The Pragmatic Innovator

The Customer is Always King (Well, until They Use Too Much Data)

We have predicted the current capacity crunch for some time and over the past months we have seen almost every wireless operator around the world begin to cap their users on a monthly basis. This all to contain the damage of streaming video.

But the fact that wireline operators are now capping their consumers and willing to jeopardize something as important as customer satisfaction demonstrates exactly how dire the situation has become. AT&T in the US and Rogers in Canada have now announced caps on DSL and Cable.

Consider, for example, that Netflix is cutting the quality of streaming video in Canada and that Verizon is planning to “throttle” its most-active users when its network is stressed. They are trying to find a solution to a very complicated problem, which is commendable, but is it really wise to further diminish an already poor quality of experience for the customer? For sure the data cap will help as a band aid to their network capacity crunch but operators and media distributors alike must find new technologies that work for both sides.

So how can operators mitigate the impact capacity crunch without sacrificing the consumer experience?  Unfortunately there isn’t a silver bullet.  There is not a solution or tool on the market today that can single-handedly solve the capacity crunch.  But there is some good news – there are a number of video delivery optimization solutions on the market today that can help ease the burden that mobile video places on the network.

Operators just need to be more realistic when they are evaluating them.  For example, solutions that rely on bit-rate throttling or transcoding are akin to putting a bandaid on a shotgun wound.  Sure, they reduce the amount of data flowing over the network, but it’s a relatively insignificant reduction that also often results in a poor end user experience.

Why not instead consider employing a strategy such as content pre-positioning, which provides consumers with a far superior playback experience on their device and maximizes the efficiency of the operators’ networks by leveraging underutilized capacity and flattening the peak loads. And it also enables innovative revenue growth applications that work outside of the cap.

It’s a win-win solution, in our opinion.  The customers get great quality playback on an unlimited basis, operators get to save their networks and don’t need to invest billions so that media companies can monetize it and media companies continue to grow in the digital content distribution market.

What do you think?

The Most Promising Technology in 2011 that People Are Starting to Talk About

Naturally CES was primarily focused on the latest and greatest devices – tablets and other connected CE devices were definitely the darlings of the show. But the bigger story was really how Internet connectivity is changing the way people watch – and expect to watch – video content.

In fact Ryan Lawler of GigaOM writes “If there’s one thing we learned from CES this year, it’s that there’s a paradigm shift happening in the way consumers discover and access content.” He notes that cable and satellite TV is becoming more like the online TV experience. “The cable program guide will become less important as a content discovery mechanism, and personalized recommendations will become a larger part of the way that consumers find videos they want to watch.”

In other words, consumers will be “ordering” the type of content they want to watch on the device they want. Currently this content is being delivering via some type of streaming technique, such as progressive download or adaptive rate streaming (HTTP Live Streaming, etc.).

As we know these delivery techniques require a tremendous amount of bandwidth and network capacity – especially when delivering higher quality video to tablets and connected TVs. It is the network owners who carry the burden of building and managing this capacity – and maintaining a high QoE.

They are struggling to keep up with demand and cover their costs. Case in point, we recently saw Sprint increase its unlimited data plan by $10/month.

Roger Entner of Recon Analytics aptly wrote about this in FierceWireless: “Sprint had to face the economic reality of success. Data usage and hence costs have increased substantially since it introduced its Simply Everything plan and it had to adjust prices to respond to this reality.”

We feel it is only a matter of time before Verizon feels the success of the iPhone and has to drop its unlimited data plan. Now is the time the industry needs to start talking about new ways to deliver data – outside of data caps.

Of course this is the position Opanga has held for the last few years. Since 2006, we’ve been developing and commercializing our content pre-positioning solutions that are designed to help operators manage the overwhelming network burden of delivering video while at the same time providing consumers with wonderful video applications on smartphones and tablets.

Our solutions manage the flow of content over constrained networks, actively seeking out surplus network capacity to transparently pre-position content in real time to any device without causing the network congestion or degradation typical of other video applications. We have invested substantially in our intellectual property rights (IPR) in this area and will soon announce some exciting developments.

And now we are seeing other companies jumping on the content pre-positioning bandwagon. For example, Alcatel-Lucent launched its Mobile Smartloading technology late last year, which was recently recognized by Andrew Seybold for the Most Innovative Mobile Technology at the 2011 Annual Choice Awards.

We predict that see more operators and content owners will be talking about how content pre-positioning is the most promising technology in 2011. You heard it here first.

Part 1: Data Caps: Good for the Consumer or Good for the Operator?

AT&T and Verizon are doing it. And it is only a matter of time before all wireless operators are imposing some type of usage-based mobile data pricing, or data caps. The iPhone, surge of Android devices and now tablets are demanding an unprecedented amount of wireless bandwidth largely due to video-based apps. And bandwidth is something that operators have a limited amount of.

So data caps are here to stay (even with 4G, we believe) because operators simply cannot keep up with the growing demand of video, which uses a tremendous amount of capacity. Read more about how much capacity streaming video requires.

It has been argued that data caps are good for the operator (less network congestion so they can add more subscribers without building new base stations as quickly) and good for some subscribers as well (especially light users).

But how do you know how much data you use?

We did the math on AT&T’s pricing plan and we determined on average subscribers pay about 5¢ per MB. This is fairly meaningless unless you know how much data you can get per MB.

Streaming Video Clips

Costs for streaming YouTube videos to a smartphone based on watching 15 minutes of video each day, which is what the average person spends on YouTube. YouTube uses approximately 2MB/min to stream a video to a smartphone

Streaming Full Length Movies

Costs for downloading the movie Avatar to various devices using AT&T’s Data Connect Plan. Figures are calculated based on information taken from AT&T’s website.

No doubt subscribers will now have to think twice before viewing that 2 minute YouTube video, not to mention longer-form content that is proving popular on these devices. I’d argue that this is not good for content owners or over-the-top type of video service providers.

We believe operators are faced with two primary options:
1) Forget about allowing subscribers to stream video over 3G

2) Find alternative ways for subscribers to get their video fix

If you’ve read this blog before, you know that Opanga has developed solutions based on a concept called content pre-positioning. Operators can pre-position content into end devices by using surplus capacity found in their networks throughout a 24-hour period.

We believe that pre-positioning technology can complement subscriber data usage limits and pricing plans. Content pre-positioning can enable operators to offer new innovative revenue growth applications that are “outside the cap.”

Stay tuned for some business use cases that will benefit operators and media companies.

Are you surprised at how much a movie would cost on your smartphone? Would you pay it?

The Great Storage Debate: How Much Memory Does Video Really Use?

Since content-pre-positioning is new technology, we frequently receive questions about how it works and its possible flaws or shortcomings.  Perhaps one of the most popular questions relates to how much memory a pre-positioned video takes up on a smartphone.  People are sometimes skeptical of pre-positioning because they assume that the pre-positioned content will consume too much memory and overwhelm the smartphone.

The truth is, video consumes a surprisingly small amount of memory.  Consider this:

• Most smartphones today have 16GB of memory.  If you assume that the phone needs 2GB for the OS and other required software,that leaves approximately 14GB for other applications, such as video.
• A good quality video clip that runs a few minutes requires 3MBytes/minute (~400kbps video rate x 60 seconds =  24kbits/minute / 8 bits/byte = 3MBytes/minute)
• 3MBytes only consumes 0.02% of the memory on a 16GB handset

Now what about longer-length video?  What if you want to pre-position a movie, for instance?

• A two hour movie in decent quality requires approximately 360MB (3MB/min * 120min = 360MB). To store 30 movies you need 10.8GB

With that said, it all comes down to how much action is in the movie since the more action, the higher the coded bit rate that is required for it to look good. So, for very high quality you could encode at 768kbps video / 64kbps audio mono 5760 + 480 = ~6MBytes/minute. This also assumes the whole movie is high action, which it often times is not.  Assuming it were, this makes a movie (like Batman, for instance) with lots of action and special effects reach up to 650MB for very high quality.

So even if you are pre-positioning action movies in high-quality, you can still safely store a surprisingly large amount of movies on your smartphone.   Following the logic above, you could fit approximately 20 full-length high-quality action-intense movies on your phone (650GB * 20 = 13GB).

Are you surprised that your smartphone has that much storage available?  What kinds of content do you like to store on your phone?

New White Paper Discusses Urgent Need for Innovative Video Distribution Solutions

Posted by Dave Gibbons

Earlier today, we announced the availability of a new white paper titled “Streaming Video and Wireless: A Fundamental Mismatch?”  In the paper, the team explores the fundamental mismatch between the amount of spectrum available and the demand that streaming video places on that spectrum.

We’re very excited about this paper for a number of reasons; in addition to providing a compelling analysis of the traditional video delivery solutions, we also introduce content pre-positioning as a compelling new component to complement these traditional solutions.

The full white paper can be downloaded, free of charge, here. Please check it out and let us know if you agree or disagree with our assertion that streaming video and wireless are a fundamental mismatch.  As always, you can post a comment here on this blog, or, if you are attending CTIA Enterprise & Applications next week, you can drop by our stand (#755) and let us know what you think.

Vote for NetRover Mobile!

Posted by Dave Gibbons

We are very excited to announce that NetRover Mobile has been nominated for a Streaming Media Readers’ Choice Award!  Now it’s time for you, our readers, to cast your vote!  (Those of you in the US can consider it good practice for our upcoming Election Day!)

Please click here to complete a short registration form and vote.  Voting will remain open until October 1, and Streaming Media will announce the top three vote-getters in each category on October 18.  Winners will be announced at a gala reception at Streaming Media West in Los Angeles on November 2.

If you need more convincing that NetRover Mobile is the coolest video optimization solution on the list and a critical technology to augment traditional streaming solutions, check this out.

We appreciate your support!

Understanding the Capacity Crunch & the Necessity of Smarter Networks

There is no doubt that video will drive revenue growth and innovation for wireless services in the future.  But there is a fundamental mismatch between the amount of spectrum available on the planet and the demand that streaming video places on that spectrum. Let’s discuss why.

Streaming video technology is not scalable due to its inherently degrading effect on the networks and inconsistent user quality.  Consider that the amount of capacity (the continuous bit rate) required for streaming video is determined by the quality of the video playback to be delivered and the resolution of the rendition – the screen size. A true HD stream to a large flat screen TV requires tens of megabits per second whereas a video stream to a small Smartphone screen with reasonable minimum playback quality can be as low as 300kbps.

In contrast, voice services and SMS services use a fraction of the bandwidth consumed by streaming video. The table below compares the bandwidth consumption for various wireless applications over a typical session duration.

Pretty sobering figures, especially when you consider that streaming services typically don’t generate any additional revenue for the operators.  Opanga has been working with wireless operators to help them create smarter networks and distribute better quality video by prepositioning content— all without deploying substantial new capital equipment.

In the next few weeks, we will be sharing with you exactly how we are doing this, but in the meantime, we want to know what you think. Is streaming a long term viable business proposition?  What do you feel are better ways to distribute video over broadband wireless networks?