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?

What’s the easiest way to publish rich media and video-based content to mobile devices? Introducing NetRover ePublisher!

It’s been a busy month over here at Opanga (as evidenced by the lack of blog posts!)  We’ve beenaccumulating record-breaking amounts of frequent flyer miles by trekking around the globe and meeting with savvy wireless operators who are searching for ways to alleviate the impact of mobile video on their networks, and on the homefront we’ve been busy growing our operations and working to protect our ever-expanding IP portfolio.  And last (but certainly not least!), we’ve been preparing for the launch of our new NetRover ePublisher platform!

We are very excited to have officially launched NetRover ePublisher, and with good reason – we strongly feel that this is the solution that operators have been searching for to help address the challenges surrounding the impact of mobile video on wireless networks.  You see, NetRover ePublisher is based on our patented NetRover technology, which transparently delivers large file video content using only surplus network capacity.  But in addition to being extremely network friendly, NetRover ePublisher also enables operators to provide consumers with the high quality mobile video they have been craving.

NetRover ePublisher accomplishes this by pre-positioning any form of rich media, e.g. video, text, images, audio, into the mobile device memory.  Pre-positioned content from subscription-based apps offers immediate and high-quality playback without freezing or buffering. Because the content is pre-positioned into device memory, the apps are always available, even when the device is offline.

We feel that NetRover ePublisher represents a tremendous advance in video delivery optimization technologies – by offering wireless operators and media companies a complete end-to-end media publishing platform that works outside data caps, we are providing them the tools that they need to thrive and succeed in today’s media-hungry world.

Instead of working against data caps, operators now have the tool they need to thrive within the cap.   As an example, wireless operators typically offer their consumers a monthly service plan that includes voice minutes, text and a data bucket (e.g. 500MB “cap” for $25). This data cap severely limits the amount of video that a consumer will view and consequently will reduce the value of video and associated advertising.

With NetRover ePublisher, this base plan can be augmented to add a number of NetRover-enabled “channels” that would not count towards the consumer’s monthly cap. This is only possible because of Opanga’s unique network friendly distribution technology, which also offers revenue growth that complements data caps or tariffs.

There’s been a lot of talk lately about data caps (see “Is AT&T’s new 150GB DSL data cap justified?” and the capacity crunch (see “Netflix Meets Its Kryptonite”), and we are so proud to be offering a platform that helps ease the burden of these challenges.

We’d love to hear your thoughts on our news!  Feel free to leave a comment or if you require an in-depth demo or briefing, shoot us an email at smarternetworks@opanga.com.

Off-Hour WiFi Offload: Capacity Crunch Silver Bullet?

There has been much discussion recently about the merits of off-hour WiFi offload.

As mentioned in this recent Computerworld article, “Sony, SanDisk and several other technology providers have formed a group and proposed a standard that would use predictive software to pre-load content onto mobile devices in order to preempt buffering issue due to bandwidth bottlenecks.”

Sounds promising, right?  But how exactly are these providers planning to “pre-load content?”  After digging a little bit deeper, it became apparent that they were planning to use a technique called off-hour WiFi offloading, which at first glance might seem comparable to content pre-positioning, which is utilized by our NetRover platform.

After a quick comparison, however, several significant differences between the two technologies emerge.  While both concepts aim to deliver content to a mobile device without burdening the network, consider the following:

• For off-hour WiFi offloading to work, there a multitude of requirements, including the availability of a WiFi network, the proper configuration of device settings and adequate smartphone battery life.
• In addition, latency is a significant issue as content cannot be delivered until the network provides a window of opportunity.  Many times, this means that content is not being delivered until the wee hours of the morning.
• Many wireless operators do not own WiFi networks. So selling consumers on new video-based services that require them not to work on their mobile networks is a hard sale. Wireless operators and consumers need media to work on 3G (and 4G) networks – not restrict it only to WiFi.

This stands in stark contrast to NetRover’s content pre-positioning technology, which “roves” the network day and night to identify and utilize surplus capacity.  In general, content pre-positioning is far more flexible than off-hour WiFi offloading as it is not dependant on WiFi and does not rely on a preconfigured schedule for content delivery.

Rather, content pre-positioning works on WiFi and 3G and continually works with the network to deliver content any time surplus capacity is identified.   No preconfigured schedule required.

We think users need mobile video delivery technologies that actually make life easier, not ones that mandate a plethora of requirements in order to work.  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 4: “But How Do Operators Know What their Subscribers Want to Watch?” They’ll tell you.

As the CEO of a start-up company, I tell the story about our technology and products on a daily basis. We typically receive incredible feedback and response to our approach for video delivery optimization.

However, there is one question we are constantly asked regarding content pre-positioning: “How does the subscriber know what they want to watch?”

To answer that question, we point to the many examples of consumers making proactive decisions all the time on what content they want to consume.

Consider monthly magazine subscriptions via the US Postal service, Netflix movies by mail, eBooks delivered to a Kindle or iTunes Seasons Pass TV. All of these businesses are predicated on the consumer making a decision on what they want and subscribing to content of interest. Consumers are willing to pay for a subscription to what they want and have it delivered to them – especially when delivered in the highest possible HD quality with perfect playback every time.

We are also seeing evidence that consumers are migrating to video-based “apps,” customized applications to access the content they prefer. For example, consumers today might subscribe to CNN by purchasing and downloading the CNN app for $1.99. Likewise, a consumer may select ESPN for their sports news and information by purchasing and downloading the ESPN app.  When consumers buy and download apps they are specifying an choosing the content that they want and prefer. Pre-positioned content can transform that ESPN app into an ESPN Sports Center TV experience for Mobile – and generate a small monthly fee per customer.

These are decisions and preferences made by the consumer and align very well with pre-positioned content and revenue generation opportunities. We expect that this trend will continue in the future, especially as it pertains to viewing mobile video.  As subscribers become increasingly disgruntled with the quality of the video that is available to them, they will turn to more consistent alternatives, such as apps that utilize content pre-positioning techniques, for a consistent and high quality experience.

We believe mobile apps are more valuable to the consumer than a mobile browsing experience. Do you?

Part 3: The Content Pre-Positioning Opportunity

We’ve talked quite a bit about how streaming video places enormous strain on wireless networks, degrades network performance and creates a massive capital burden for operators.   This strain also affects the end-consumer as it results in a very poor and inconsistent playback experience.  Many operators are imposing data caps (check out this video from o2 talking about why they chose this route), but data caps alone will not ease the strain on networks.

The simple fact is that video is crippling our networks and the industry must explore new video distribution methodologies, as well as new consumer models that achieve superior service level characteristics.   We believe that new video distribution models must accomplish the following to be successful:

• Reduce operator CAPEX and OPEX. Operators have fronted the cost to build out the current network and the costs to maintain them.  Continuing to invest billions of dollars in network build out to facilitate other third party company revenue growth is simply not a long term viable business model   (see how much bandwidth Netflix is using without paying for the capacity)
• Creation of new revenue generating services. A more viable approach would be to create new services that generate revenue in a linear relationship with capacity consumption and provide wonderful video quality to consumers – something they will pay for.
• Improve quality of video for consumer. Operators must provide a substantially improved video playback experience.  The optimal playback experience should:
  • Never freeze and/or rebuffer;
  • Should leverage the high quality video components in today’s smartphone and tablet devices
  • Should utilize the ultra low cost of memory in wireless;
  • And allow consumers to enjoy their content without broadband connectivity.

It’s actually a rather basic proposition: operators simply need to provide a quality of experience that is worth paying for.  Innovative subscription-based applications allow consumers to subscribe to the content that they want, when they want it.  And that content is always available in flawless quality every single time. Everywhere. If operators can provide this type of high-quality service and experience, we think consumers would be willing to pay for it.  What do you think?

Part 2: Providing High-Quality Video Outside of the Mobile Data Caps

In my opinion, the end-user mobile video experience today leaves a lot to be desired. On any given day, I will visit an app for a leading cable news site on my iPhone.  Half of the time I wind up watching a video of decent quality, and half of the time, I get a video that freezes and buffers until I get frustrated and exit the app.  At best, the experience is mediocre.

Personally, I think this is unacceptable, and it looks like the majority of mobile video users today agree.  In fact, we expect that over time, consumers will migrate to those applications that provide better experience for their “video snacking” time and even premium video.

It is essential, therefore, for content owners to provide consumers with a better experience just to stay competitive.  One way to improve QoE and gain a strong competitive advantage is to enable apps with content pre-positioning technology.  Apps that utilize this exciting new technology eliminate consumer frustration by pre-positioning content into the end device memory using surplus capacity.  This allows content to be played back instantly, truly at any time (on an airplane, etc.) and with ultimate consistent quality.

We believe that pre-positioning technology, which is utilized by Opanga’s NetRover solution, can complement subscriber data usage limits and pricing plans that are becoming the norm today (see previous post).  For example, content pre-positioning can enable operators to offer new innovative revenue growth applications that are “outside of the cap,” and, when done properly, can maximize the efficiency of the operators’ networks by leveraging underutilized capacity.  This is in addition to providing consumers with a far superior playback experience on their device.  Consider, for example, the following possible use cases:

• Premium content distribution such as catch-up TV, Seasons Pass TV and “mobile DVR” functionality.
• New release VOD movie content delivered to smartphones that coincide with DVD and Blu-Ray release windows.
• Up-to-date news applications, where subscribers can open an app and watch all of the latest local or national news videos – without a broadband connection
• Personal file sharing, where subscribers can share sharing pictures and media with other devices or family members

What other use cases can you imagine with business use cases?  What is your favorite video-based app?

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?

CTIA Enterprise & Applications: Observations from the Show Floor

By Dave Gibbons

We recently returned from CTIA Enterprise & Applications in San Francisco.  Based on the meetings and foot traffic, it is abundantly clear that there is a tremendous amount of interest in the concept of content pre-positioning.  Over the next two weeks, we will explore the opportunities presented by content pre-positioning; how it can be incorporated into a successful business model and why it has the potential to alter consumer behavior.

See our interview on bnetTV and what Light Reading has to say about the potential of content pre-positioning.

As always, we encourage you to weigh in with your thoughts and comments.  And if you have a question about content pre-positioning that remains unanswered at the end of the series, please feel free to drop us a line.  We’re very excited about this new concept and the possibilities it presents and we would welcome the opportunity to share our vision with you!

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?