Growing Pains: Lessons Learned from the Steep Ascent of Streaming Video

When technology catches fire the way video streaming has over the last ten-plus years, it can be hard to pin down the turning points. But as we know, there are invaluable lessons to be learned in those moments when a pivot leads to pitfall or progress. The history of streaming video is full of them, including a missed opportunity that presaged the beginning of the end for Blockbuster.  And given that IP video will account for 82% of global Internet traffic by 2021 (CAGR 26 percent, 2016-2021), there are more stories, lessons, and disruptions to come. The OTT video market is still shaking out in the US, let alone in the rest of the world. And as always, disruption is rule number one.

We could mark progress by the switch from DVD to download to stream, video for online advertising and social platforms, the upstart success of Netflix’s original content, or the advent of livestreaming video. There are many exciting moments to consider, but sometimes it’s important to take a closer look behind the scenes.

I’ve found one useful way to capture the lessons of video streaming’s ascendance is at the orchestration level. We mostly know how the video making works (lights, camera, action!), but what about the streaming part? When most companies (not the pure plays like Netflix) started doing streaming video, they didn’t know if it would produce revenue. These companies didn’t want to invest in expensive infrastructure, so they went outside to CDNs and online video platform providers. When the traffic grew, they added more CDNs — when the primary one was taxed, they offloaded to another.

Now that we have the answer to the question of whether video streaming is here to stay — yes, everyone loves video everywhere all the time on all the devices for any purpose you can think of — many providers are looking sideways at the CDN pay-as-you-go model. The larger audiences get, the more the CDN gets in the way of profit making. How to control costs? It’s time to fire up your own metal.

Especially for big media market regions, it’s starting to make a lot more sense to leverage your own POPs (your data center, co-lo, or virtual hosting provider) first, with CDNs as a backup. Solutions like Cedexis’ Openmix provide the essential orchestration layer – the intelligent, automated balancing and routing that ensures the video stream gets delivered to the end-user along the route that enables an optimal mix of quality and cost control.  Openmix’s job is to do what CDN’s do — work out how to get that video delivered quickly — but Openmix can also figure out how to do it for the lowest cost at a pre-defined target level of quality.

There are, after all, many more uses for video now and many different types of audiences and consumption preferences. Different kinds of content can take different encodings — there’s no reason to stream the Peppa Pig cartoon the same way you stream Star Wars: The Last Jedi.  In order to compete, content distributors have to stop overpaying for delivery and make more efficient use of their bandwidth.

The more regionally focused a service is, the easier it is to build their own infrastructure. That’s why Europe is a step or two ahead — in smaller countries, country-based providers can more easily serve all their media markets from POPs they control.  In the US, medium sized providers can get creative — they’re not big enough to have a bajillion POPs and cache boxes at the local ISPs, but they need to deliver content nationwide. An independent TV channel, for example, could identify their top media markets and create their cache units there while using CDNs for everything else. Openmix would figure out the best location to serve from, using stipulated quality, available sources, and cost limits to choose the optimal route.

Finally, there are the companies for whom delivering video is not a primary business. If you’re trying to make money off of video ads, you don’t want to spend too much on serving them up. The consumer isn’t paying for quality, like they are with Netflix, but they also won’t engage with your video ad if it is slow or skippy. If they can reduce the cost, complexity, and pain of delivering video ads, their entire business model makes more sense.

The key is creating a good experience while not breaking the bank.  Only the biggest players like Netflix and, Amazon can spend crazy bank now in order to buy their slice of future markets — and even so, they’d rather spend it on making award-winning shows and movies, not on fiber and bare metal.  To be in the game for the video-saturated present and future, pay attention to what’s going on behind the scenes and look to Cedexis and Openmix for intelligent orchestration and optimized, automated control.