OTT: Is it possible to improve quality without increasing costs?

The entertainment market has changed forever. Today, consumers who for many years have been accustomed to the reliability, availability, and good quality of traditional cable television services, are increasingly demanding this and much more from their streaming and on-demand audiovisual content providers. Behind the scenes, OTT industry players must juggle to meet this demand.

It’s true that they have technology on their side: today, 100Mbps (or even 1Gbps) connections to households are easily accessible and tend to improve while access and bandwidth costs decrease.  However, this is only the beginning. Thousands of OTT services are delivered over what is known as an “unmanaged” or “best effort” network. That is, the segment of the large telecom operators’ network that, as its name suggests, does not guarantee uptime, performance, or reach. The content is available, but unlike what happens with managed networks – where IP video delivery is reliable and of very high quality – in this case chance plays a role.

OTT and CDN

Is it possible to minimize that risk in OTT industry, deliver the highest possible quality, and achieve all this without increasing costs? The answer is the hybrid CDN, which brings content closer to the end user and eliminates both latency and packet loss that impact last-mile throughput and buffering.

In the traditional CDN model, content providers pay for total bandwidth or gigabyte consumption.   Therefore, the more time the end user consumes or the higher quality he demands, the more he must pay the operator.  The problem increases with the trend towards higher resolutions, series marathons, and increased viewing on multiple screens. There’s a paradox here: the same customer who wants to watch his content in 4K is the one who doesn’t want to pay more on his monthly bill. Therefore, the operator’s incentive to increase quality decreases. Otherwise, their expenses would increase while revenue remained static.

Cirion’s hybrid CDN focus combines CDN infrastructure with the software-based model known as mesh delivery, to break the correlation between viewer behavior and delivery costs.  In a way, it mimics the cable TV infrastructure model enhanced by the power of digital technologies: mesh delivery has fixed rates per video session or simultaneous viewers, allowing market players to deliver better quality as well as run a profitable business.

As a result, content providers gain access to the best of two technologies with a reliable and scalable distribution network, with the flexibility and affordability of a mesh network.  A new paradigm is born: cost control and reliable video delivery act as a stimulus to continuously improve quality, leading to greater customer engagement and, ultimately, a better business outcome.  For OTTs, the dilemma between lowering costs and increasing quality disappears.  For viewers, it ushers in a new era with an increasingly richer experience.

Author:
Esteban Tapias
Product Manager, CDN
Cirion Technologies 

Esteban Tapias, as Product Manager, is responsible for Cirion Technologies’ data products: CDN, video transport and satellite services since 2022. Electronic engineer from the University of Buenos Aires (UBA), he is a professional with more than 30 years of experience in the telecommunications market, largely specialized in digital broadcasting technologies and media services.