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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
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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20
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
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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32
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Faultline Service:
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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
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37
RAN Service:
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Backhaul Service:
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