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Video Streaming Industry Snapshot – Do’s and Don’ts of optimizing operations

Joshua Shulman

Written by:
May 28th, 2020

How to gain maximum operational flexibility

As most people already know, a strategy based on “on the fly” or “just-in-time” releases is one of the first stepping stones to a failing business model. Successful organizations aim to create repeatable, measurable, and (somewhat) flexible strategies. As video technology engineers will tell you – this is even more applicable in the video streaming and OTT industry, as most services need to deliver content across a plethora of devices across varying bandwidth environments. While you need to adjust your strategy over time, this should be a result of a well thought out infrastructure.

Optimizing operations-JiT-clock image

Just in time delivery

A sure-fire methodology to prep for long-term success is with diligent testing and data collection. Capturing key metrics like the highest bitrate resolution against available bandwidth will help you identify which resolutions are sunk investments – therefore allowing you to shift “on the fly”. In this blog post, I’ll spend time reviewing a few failed and successful optimization stories, followed by the type of metrics you must observe to succeed and scale, as well as the actionable steps your organization can take to do so.

Shortcomings when optimizing operations

The past six months have yielded excellent examples of how streaming organizations shouldn’t build their infrastructures. 

via GIPHY

Quibi

We’ve all heard the story of how Quibi is struggling to gain market share after a promising pre-launch campaign. They did almost everything right – high-quality content, big-name creators, and a respectable SVOD monetization model. So what did Quibi do wrong exactly? 

Founder, Katzenberg lays the faults entirely on the Coronavirus virus pandemic, but the reality is – Quibi’s foundation is fundamentally flawed due to its restrictive build: Mobile ONLY access and limited mobile device reach (Apple and Android OS), with no current option to Cast to Smart TVs. Granted, the app was built for an environment where users are on-the-go, it’s still inexcusable to limit service to a single device type. That’s something that even traditional broadcast organizations can tell you in a heart-beat: TV-Only content distribution will no longer be enough to keep your business successful – you must expand to other services and platforms like digital, mobile, or OTT. 

Device Profile growth-optimizing operations-growth chart

The number of available streaming devices is growing exponentially over time. Limiting your reach by a percentage of device-type can be a grave mistake (image courtesy of Scientiamobile – Mobile Overview Report 2019)

Hooq

Perhaps unknown to western audiences, Hooq, a streaming service comparable to that of Hulu – recently shut its doors for good after five years of unsuccessfully attempting to penetrate the APAC Market. What went wrong?

Marketing journal, The Drum, implied that one of the major failures of Hooq was its inability to create a sustainable monetization model – and by the time the organization figured out to switch from an SVOD to an AVOD model, the infrastructural cost of reshaping their monetization was far too high to recover. How could they have avoided such a fallout…and at a much lower expense towards optimization?

Modular player implementations and multi-pass encoding solutions like Bitmovin’s (shameless plug…#sorrynotsorry) allow service providers to adjust their delivery structure as they best see fit – enabling quick transitions between monetization models as needed. Multipass encodes yield lower CDN expenditures, which, for content redistributors (limited original content) like Hooq or Hulu to save immensely on storage and compression.

Optimizing Operations – Best Practices

One of the winners of a properly built infrastructure with the ability to shift was the American media company ABC News – which shifted from its standard broadcast only method to a 24/7 live coverage network on their sister company’s site (Hulu) and on SlingTV. In a press release, Hulu suggests that “more than 45% of Hulu viewers have cut the cord or never had cable”, thus expanding their reach to a whole new audience. In terms of viewership – this action alone opens up their audience from 3.2 million broadcast TV viewers to over 27 million paid subscription streaming viewers.

The reason ABC News was able to pull off this extremely successful shift was due to their previous and consistent efforts of expanding their device reach on mobile and OTT devices since early 2018. It’s reasonable to state that ABC News identified the shift in market demands and adjusted their strategy accordingly, so what can your organization do to follow in their footsteps?

Something that should be standard at this point – data collection and metrics analysis will easily define success. Following the data will allow your team to make well-informed business decisions like, which devices should you be targeting and when? Where are you wasting money with higher-than-watched resolutions? What are your costs of delivery? Can they be reduced with more efficient encoding or more robust codec applications?

Long story short, there are many solutions that will ease drastic shifts in market demand and will allow your organization to scale – especially in times of need. First and foremost build a product or service that’s capable of reaching as many device-types as possible – the cheapest solution would be to implement a multi-codec solution, more expensive (but scalable options) include multipass encodes that reduce the cost of delivery and allow to allocate funds elsewhere. These solutions offer multiple benefits – from improved performance to strong infrastructure, to reduced bitrate expenditure.

Bitmovin LIVE: APAC Edition – Cost Reduction Series

Want to avoid the ill-fated destinies of Hooq & Quibi and follow the good example set by ABC News? Join Bitmovin for its next Virtual Event Series – Bitmovin LIVE: APAC Edition from June 16th – 23rd. Our own experts and first-class partners will be presenting a variety of topics focused on reducing your costs of video distribution. Learn what it takes to encode efficiently, reach a maximum potential audience at minimal cost using multi-codec implementations, and much much more! Sign-up here to learn all about it