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Video Offload -Six trends you NEED to understand!

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From a Webinar by Maravedis-Rethink Presented by Peter White, Principal Analyst and Founder, Rethink Technology Research Ltd 5thNovember 2013
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Video Offload - Six trends you NEED to understand! Peter White, Principal Analyst and Founder, Rethink Technology Research Ltd 5 th November 2013 1
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Page 1: Video Offload -Six trends you NEED to understand!

Video Offload - Six trends you NEED to understand!

Peter White, Principal Analyst and Founder, Rethink Technology Research Ltd

5th November 2013

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My service is called Faultline

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1) Free to air TV to shift to the internet2) 75% of TV viewing will shift to tablets3) Movies transit to OTT delivery 4) VoD releases Hollywood talent for more OTT5) TV Everywhere becomes most viewed video6) WiFi offload only escape for next four years

Six Trends

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TREND 1: Broadcast Free to Air TV to go over the internet – Is this really happening

Assumption: Aereo grows to Netflix proportionsReaches 30 million homes in 5 years. Aereo says it will reach 78.5 million individuals

A mobile stream is 550kbps = 700 Petabytes a month going through Cellular – Just in the US

Virtually doubles US data traffic on its own

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TREND 1: Broadcast Free to Air Tv to go over the internet

Netflix is 30% plus of US internet traffic at prime time – used between 1 to 2 hours a day.

Currently mobile traffic is just a few % of global fixed line traffic which is currently around 44 Exabytes a month

11% of this is on a mobile device, 5% on a tablet

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TREND 2: 75% of all pay and free TV viewing will shift from TVs to tablets

Viewing on Tablets has already doubled since 2012 - Ooyala Global Video Index

From Q4 to Q1 Viewers watched 5X longer on tablets 4X longer on smartphones, than last year

Tablet audiences spent more than half of their viewing time watching premium long-form content.

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TREND 2: 75% of all pay and free TV viewing will shift from TVs to tablets

Already 74% of consumers view 30 minutes of video a day3 portable devices/home means that portable viewing approaches 10% of online viewing

Hours spent watching streaming video on tablets and mobile increased 100% in 2012

Tablet viewing up to 7% of online video by June 2013, up from 3% a year ago.

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0%

10%

20%

30%

40%

50%

60%

70%

80%

2012 2013 2014 2015 2016 2017

3%7%

15%

35%

55%

75%

Mobile as a percentage of Total OTT video

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As tablet ownership rises, more and more homes will perform like this

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Advent of the headless mediagateway and transcoding super-chips

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TREND 3: Movie Industry will transition from Theatrical release to OTT release

In 2009 US DVD revenues fell 13% went below box office for first time since 2002

Box office = $9.87 billionDVD = $8.73 billion.

US DVD movie revenue peaked in 2004 at $12.1 billion

It has fallen every year since11

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The Trend in theatrical Admissions over ten years in the US is definitively down

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Online movies Netflix et al up 135% But this only drives $3.0 billion of consumer spend and $1.7 billion to the studios

Source IHS Screen Digest

DVD/Blu-Ray now $11.1bn

DVD = 43% views, but 79% of revenue

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Trend 4: VoD kills TV Channels, releasing half of Hollywood to make OTT content

Talent already leaving Hollywood – Going to Broadcast TV, Cable Networks and Original Content – all of which goes OTT

Talent soon will leave less watched TV Channels and go to OTT

Viewing gap - Between the good and the bad

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Fox Soccer News – Since cancelledMexican music program, ReMexaFor What It’s Worth – Antiques valuation in the USWomen’s Professional RodeoNBA Gametime 11 am baketball Preview showCanadian LGBT travel show Trending 10 a celebrity pop-culture news show

Recent US programs with ZERO viewership – according to Nielsen

Nielsen has a vested interest to over-report viewing on every channel to promote advertising

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Game of thrones – 14 million

24 – Over 9 million over 9 seasons

Desperate Housewives – 10 million+ for 8 seasons

Lost – Over 10 million for 6 seasons

US TV Mega series

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Trend 5: Pay TV Everywhere will become the new normal delivered online

TV Everywhere inside the home promoted by trends in transcoding Media Gateway

Placeshifting rights now to be resold by Arris

TV Outside the home will springboard off in-home success – Comcast leads in rights

Download to play on portable device security about to enter the scene

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1.1bn smartphones deployed, just 560m video capable!!

ALL new smart phones are video capable – trend accelerates

Other Accelerators

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0

1000

2000

3000

4000

5000

6000

2010 2011 2012 2013 2014 2015 2016 2017

US Monthly Cellular Data UsageMBs

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What do Operators expect they will do?

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100

40

0

20

40

60

80

100

120

2000 2010

Voice Revenues

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Trend 6: WiFi offload is the only answer NOWOther moves for cellcos include:Staying ahead of 3GPP curve with small cells, Hetnets, DAS, MIMO and LTE-A – High CAPEX

Getting more spectrum – High CAPEX

Installing LTE Broadcast – Low Capex, minimal effect

Install WiFi – High Capex, some effect

Acquire WiFi Ops – No Capex, huge effect – but valuation effects

Trade for WiFi capacity – Opex up, Capex down

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LTE Broadcast as a cure for YouTube

The Problem with MBMS was that it needed a brand new extra chip to receive it

Other LTE modem makers have done the same in their App processor

Qualcomm fixed that when it put support for MBMS into its existing Snapdragon chips

Gangnam Style caused mayhem on cellular networks but if it happened again, any network with LTE Broadcast would make light work of it

There are over 100 use cases laid out at Verizon for LTE Broadcast for next year

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Verizon Wireless It has the NFL

Will Broadcasting be just another MediaFLO?

Broadcasting on cellular – It doesn’t work because we haven’t tried it

Not everyone has sports rights so is LTE JUST for Live events?

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There is Dogma within Cellcosthat to control QoE they must control every part of the network – Using WiFi offload will require new thinking – not all from 3GPP

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Free in France – Created 5 million Homespots, offloaded 70% plus of trafficIn order to survive SFR added 4 million Homespots

In Belgium today Voo and Telenet have 1 millionNetherlands Liberty Global/Ziggo have 2 million

A Homespot is a software upgrade to an existing Home gateway to offer commercial WiFi

Enter the Homespot

Why do these countries need a cellular network at all

In US Comcast, others, plus 300k new hotspots28

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HomeSpots

Think of Homespots as “unintentionally placed” Hotspots – less efficient, but oceans of capacity

On aggregate, use of HomeSpots will dramatically tilt investment in favor of WiFi, in a combination of Homespots/Hotspots

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Consequences includeComplete re-evaluation of the worth of Cellular operators They will be split into two – those who own WiFi, and those who don’t

An irresistible desire by the management of cellular operators to slow Capex in favorof buying WiFi capacity

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Telco ValuationsCellco

Valuations

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Wireless Infrastructure Analyst Firm

Since 2002CLIENT CONFIDENTIAL

© Maravedis Inc.CLIENT CONFIDENTIAL

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Expert Analysts.

Carrier

Relationships.

Real Time Value.

© Maravedis Inc.CLIENT CONFIDENTIAL

Why Maravedis-Rethink?

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35Copyright © Maravedis Inc 2013.

CLIENT CONFIDENTIAL

We protect the INTEGRITY of our data

• CTOs, Director of RAN, Backhaul, Core, Network Planning

• Detailed Phone Interviews

• Email Follow up

• Regular Webinars

Interviews w. Carriers

• Database of 2000 operator contacts

• Regular Monkey Survey

• Share Results

Online Surveys

• Interviews with Vendors and ecosystem

• Cross match of Data

• Secondary Research

Validation

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Faultline Service:

Copyright © Maravedis Inc 2013.CLIENT CONFIDENTIAL

Description Deliverables Lead Analyst• Analyzes the seismic shocks

reverberating through the video industry and its impact on the wireless networks

48 Weekly ResearchNotes

Analyst Support Peter White

SPECIAL OFFER, SUBSCRIBE TO FAULTLINE ANNUAL SERVICE AND RECEIVE A FREE COPY OF THE REPORT “The Faultline Revisited Disruption in Video Delivery from 2013 to 2023”

Page 37: Video Offload -Six trends you NEED to understand!

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RAN Service:

Copyright © Maravedis Inc 2013.CLIENT CONFIDENTIAL

Description Deliverables Lead Analyst

• Covers Macro cells, small cells and Carrier WiFi.

• Vendor Profiles & SWOT Analysis

• Shipments and Market Forecasts

• Carrier expectations & Trends.

2 comprehensive reports per year (PDF and Excel)

Webinars for Clients ONLY

18 research notes per year

Analyst Support

Caroline Gabriel

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Backhaul Service:

Copyright © Maravedis Inc 2013.CLIENT CONFIDENTIAL

Description Deliverables Lead Analyst

• Covers PTP , PMP, NLOS and emerging backhaul technologies

• Vendor Profiles & SWOT Analysis

• Shipments and Market Forecasts

• Carrier expectations & Trends

2 comprehensive reports per year (PDF and Excel)

Webinars for Clients ONLY

18 research notes per year

Analyst Support

Esteban Monturus

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Contact Information

39Copyright © Maravedis Inc 2013.

CLIENT CONFIDENTIAL

www.linkedin.com/in/adlanefellah

www.twitter.com/maravedis

MaravedisRethink

[email protected]

http://www.maravedis-bwa.comhttp://www.rethinkresearch.biz/

(305) 865-1006

(514) 313-5656

Adlane Fellah, Customer Engagement


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