August 25, 2016
By Adrian Pennington
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For the rest of the Autumn 2016 issue of Streaming Media magazine please click here

Electrifying OTT Services With the Cloud: Going Beyond the Box

Let’s take a step back and look at where TV came from before we look at where it’s headed. Consumers are used to systems such as Apple TV, where the UX is underpinned by the computing power of multicore CPU and GPU chipsets. By contrast, the TV world in some cases still is restrained by embedded systems that tried to get the most out of low-horsepower chipsets and minimum memory. CE vendors used embedded software developers to build UIs, and the results often were not pretty.

The arrival of multicore chipsets for customer premises equipment (CPE) allowed operators and TV set makers to use designers instead of developers for the UI-UX. As a result, the TV UX has evolved.

“Most TV UIs are now very heavily graphics-focused and what we would call a televisual experience using ‘posters’ or ‘jackets’ and a lot of picture-in-picture,” says Anthony Smith-Chaigneau, senior director of product marketing at Nagra (right). “A stunning UI-UX that delivers responsive experiences is now expected. The cloud UI is driving us to a position of compromise because the functionality of a native embedded UI-UX cannot be replicated with today’s cloud UI offering.”

Why Cloud for TV UX?

The arguments for a cloud TV UI-UX are similar to those for cDVR and ad insertion; they can be summarized as follows:

Virtually unlimited back-office CPU power to implement the UI-UX
Takes advantage of legacy-deployed customer-premises equipment that is technically less capable than modern devices
Potential for new, less-capable CPE, as all the heavy computing is done in the cloud
Since applications are run in the cloud, upgrades are avoided in client devices
Reduced complexity of managing the different models of CPE deployed on the network
Application download capability such as download of new STB software to any connected device

Nagra’s Smith-Chaigneau points out that many legacy devices simply do not have the physical capacity to offer a slick UI and great UX, so the industry is looking for ways to fix that problem.

“Ironically, TV Everywhere is addressing laptops, smartphones, and tablets that have enormous computing power,” he says. “So with a cloud UI-UX, are we just talking about the issue of ‘incapable’ STB/CPEs in the field?”

Smith-Chaigneau points out that some operators are large enough to support the cost of deploying advanced services and advanced UI-UX by implementing a middleware in the client STB and by supporting all STB hardware models. “They might also look at using cloud services to reduce their total cost of ownership, but it becomes difficult to weigh the real cost of these services, as they have to support millions of consumers,” he says. “Also, they will have to look at the usage of network bandwidth, balancing between unicast and multicast services.

“It may well be that cloud UX is the solution for small and medium operators who want to deploy similar advanced services without having to bear the cost of implementing a middleware in the client STB—or at least be able to support a middleware that provides mainly the video and audio rendering means: no PVR [personal video recorder], no video gateway to home network,” he continues. “Network bandwidth still remains a challenge, but there might be fewer problems as these operators have to serve a smaller number of clients.”

Cloud UX deployment has its share of technology challenges. Nagra summarises these as follows:

Latency of the remote control: each action of the remote has to be transmitted to the cloud for processing.
Limited network resources: if network resources are limited, it is difficult to anticipate the network’s actual load. This is the case for live/linear services where each video stream is unicast. Some cloud UX technologies propose unicast for the UI and multicast for the content. The merge of both streams made in the client device requires relatively powerful devices.
Concurrency of consumer activities: the industry is still learning about the scalability of cloud infrastructure and its availability to support the peaks created by live events.

In addition, Smith-Chaigneau suggests there is a real question about the simplicity of the STB in that both video and audio still need to be decoded “taking into account the numerous compression and transport formats (HD, UHD, Dolby Atmos, etc.) which requires a variety of computing power requirements.”

Vendors such as ActiveVideo espouse the innovation aspect of cloud-based UI-UX. ActiveVideo points to Ziggo’s VOD and catch-up services in Netherlands; trend-driven UIs with multiple tiles of live video on single tuner STBs with Liberty in Puerto Rico; and the complete YouTube experience to upward of 500,000 existing STBs at UPC Hungary.

Nagra questions how open providers of video services will be to being “proxied” by a cloud infrastructure. “For example, video services like Netflix and YouTube have their UI implemented in the client device,” says Smith-Chaigneau. “Will they accept that the UI is implemented in the cloud?”

Ad Insertion

Ad insertion is less mature than cloud DVR, although early adopters are beginning to implement the technologies, and many multichannel video programming distributors (MVPDs) are exploring it.

“It’s early days,” says Ericsson’s Tomer. “One thing is clear, though. Operators agree that changing viewing habits combined with OTT video and innovation in cDVR technology have changed the game for advertising.”

The advent of programmatic advertising has begun a transition for sellers and buyers of ad inventory from an offline transaction world to an instant online experience with claimed benefits of better control, choice, and transparency.

“While traditional ad inventory selling and buying mechanisms exist, we anticipate operators will rapidly adopt the cloud as their default ad insertion infrastructure,” says Sanjay Kirimanjeshwar, head of global marketing at Amagi. “This is not restricted to buying ad inventory alone. The entire workflow of selling inventory, buying ad spots, payments, uploading video assets, managing insertions, reporting, and measurement is in the process of becoming integrated. Numerous third-party services and technology providers are plugging in their products and offerings to make this cloud workflow robust.”

He explains that operators are widening access to their ad inventory by partnering with multiple ad exchange platforms. “Since the systems are cloud-based, it eliminates geographical limitations related to sourcing and delivery,” he says. “For example, media planners based in the U.S. can create, manage, and monitor tailored advertising campaigns for audiences in Canada and Central and Latin America. As the broadcast feeds permeate geographical boundaries, subject to necessary regulatory clearances, operators are rapidly expanding their audience base and reach.”

Operators in the OTT space quite naturally see the cloud as the technology choice for ad insertion, whether for live or VOD services. It’s worth noting Nagra’s observation that with the exception of the U.S. market—where MVPDs actively manage some of the advertising space on behalf of broadcast networks—“Demand for addressable ad insertion remains low as the ad space is managed by broadcasters,” according to Nagra’s Trudelle.

Cloud deployment (meaning ad insertion software deployed on virtual machines) can be used for both broadcast and multiscreen ad insertion. This is happening in three different ways:

Server-side ad insertion for live streaming, cloud DVR, time-shifted, and VOD services
Client-side ad insertion for pre-ingested ads onto the origin or on the cloud
Instances of integrations with digital video ad networks (such as Google or SpotX that traditionally serve video to the web) with video service provider networks

“Client-side” ad insertion relies on the client requesting an ad to be streamed to the device at each ad break. “Server-side” ad insertion inserts the ad in the viewing stream as part of the actual program. One advantage of service-side ad insertion is that it is far less likely that the viewer can use ad-blocking software to override a client, and the advertiser can be sure its ad was actually delivered.

The key advantage overall is the ability for operators to create more value for advertisers by enabling delivery of targeted and personalized ads.

“Advancements in server-side ad insertion, especially for live sports and news content with abrupt ad breaks, are catching operator attention,” says Kirimanjeshwar. “Likewise, operators are beginning to serve personalized ads on VOD platforms where subscriber profiles are predetermined. Either way, operators can offer an enhanced experience to both advertisers and viewers.”

Scalability is another key advantage. Cloud simplifies the addition of new ad exchanges and integration with demand-side platforms, and it supports ad insertions for a growing audience base compared with traditional and offline models. For some, the major benefit is wresting full control and visibility over ad insertions.

“The other development among operators is the adoption of programmatic spot ads,” says Kirimanjeshwar. “Compared to the earlier 1-minute spot ad inventory model where ad sourcing was largely localized, the introduction of cloud technologies has allowed aggregation of spot ads. Now, operators can sell spot ads programmatically.”

Since the storage is cheaper and computational speeds are higher, cloud-based systems should be able to process audience information faster and deliver targeted ads accordingly, in a more cost-effective fashion for operators.

There are challenges, though. Like cDVR and timeshift services, inserting different ads for different viewers creates personalized and unicast streams, potentially unique to each viewer. Streaming ads from a centralized point can put strain on the delivery network because viewers generate their own streams of traffic right across the network. Additionally, it’s important that the ad is sent in the same format and bitrate as the program it is being inserted into.

For cDVR, Brandon explains that Edgeware’s customers are looking to solve this problem by distributing ad-insertion functions closer to the edge of their TV service infrastructure. “The ad decision-making is hosted in the cloud, but the ads themselves are stored locally and inserted at the edge of the network in real time,” he says. “Where, of course, they are not vulnerable to client-based ad-blocking software.”

Perhaps the greater impediment—a speed bump rather than a roadblock—is on the business side and the attempt to align various stakeholders (broadcasters, brand advertisers, and measurement firms). The feeling is that the value of TV Everywhere is directly aligned to the ability to manage addressable ads and that as this becomes more transparent, the whole industry will shift.

This article originally ran in the Autumn 2016 issue of Streaming Media European Edition as “Electrifying OTT Services With the Cloud.”