving down costs is managing existing resources more efficiently. An emerging approach to tackling this challenge is multicast-assisted adaptive bitrate (M-ABR), which uses IP multicasting to better handle large volumes of traffic, controlling content delivery costs without having to make tradeoffs for quality.
M-ABR delivery provides a foundation for delivering one stream for many viewers, versus the common unicast approach. For operators with multicast-enabled last-mile infrastructure, M-ABR significantly reduces the network resources needed to consistently deliver high-audience live programming over last-mile IP broadband while also providing viewers the flexibility to watch in the way they wish.
By reducing resources and operational costs, pay TV providers themselves are in a position to offer more competitively priced services to consumers. With M-ABR delivery, consumers can access all of their OTT programming via the set-top box, receive and pay just one bill across all services, and browse through all content with a single remote control, ultimately resulting in a better user experience. And in a world where a viewer’s entertainment bills are stacking up with endless streaming and pay TV options, affordability and improved experience can make all the difference between retaining a customer or losing one.
Simply put, M-ABR is a win-win for operators and viewers. Operators get to reduce unnecessary investments into their technology and viewers get more affordable, high-quality content that they can consume on their own terms.
A bright future for pay TV
As OTT video continues to grow on a global scale and content becomes more diversified across a number of services, the pay TV industry faces many obstacles, especially as the transition to IP delivery continues. However, there is a clear path forward; one that can allow the more traditional offering to modernize and stay relevant.
By tapping technologies like M-ABR, pay TV can meet the needs of consumers and their viewing habits, maximizing the viewer experience and reducing overall costs. In doing so, pay TV can continue to co-exist with OTT and the industry can remain optimistic about its future.
Akamai secures and delivers digital experiences for the world’s largest companies.