Enterprises worldwide are increasing budget for growing data storage needs as public cloud storage capacity continues to expand at a relentless pace.
The cloud storage market is plagued by inefficient budgeting and overspending. Data from Wasabi sheds light on an unfortunate truth: storage services fees account for 48% of total cloud storage bills on average.
While the perceived value of enterprise data might be limitless, storing and accessing that data, on the other hand, has a very real cost. More than half of organizations exceeded their cloud storage budget in 2022. This highlights a significant pain point for enterprises, and an opportunity to improve as they assess cloud storage spending going forward.
The majority of organizations will spend more on expanding cloud storage capacity in 2023 despite a huge number of them blowing their budgets in 2022.
The “ugly truth” is that enterprises are spending almost as much on storage fees as they are on storage capacity, finds storage vendor Wasabi, which compiled the “2023 Cloud Storage Index Executive Summary Report,” pointing to significant improvements to be gained in billing/fee structures and multicloud deployments.
Wasabi analyzed survey results from 1,000 IT decision-makers worldwide to provide insight into how corporations across sectors including energy, finance, and media are strategizing cloud storage.
Its data confirms the relentless pace of data growth in the cloud, with 84% of respondents expecting the amount of data they store in the public cloud to increase this year.
Today, organizations allocate 14% of their total IT budgets to public cloud storage services, on average. Wasabi expect this proportion to expand, as overall IT budgets grow slowly or remain relatively stagnant in 2023, and more dollars are allocated to high-growth IT segments like cloud infrastructure.
However, more than half (52%) of organizations exceeded their budgeted spend on cloud storage in 2022, illustrating a significant pain point which many users may look to address this year.
The worst offenders were new adopters. 72% of respondents who adopted public cloud storage services in the past 12-24 months exceeded their budget.
The reasons why organizations exceeded their budget expectations include incurring higher data operations fees (e.g., cross-region replication, object tagging, transfer acceleration) than expected.
Also, migration of “additional applications/data” to the cloud was higher than originally anticipated. Others reported higher API call fees (e.g., reads/writes) and higher data retrieval fees than expected.
“Fees can be notoriously difficult to predict,” said Andrew Smith, senior manager of strategy and market intelligence at Wasabi. “As a result, they are a major reason why more than half of organizations we surveyed said that they exceeded their budgeted spending on cloud storage services in 2022. Understanding the cloud storage bill was the number one challenge associated with cloud storage migration. The survey data also sheds light on one of the industry’s unfortunate truths: A large proportion of storage bills are allocated to various fees. Specifically, respondents said storage fees account for 48% of their total cloud storage bill on average.”
Wasabi’s survey also confirms that many enterprises are using more than one public cloud infrastructure provider: 57% of organizations use more than one public cloud storage provider.
“Nothing groundbreaking here, but what is interesting are the reasons why many organizations have adopted multiple cloud providers for storage, and what they believe the key benefits and challenges of this type of strategy are,” noted Smith.
Almost 90% of those surveyed indicated that they had migrated storage from on premises to the public cloud within the last year. Interestingly, the top reasons driving migration were not cost related. Instead, users were spurred by the need for better infrastructure resilience, durability, and scalability.
Americans streamed more than 19 million years’ worth of content last year, a total that was at least partly driven by original film and drama, according to Nielsen. Among the most popular hits were Netflix’s Stranger Things and Disney+ animated feature Encanto.
In the ratings agency’s end-of-year streaming rankings, Netflix shows lock-out the top ten. Stranger Things came out on top of both original and acquired content as the most streamed TV show in 2022, amassing 52 billion minutes viewed for a total of 34 episodes (spanning all four seasons).
The dominance of original content is underscored even more by the fact that there are only 34 episodes of Stranger Things, while there are 192 episodes of The Office, finds Nielsen.
The overall streaming figure of 19 million years is up 27% over 2021 (15 million years’ worth) but not quite achieving the earlier pandemic record-highs of 2020.
Another notable Netflix title on the originals ranking was Wednesday, taking third place at 18.6 billion minutes streamed despite debuting in late November with just 36 days of availability on Netflix to make the cut for this chart. Ozark came in second in the original-only list (31.3 billion minutes) but fourth place in the overall ranking.
Netflix locks out the top 10 streaming episodic shows with Amazon Prime’s The Boys coming in at 11 and The Rings of Power at number 15 (9.4 billion minutes).
When it comes to original movies on streamers, Disney is the winner.
Encanto was the most streamed movie in 2022 with 27.4 billion minutes viewed and taking fifth in Nielsen’s original and acquired streaming ranking. Turning Red (11.4 billion minutes), Moana (8.6 billion minutes) and Hocus Pocus 2 (5.7 billion minutes) were other big hits for Disney+.
As you can see from the chart, it’s far from all about originals. The long-running procedural drama NCIS was the second most-watched show in 2022, gaining 38.1 billion minutes viewed across 356 episodes.
Nielsen said, “This highlights the immense attraction that library content holds for viewers who spent billions of minutes throughout the year watching popular titles like Grey’s Anatomy, Bluey, Seinfeld, Criminal Minds and the Simpsons.”
Whether acquired or original, though, Netflix still dominates as originator. The streaming service took 10 out of the 15 spots among 2022 streaming programs overall. Disney+ nabbed three spots followed by two spots for programs on multiple platforms. Netflix in fact was in command across overall, original and acquired streaming programs. Disney+ only overtook the behemoth in streaming movies thanks in part to its deep library of family favorites.
But will Netflix be able to stay top dog in 2023? HBO Max and Peacock, both of which will see their first full years of Nielsen rankings inclusion in 2023, could shake things up.
Big content spends, tapping emerging markets, and automated versioning: these are just a few of the strategies OTT companies are turning to in the fight for dominance in the global marketplace. Stay on top of the business trends and learn about the challenges streamers face with these hand-curated articles from the NAB Amplify archives:
How streamers can use the lessons learned from the past year in 2023 to help rebound from recent subscriber losses and stock price declines.
February 6, 2023
Jim Louderback: Five Developments Now Disrupting the Creator Economy
BY JIM LOUDERBACK
TL;DR
YouTube’s ad revenue continues to slide, but Shorts growth may buoy results later this year for everyone.
Snap is suddenly relevant to creators with some making over $20k a month.
Twitter will pay creators – but there’s a predatory twist.
Some early signs of TikTok views flattening out amid a new focus on transparency – but questions remain about trust and oversight.
The Supreme Court’s revisiting of Section 230 might be the most devastating move of all.
This Week 2-6-2023: Big changes are underway in the creator economy as top platforms deal with revenue drops and competition from new players. YouTube’s ad revenue continues to slide, but Shorts growth may buoy results later this year for everyone. Snap is suddenly relevant to creators with some making over $20k a month. Twitter will pay creators – but there’s a predatory twist. Some early signs of TikTok views flattening out amid a new focus on transparency – but questions remain about trust and oversight. And the Supreme Court’s revisiting of Section 230 might be the most devastating move of all. All that plus a new BHAP feature in this week’s newsletter! It’s the first full week of February and here’s what you need to know.
YouTube’s Terrible Quarter – What it Really Means: The ad recession has arrived, with YouTube’s quarterly ad revenue declining 8% from last year. At the very least that means less payout to creators, which should continue to incent those creators to diversify their revenue mix off-platform. YouTube also disclosed Shorts views jumped to 50 billion per day, and it started sharing Shorts ad revenue with creators last week as well. Is the revenue problem structural or cyclical? I think it’s mostly cyclical, as advertising is typically first to drop during a business pullback. But as short-form video eats into longer-form viewing it’s imperative that YouTube monetize those 50 billion DAUs at close to VOD rates. Longer term I think more creators will see these platforms as top-of-funnel awareness machines and instead focus on conversion instead of just creation.
Signs of a Possible TikTok View Decline: DoubleT may have hit the wall – or maybe it’s just a victim of its own success. Brendan Gahan teamed up with Trendpop to look at average views for videos that surpassed 100k. In January those videos saw over 20% less views per video than a month ago. It’s not definitive, but an interesting signal. Couple that with threats of shutdown, an errant balloon spiking U.S.-China tension and Shorts growth and perhaps there’s fire inside the smoke. In a related story, Trung Phan unpacks the TikTok Family Guy Pipeline, calls the platform “the apex predator in the attention game” and calls for it to be banned. Compelling analysis. Also sludge.
Twitter’s Predatory New Pay to Play Scheme: Twitter claims that it now pays creators, but also says that you won’t get paid unless you pay them first. That’s right, unless you buy a paid “Blue Check” plan, any money you’ve earned won’t actually accrue to you. It’s a predatory plan, because it will likely inspire a legion of hopeful creators to pony up month after month – when only a lucky few actually make any money. Shame on Twitter for preying on the little guys.
Supreme Court Decision Could Change Social Media Forever: You’ll be reading a lot about “Section 230” over the next few months. That’s because the Supreme Court will be revisiting the law that protects social platforms from being responsible for content on their platforms. It might just cause a few algorithmic changes – but it could also drastically impact everything from Reddit upvoting to Wikipedia community updates, Yelp reviews and Discord communities. I’m concerned, as governments have shown a frustratingly consistent inability to understand how technology and the internet really work.
TikTok’s Plan for Transparency – More Questions Than Answers: TikTok has developed an elaborate plan to separate its U.S.-based data from the rest of the world, along with building a monitoring and compliance infrastructure. The Platformer was invited to hear about it, and detailed what they learned (not much) from that discussion. Lawfare has a more in-depth look at how “Project Texas” will work, but it seems most of the onus of trust is passing on to Oracle. Security researcher Klon Kitchen (as quoted by the Platformer) says that “TikTok is adopting a ‘catch me if you can’ strategy like the one previously employed by Huawei.” My issue is that even if data is stored on Oracle Cloud’s U.S. servers it can still be accessed from anywhere in the world. And why is Oracle nominating the key oversight team? Can we trust Oracle? Lots of questions, not a lot of answers.
YouTube exec Andrew Leonard attempts to create a creator/influencer/celebrity taxonomy. I’m not sure that story-telling is the key differentiator but worth a read.
Great post on what really works on TikTok from Duolingo’s Zaria Parvez – the brain behind the bird. Can’t wait for the rest of the series.
An interesting look at the strategy and tactics that an interactive multi-player game used to create organic TikTok videos that drove over 100k installs.
TikTok comes up with its own “Strike” system – I still have PTSD from YouTube’s early efforts.
WEEKLY BHAP: I recently spoke about the creator economy at a corporate retreat, and then led a discussion on the future. As part of that I put together some big predictions to use if the audience was quiet. I didn’t need them. So instead of dropping them into the bit bucket I’m going to surface one each week until I run out of ideas. Here’s this week’s BHAP:
Either this year or next year U.S. workplace regulators will make an example of a top YouTube-led company by suing them for labor law violations, discrimination and/or ignoring harassment on the job. Similar to how the SEC made an example of Kim Kardashian last fall for pumping a crypto security without disclosure, toxic workplace cultures among creator-led companies will be under the microscope. I’ve heard a lot of anecdotal stories about creator-led companies violating workplace law – in large part because they just don’t know and haven’t been trained. This issue will soon come to the fore.
Thanks so much for reading and see you around the internet. Send me a note with your feedback, or post in the comments! Feel free to share this with anyone you think might be interested, and if someone forwarded this to you, you can sign up and subscribe on LinkedIn for free here!
Three different topics impacting the Creator Economy: The ban or sale of TikTok, Meta’s latest layoffs, and the release of GPT4.
March 17, 2023
Posted
February 1, 2023
Nominations Are Open for the NAB Show Excellence in Sustainability Awards
TL;DR
NAB Show is now accepting entries for the Excellence in Sustainability Awards, recognizing outstanding innovations in media technology that promote the conservation and reusability of natural resources and foster economic and social development.
Excellence in Sustainability Awards categories include the Sustainability Champion Award, the Sustainability Leadership Award, and the Sustainability Product or Service Award.
Winners of the NAB Show Excellence in Sustainability Awards will be recognized during a Main Stage ceremony at NAB Show on April 16, 2023, in Las Vegas.
NAB Show is now accepting entries for the Excellence in Sustainability Awards. The awards recognize outstanding innovations in media technology that promote the conservation and reusability of natural resources and foster economic and social development.
“Sustainability efforts not only benefit the planet and society but also make good business sense,” said Chris Brown, executive vice president of Global Connections and Events at the National Association of Broadcasters.
“In addition to providing global recognition for sustainability leaders within our industry, NAB Show is committed to working with our vendors and partners on progressive approaches that inspire the NAB Show community to take collective action in this area.”
Excellence in Sustainability Awards categories include:
The Sustainability Champion Award — Honoring individuals who demonstrate a passion in influencing their team or organization to achieve a more sustainable pathway.
The Sustainability Leadership Award — Honoring organizations that have launched or completed sustainability initiatives.
The Sustainability Product or Service Award — Honoring products or services that significantly improve sustainability or provide sustainable market alternatives that addresses a critical environmental challenge. Products/Services must be available in 2023.
An independent panel of sustainability experts will judge submissions and select winners in each category for small, medium, and large businesses and non-profit organizations.
Winners of the NAB Show Excellence in Sustainability Awards will be recognized during a Main Stage ceremony at NAB Show on April 16, 2023 in Las Vegas.
The program, announced in December, is supported by Amazon Web Services (AWS), a leading cloud provider and a leader in the media technology sector.
“We are honored to support this award and the important work our industry is doing to become more sustainable,” said Marc Aldrich, general manager of Media & Entertainment at AWS. “The media and entertainment community is continuously finding new ways to reduce our carbon footprint, from cutting back on the number of production vans for broadcasts, to flights needed, to energy output from facilities. AWS is proud to do our part in supporting these efforts through our customers and partners by running our business in an environmentally friendly way.”
The Excellence in Sustainability Awards are managed by Barbara Lange, CEO of Kibo121, a consultancy firm that guides media technology organizations on their path to sustainability.
For more information and to submit a nomination, click here.
Media & Entertainment has a big environmental impact — think carbon emissions, waste and energy use. The video entertainment industry’s carbon footprint has surpassed even that of the airline industry, prompting technology developers and other companies to step up with innovative approaches and practices. Explore handpicked articles from NAB Amplify to discover why sustainability is the number one priority for M&E, along with the latest trends in creating a greener future:
When it comes to internet use, companies, consumers and standards organizations are considering new sustainability practices.
January 31, 2023
Posted
January 31, 2023
CES 2023: Controlling the Connected Home and Media Delivery/Distribution
TL;DR
Smart TVs now represent the most important point of entertainment aggregation, control, and data collection inthe connected home, according to Parks Associates.
Eighty-seven percent of US internet households subscribe to at least one OTT video service. More than half of US broadbandhouseholds now combine one of Netflix, Amazon Prime or Disney+ services with at least one other subscription OTT service to form theironline video service portfolio.
Increases in connected deviceownership, increased streaming video, and a largeremote workforce have further strengthened theimportance of home internet.
Smart TVs now represent the most important point of entertainment aggregation, control, and data collection in the connected home, according to a new report from Parks Associates, “2023 Top Insights – Smart Home,” based on findings from the Consumer Electronics Show.
The research analysts report that annual home service spending is $340 billion across home phone, internet, mobile, security and video services, amid continued growth of value-added services and connected devices in the home.
Consumers now place more value on their home’s internet service than previously. Increases in connected device ownership, increased streaming video, and a large remote workforce have further strengthened the importance of home internet.
Parks reports that consumers are seeking new bundles and services incorporating multiple service offerings, including home internet, pay-TV, landlines, mobile phones, and home security. The rise of these bundles, including broadband value-added services, has more than offset the decline in traditional bundles, it finds.
Such bundling and aggregation offer the traditional TV broadcaster “a path forward to reimagine video offerings in a multi-channel, multi-platform world,” the analyst says.
Data about consumer viewing via connected TVs allow providers to offer an improved experience with more relevant and personalized experiences for the viewer. Meanwhile, advertising partners can execute targeted marketing campaigns based on specific interests and behaviors. Parks cites new technologies promising to bring the “shoppable ad” vision to reality on TV through T-commerce experiences.
Content remains king — that is, the most significant factor influencing consumers’ viewing decisions regarding retention, engagement, and customer acquisition, per Parks’ report. Of this, live content has become a key component of many OTT service offerings and a staple of the consumer video portfolio, with good reason.
Sports programming, the biggest and most valuable component of live TV, is migrating from traditional broadcast television to internet streaming channels. Parks thinks that this transition makes it challenging for sports fans to locate content but that this creates opportunities for providers if they can attract fans with a bundled experience.
Internet service providers, meanwhile, are “modifying their relationships with pay-TV, treating the service as a value-add to home internet, and transitioning away from legacy cable head ends to cloud-based infrastructure and streaming TV services.” The goal is to reduce operational costs and widen service appeal, says Parks.
The analyst also notes that piracy is a real problem, potentially costing more than $67 billion dollars worldwide. It expects streaming services to experiment with new ways to protect content and to explore business models that can help recoup lost revenue from password sharing.
We’re spending up to five hours on our mobile phones every day, with exclusive sports content serving as a crucial on-ramp for new users, according to mobile data analytics provider Data.ai.
Its “State of Mobile 2023” report further explores a boom in downloads that saw mobile services downloaded a record 255 billion times globally last year. As a result, mobile ad spend is on track to hit $362 billion in 2023, after surpassing $336 in 2022, despite tightening marketing budgets.
Adding coverage of major sporting events can be a “highly effective-albeit expensive-way” to add new users to popular streaming services, is one is one takeaway.
Globally, streaming of the World Cup matches and top cricket tournaments in India drove the biggest download spikes.
In the US, the World Cup also drove large adoption spikes for Peacock TV and fubo TV, while streaming deals with the NFL helped Peacock TV, Paramount Network and Amazon Prime Video.
FOX Sports and Canada’s TSN GO also saw “huge increases” in adoption as a result of their FIFA World Cup coverage.
DAZN and ESPN are the “clear standouts” in terms of consumer spending in the sports app category, earning more in 2022 than the rest of the top 10 sports apps combined. Nearly all of ESPN’s revenue comes from the US, while DAZN has managed to monetize across more markets by casting a wide net in terms of its sports coverage in different markets. Some of DAZN’s content includes Serie A in Italy (where frequent blackouts don’t appear to have dented its popularity) and Nippon Professional Baseball in Japan, as well as pay-per-view boxing.
Sports betting apps downloads peak at the start of the NFL season each year and the Super Bowl. The report found that sports betting installs reached 4.3 million at the start of the 2022-2023 NFL season, up 8% year-over-year and more than four times the total from September through October 2018. FanDuel emerged as the market leader in 2022, with BetMGM, DraftKings, and William Hill vying for the number two spot.
Data.ai observes that sports betting apps over-index for a male audience in the 25-44 age range, a similar demographic to those likely to use financial apps, for example, for cryptocurrency trading.
Non-sports content that created the biggest download spikes included Euphoria (HBO Max), Halloween Ends (Peacock TV) and House of the Dragon (HBO Max).
The United States market may be saturated by OTT providers but there’s still room for growth in Europe and Asia. That said, many European markets became more concentrated between 2020 and 2022, largely explained by the massive launch by Disney+ in the region. The report finds that OTT (over-the-top) apps such as Netflix and Disney+ grew 12% year-over-year to $7.2 billion.
“Look for other OTT providers to attempt to emulate Disney+’s successful global expansion,” is Data.ai’s note.
Spending on other apps (non-gaming) increased by 6% year-over-year to $58 billion, largely driven by subscriptions and purchases in OTT, dating, and short videos. Downloads increased 13% year-over-year to 165 billion.
Shortform video apps, led by TikTok, dominated consumer attention in 2022. Users of these apps streamed a whopping 3.1 billion hours of user-generated content daily, up 22% year-over-year, and spent $5.6 billion, up 55% year-over-year, fueling the creator economy.
“TikTok’s recent success was well beyond that of other Entertainment apps,” the report finds. “Over the past 10 years TikTok has more than twice as many downloads as the next closest app, YouTube.”
Other findings in the report: Time spent per day has reached five hours in the top mobile-first markets.
Downloads of mobile apps grew to 255 billion (+11% YoY), and hours spent peaked at 4.1 trillion (+9% YoY). Meanwhile, consumer spending across all app stores, cooled to $167 billion (-2% YoY) for first time ever due to decline in gaming spend, which was previously bolstered by pandemic conditions. However, non-gaming mobile services and subscriptions reached record spend.
“For the first time, macroeconomic factors are dampening growth in mobile spend,” says Data.ai CEO Theodore Krantz. “Consumer spend is tightening while demand for mobile is the gold standard. In 2023, mobile will be the primary battleground for unprecedented consumer touch, engagement and loyalty.”
6G may already be on the horizon, but there’s still a lot to understand about the benefits — and limitations — of 5G, which is rolling out across the US but has yet to reach peak saturation. Dive into these selections from the NAB Amplify archives to learn what, exactly, 5G is, how it differs from 4G, and — most importantly — how 5G will bolster the Media & Entertainment industry on the road ahead:
Ericsson predicts 91% of the North American market will have adopted 5G by 2028, with video accounting for as much as 80% of mobile network traffic.
January 22, 2023
Posted
January 21, 2023
TikTok and the Meme-ification of Social Marketing
TL;DR
TikTok provides key messages for brands wanting to engage with the billions of users on the shortform video platform in a new report.
TikTok claims it fosters endless opportunities to spread joy; among TikTok users who took an action off-platform as a result of TikTok content, 90% said the platform makes them happy and never gets boring.
TikTok’s big prediction? In 2023, TikTok-first entertainment will inspire people to test out new products and ways of thinking and behaving.
If you’re looking for clues for how TikTok is shaping global culture and politics you won’t find them in its own report, a glossily produced brochure enticing brands to work with creators and influence users of its platform.
Much of what the shortform video giant says in its “What’s Next: 2023 Trend Report” could have been plucked from similar marketing messages produced over the years for YouTube. And maybe that’s the point. Move over Google, there’s a new place for investors to roost.
“Essentially, [TikTok] is a space where people can find new ideas on how to explore their passions and live their lives,” we learn. “And as people seek out ways to break the status quo, they’ll look to peers and role models who have the confidence to live life the way they want to.”
Sofia Hernandez, global head of business marketing for TikTok, is quoted, also saying not a lot: “2022 was the year people realized they didn’t have to live their lives as they always have done — with different points of view and ideas transcending cultures on TikTok. Next year we’re going to see more of this — as our communities get more confident and inspire positive change together.”
Against the backdrop of the increasing cost of living, apparently what people want is to have fun. They want humor, they want to feel happy and healthy. They want to feel part of a community and, above all, they want to be entertained.
It’s not rocket science, but TikTok says its platform is the best place for advertisers to reach audiences and that to do so they should work with creators.
Four out of five users say TikTok is very or extremely entertaining, per the report. “This means that when advertising messaging is delivered like an ad, but loved like entertainment, brands can see incredible business results,” TikTok explains. “For brands, the most effective messages on TikTok are uplifting, funny and personalized, or entertaining their audiences. Brands can build on this entertainment value by using editing techniques like syncing sounds to transitions or adding text overlays — which are effective at keeping viewers’ attention.”
The report differentiates content on TikTok from other platforms, where it is “personalized” based on broad identity categories or simple browsing histories. In fact, TikTok is 1.8 times more likely to introduce people to new topics they didn’t know they liked compared to traditional social platforms, per the report. We learn that content is curated on the platform based on what viewers find entertaining, so it captures their attention and trust.
“The trust is a result of who’s making the content. When a viewer sees a video from a creator they can relate to or from an expert they’re more likely to take the information to heart.”
Among people who took an “off-platform” action as a result of a TikTok video, 92% say they felt a positive emotion that ultimately resulted in an off-platform action. Meanwhile, 72% say they obtained reviews from creators they trust on TikTok, more than any other platform.
TikTok’s big prediction? In 2023, TikTok-first entertainment will inspire people to test out new products and new ways of thinking and behaving.
We are also led to believe that “people come to the platform to uncover truths and debunk myths, which builds credibility and trust between Creators and their viewers,” which may be news to those concerned about TikTok’s potential for political bias or cultural sway, though in truth these levels of mistrust have yet to reach Twitter and Facebook-style proportions.
Have longer video footage at your disposal? TikTok advises you to let artificial intelligence automatically cut video clips and save yourself time on editing, “so you can focus on the fun stuff.”
Joy, we also understand from the report, is a growing factor in people’s purchasing decisions worldwide, so it should be a key element of marketing strategies in 2023.
“Create TikTok content that helps people carve out joy for themselves, or even provides it through humor, relaxation and relatable points of view. Different creative approaches and tools can help you incorporate these elements into the videos you make for the platform.
In 2023, “messaging on TikTok — and beyond — should speak to this desire for levity and encourage people to make more room for themselves.”
Technology and societal trends are changing the internet. Concerns over data privacy, misinformation and content moderation are happening in tandem with excitement about Web3 and blockchain possibilities. Learn more about the tech and trends driving humanity’s digital future with these hand-curated articles from the NAB Amplify archives:
The value of social media across functions is clearer than ever, but finding experienced talent is the top challenge businesses face.
January 25, 2023
Posted
January 20, 2023
What’s Next for Streaming? (It’s All About the ARPU, Baby)
TL;DR
After a tough 2022, premium subscription streamers are in the middle of reorienting their business model from content commissions to distribution.
The days of multi-million dollar paychecks for show creators seem to be over as content must now wash its face in metrics for ARPU (Average Revenue Per Unit).
A greater focus on franchise content — sequels and spinoffs — and linear TV-like schedule releases can help streamers counter high churn rates.
Netflix’s decision to cancel high profile drama 1899 after just one season came as a shock to fans and a reality check to content producers that streaming shows will be cut to a different cloth from now on.
Just as consumers don’t have an endless budget to subscribe to streaming services, so content providers are no longer willing to open the checkbook if the numbers don’t add up.
And those numbers have changed along with the way success is measured.
“The enthusiasm for streaming among consumers is still there, but I think the assumption that all these platforms are going to continue to grow and add subscribers every quarter is gone,” Hub Entertainment Research founder Jon Giegengack told Lucas Manfredi at The Wrap. “I’m not entirely sure why people thought it would go on forever, but we’ve reached the point where that’s not guaranteed.”
Netflix’s first subscriber loss in over a decade last April caused a shock wave that sent streamers back to the drawing board. Revised strategies include a shift of focus from pure subscriber growth to profitability and average revenue per user.
“Ultimately, companies need to generate cash so that they can pay the bills and not go bankrupt,” David Offenberg, an associate professor of finance at Loyola Marymount University, told The Wrap. “I think the focus will be on ARPU [Average Revenue Per Unit] for the rest of eternity at this point. We’re done with focusing on subscribers. And if you’re not at scale yet, your chances of getting there are pretty slim.”
Netflix was the first to alter course and has succeeded in leading the competition on ARPU. Figures in the article show Netflix has an ARPU of $16.37 in the US and Canada, followed by Hulu’s ARPU of $12.23 and Warner Bros. Discovery of $10.66. Disney+ has lagged behind its rivals with a domestic ARPU of just $6.10.
Another universal tactic is to adopt different pricing tiers with many streamers introducing a free or lower cost ad-supported option.
Additionally, many streamers are increasingly leveraging bundled services. The average household has 12.5 different entertainment sources that they consume, according to a Hub Entertainment survey of TV consumers. These sources include streaming TV, social media, gaming, music, sports, podcasts, audiobooks and reading.
Companies that are able to super-aggregate these services into bundles will have an edge, Manfredi maintains. Notable examples of super bundles include Amazon Prime, which offers benefits like access to Prime Video content and free delivery on Amazon purchases, and Apple One, which includes AppleTV+, iCloud storage, Apple News, Apple Music, Apple Arcade and AppleFitness+.
The cancellation of major shows like 1899 is far from unique and speaks to the fact that streamers can no longer afford to have an endless library of shows and movies
“As profitability and ARPU take center stage moving forward, streamers have learned that they will need to be more mindful about their content spend and what that investment is going towards,” says Manfredi.
1899 was an expensive show to produce and required an entirely new and unique virtual production volume to be built in Berlin. Likewise, the multimillion-dollar deals that have been awarded to show creators like Ryan Murphy, Shonda Rhimes and Rian Johnson, “are a thing of the past,” according to Morning Consult entertainment and media analyst Kevin Tran.
“Streamers need to make better use of the intellectual property they already own while also keeping in mind moving forward that sheer quantity of content is now far from a compelling differentiation factor,” he says.
On the flip side, Tran warns that pulling content could make showrunners and actors “more hesitant to work with a company that they view as too eager to axe pricey or declining shows from their streaming platforms” and potentially anger fans of those shows.
Manfredi also thinks that the days of binge viewing are largely over. It makes more sense for streamers to drop episodes, especially of its most popular content, over a period of months to eke out subscriber engagement. Netflix’s two-part release of Stranger Things S4 last year was a case in point.
“If people can binge watch a whole show and then drop their subscription until the next season comes out, that’s a pretty tough calculation if you have to come up with a brand new, super expensive show to reengage them every time,” Giegengack said. “If you parse those shows out and the episodes come out once a week, or maybe starting with two like they do on Paramount+ to get people hooked, and then parse them out further apart after that, each piece of content that you’re investing with can keep people engaged for a longer period of time.”
Churn is still a huge issue for all streamers. In the third quarter of 2022, cancellations across Netflix, Hulu, AppleTV+, Disney+, Discovery+, HBO Max, Paramount+, Peacock, Showtime and Starz grew to 32 million, according to Antenna. The figure represents a “significant expansion” from 28 million cancellations in the previous quarter and 25.2 million cancellations in the same quarter a year ago.
In a bid to counter churn, Manfredi detects a new urgency around commissioning franchises. One poll suggests 75% of people are likely to cycle subscriptions in the next six months with the main stated reason being that there was only one title on a given streamer that they were interested in viewing.
“A reliable way to retain subscribers is to keep them connected to things that they know and love,” Lionsgate Television Group vice chairman Sandra Stern told The Wrap. “I think for streamers particularly that is a really major objective.”
Disney+ has mastered this strategy with regular output of new Marvel Studios shows such as Loki and She-Hulk: Attorney at Law and new Star Wars series like Andor. Netflix has scored success with Wednesday and Paramount+ continues to earn mileage from Yellowstone spinoffs. Look out for Peacock’s John Wick universe spinoff later this year.
“Andor” creator and showrunner Tony Gilroy and editor John Gilroy recount the complexities of bringing the Star Wars episodic to the screen.
January 17, 2023
Virtual Production Is Going Great, But… We Have Some Talent and Tech Challenges
TL;DR
Altman Solon’s 2022 Global Film & Video Production Report finds virtual production is on the rise, but the industry faces challenges over sourcing talent and harnessing the power of data.
Productions are shifting towards a data-driven approach to improve production forecasting and measure VP success.
Virtual production is still in its early days, with widespread adoption limited to specific projects where it’s easily applicable. However, there are emerging trends around how VP is used, the impact it has on projects, and criteria used for deciding when to use it.
Virtual production continues to gain traction across the film and TV industries, but the cost of using it remains high and talent with VP experience and training is limited, according to a new Altman Solon report.
Creatives are still be skeptical about incorporating the technologies — and the research finds there’s also a lack of sophisticated data analysis necessary to make the case for virtual production.
The consultancy’s 2022 Global Film & Video Production Report highlights VP as a growing trend in the industry, driven by the need for virtual and collaborative tools to lower production costs, improve timelines, and overcome the limitations of physical production sets.
It surveyed over 100 industry experts with more than three years of experience in virtual production and found that motion capture was the most popular VP technology, with 50% reporting they or their team have used it over the past 12 months.
The second most popular tool, cloud-based editing (48%), has gained favor among production staff because it enables remote collaboration. Three-quarters of respondents identified virtual scouting as a tool that saves money and shortens timelines. Newer technologies like in-camera VFX (42%) and virtual scouting (39%) have lower adoption rates.
Despite the popularity and effectiveness of certain tools, widespread adoption is limited to specific projects where VP is easily applicable — often projects that require many filming locations or sci-fi/fantasy productions.
For small productions, the survey found that travel budget savings can make a virtual production project more economically viable.
“While medium and small stages exist, producers of mid-tier content often lack the readiness and experience to shoot on a Tier 2 or medium stage, and one-off shoots don’t reap the benefits of shooting multiple episodes or seasons on a stage,” the report says.
There are some 84 virtual production stages in the US and another 40 in the UK, however this number also includes smaller “xR stages” used mainly for music videos or commercials, not shows or films.
The report suggests that smaller production studios with limited resources won’t be able to afford a larger stage and may opt for traditional shooting methods or green screens, rendering LED volumes less relevant for the mid- to low-budget markets.
Because virtual production is still an emerging technology, there is a shortage of talent with “hands-on” experience in the industry, creating staffing challenges for production studios. Additionally, the broader industry has historically lacked diversity in terms of race and gender, creating a talent funnel issue when trying to hire candidates of diverse backgrounds for VP-specific roles.
Instead, most respondents are now looking for candidates in adjacent industries like gaming, AR/VR, animation, automotive and transport, and architecture, among others, and through on-campus recruitment to find candidates with the necessary technical skills. Candidates from industries that use real-time gaming technology and are familiar with the workflows are desirable for VP roles.
“Virtual production is the future of global filmmaking but how and when it maximizes its potential will be determined by the industry’s ability to attract talent to this new field,” said Altman Solon director Derek Powell.
“It’s clear that the networking-heavy approach used in Hollywood for generations will not deliver the VP workforce needed now and in the future. The good news is that studios are employing new and creative recruiting techniques, including better outreach to candidates with diverse backgrounds.”
Virtual Production as Part of a Data-Driven Strategy
Because of virtual production, studios now have more access to data, opening the opportunity to gather data across the production process and run analytics to uncover insights for more informed decision-making.
That’s a change, since historically, production studios didn’t collect technical production data. VP can be used to collect and leverage production data that identifies possible efficiencies (for example, using lens metadata and lighting parameters defined in the gaming engine to make corrections in post-production). According to the report, there is potential for productions to use VP data to automate processes in post-production that in the past were done with creative teams, thus saving time and money.
However, while VP tools enable great collection of data versus traditional production methods, production teams hit roadblocks when collecting it. According to the survey, the top three limitations to collecting data are “lack of business intelligence strategy” (62%), “lack of business intelligence impact” (49%), and “lack of training and execution” (45%).
“All these inhibitors are characteristic of organizations with immature business intelligence and data strategies,” finds the consultancy — which would no doubt offer its services to assist in this regard. “This indicates that while production teams have the tools to gather and analyze data, they are still nascent in this area and slowly transitioning to be more data-driven.”
This matters most when budget forecasting, which was the top data-usage focus of VP executives surveyed. Altman Solon says: “In traditional productions, variables associated with set design, shooting, travel, and logistics can change greatly when a shooting location needs to change or if a scene needs to be reshot, which can include bringing talent and crews back to a location. For these reasons, using data to improve budget forecasting was the top-ranked selection in the survey.”
Other Issues Highlighted in the Report
Currently, there are no standard virtual production processes, and each production has its own unique process structure. Data security is also a concern for half the respondents, largely due to the use of cloud-based tools, which some users perceive as having weaker security controls than on-premises solutions. Similarly, just under 50% of respondents expressed concern over the potential for customizable workflow configurations since cloud-based tools have fewer customization capabilities.
Next, Listen to This
Epic Games’ Los Angeles Lab Director Connie Kennedy and American Cinematographer Virtual Production Editor Noah Kadner join us to talk about the confluence of practical and virtual production, and help shed some light on what virtual production actually is — and isn’t.
The use of LED walls and LED volumes — a major component of virtual production — can be traced directly back to the front- and rear-projection techniques common throughout much of the 20th century.
The creators of “1899” understand that virtual production requires designing the story, as well as the set, with rigor and detail.
January 9, 2023
Posted
January 9, 2023
How Diffusion Drives Generative AI
TL;DR
Diffusion models replaced GANs (generative adversarial networks) to drive the recent trend in generative AI tools.
Diffusion-based AI has also proved adept at composing music and video.
The tech has been around for a decade but it wasn’t until OpenAI developed CLIP (Contrastive Language-Image Pre-Training) that diffusion became practical in everyday applications.
Text-to-image AI exploded last year as technical advances greatly enhanced the fidelity of art that AI systems could create. At the heart of these systems is a technology called diffusion, which is already being used to auto-generate music and video.
So what is diffusion, exactly, and why is it such a massive leap over the previous state of the art? Kyle Wiggers has done the research at TechCrunch.
We learn that earlier forms of AI technology relied on generative adversarial networks, or GANs. These proved pretty good at creating the first deepfaking apps. For example, StyleGAN, an NVIDIA-developed system, can generate high-resolution head shots of fictional people by learning attributes like facial pose, freckles and hair.
In practice, though, GANs suffered from a number of shortcomings owing to their architecture, says Wiggers. The models were inherently unstable and also needed lots of data and compute power to run and train, which made them tough to scale.
Diffusion rode to the rescue. The tech has actually been around for a decade but it wasn’t until OpenAI developed CLIP (Contrastive Language-Image Pre-Training) that diffusion became practical in everyday applications.
CLIP classifies data — for example, images — to “score” each step of the diffusion process based on how likely it is to be classified under a given text prompt (e.g. “a sketch of a dog in a flowery lawn”).
Wiggers explains that, at the start, the data has a very low CLIP-given score, because it’s mostly noise. But as the diffusion system reconstructs data from the noise, it slowly comes closer to matching the prompt.
“A useful analogy is uncarved marble — like a master sculptor telling a novice where to carve, CLIP guides the diffusion system toward an image that gives a higher score.”
OpenAI introduced CLIP alongside the image-generating system DALL-E. Since then, it’s made its way into DALL-E’s successor, DALL-E 2, as well as open source alternatives like Stable Diffusion.
So what can CLIP-guided diffusion models do? They’re quite good at generating art — from photorealistic imagery to sketches, drawings and paintings in the style of practically any artist.
Researchers have also experimented with using guided diffusion models to compose new music. Harmonai, an organization with financial backing from Stability AI, the London-based startup behind Stable Diffusion, released a diffusion-based model that can output clips of music by training on hundreds of hours of existing songs. More recently, developers Seth Forsgren and Hayk Martiros created a hobby project dubbed Riffusion that uses a diffusion model cleverly trained on spectrograms — visual representations — of audio to generate tunes.
Even with AI-powered text-to-image tools like DALL-E 2, Midjourney and Craiyon still in their relative infancy, artificial intelligence and machine learning is already transforming the definition of art — including cinema — in ways no one could have ever predicted. Gain insights into AI’s potential impact on Media & Entertainment in NAB Amplify’s ongoing series of articles examining the latest trends and developments in AI art
Crypto and NFTs have received negative publicity of late but the potential for Web3 to recode the rules of business engagement remains as potent as ever, according to consultancy Vayner3.
In its report it identifies what mattersmost to marketers and operators at large organizations. While acknowledging that macroeconomicforces and regulatory changes could play a major role in how 2023 unfolds, it remain convinced: Web3 is going increasinglymainstream in 2023.
Mobile device proliferation was a primary catalystfor Web2, with Web3 likely to follow a similarmass adoption curve.
Web3 and its constituent technologies like crypto currencies and NFTs have taken a knock this past year but boosters continue to promote its strengths, arguing that 2023 will be the year of mass adoption.
Vayner3, a Web3 consultancy, is one of them. While not dismissing the “bad actors” and “sobering lows” such as the recent collapse of FTX, Celsius, and Terra Luna, it largely puts Web3 woes down to negative press publicity.
On the other hand, basic knowledge of Web3 has gone mainstream helped by media attention. “The tenor of mainstream media continues to paint NFTs and crypto as a fringe movement rife with scams and scandals,” says Chris Liquin, SVP Strategy and one of the authors of a new report published by Vayner3. “Media sentiment and [falling] asset price are only the tip of the Web3 iceberg, and these narratives certainly broke through to mainstream consumer awareness in 2022.”
Liquin continues, “…but just under the surface, we see initial experimentation, enterprise investment, and technological developments that will continue to meaningfully advance Web3 culture, technology, and adoption.”
According to the consultancy we are past the “shiny new object” phase of gimmick and test, with major brands and big tech players all taking Web3 seriously.
Next year, the “brands who onboard the masses” will offer clear Web3 products, pursue nuanced consumer targeting, and develop intentional go-to-market strategy.
“We expect product strategy to move from scarcity to scale in 2023 with a greater focus on new forms of engagement and consumer insights vs. consumer sales and revenue generation.”
One tactic is to remove the mystifying jargon that clouds much Web3 speak. Choosing to talk of “digital collectibles” rather than NFTs, for example, is an increasingly common a simplification with new platform entrants like Reddit and Instagram using more “mainstream-friendly” terms as well.
Vayner3 expects winning brands to develop consumer strategies that incorporate a longer-term view of program design, product releases and community-building.
Another reason why Web3 is only going to get stronger is the role of Big Tech. Virtually all are integrating blockchain-based tokens into their core product offerings, which is resulting in a hybrid between Web2 and Web3 the consultancy calls Web2.5.
The report also notes that Meta, Shopify, Google, Instagram, Amazon, Microsoft and Reddit are experimenting with Web3: These massive Web2 organizations typically “experiment” with multi-million (if not multi-billion)-dollar amounts of attention, investment and scale.
For example, in its latest pilot program, Instagram recently announced NFT creation, sales and trading will be available to its 160 million US users.
Mobile device proliferation was a primary catalyst for Web2, and Vayner3 expects Web3 to follow a similar mass adoption curve “to migrate from our laptops to our pockets.” The company claims there has been more than 500% growth in Web3 mobile apps available in the Google Play and iOS app stores over the last three years. Meanwhile, blockchains like Polygon and Solana have announced mobile partnerships and manufacturers like HTC have launched Web3-enabled devices.
“While it’s not yet clear what the ‘killer app’ of 2023 might look like, we expect there to be one — if not many — blockchain-based mobile apps on the leaderboard,” says Liquin.
That said, there’s a battle ahead as Web2 Big Tech seeks to retain control. Vayner3 picks on Apple’s “polarizing policy” on in-app purchases with which it seeks to maintain its control and fee structure. Liquin says this has implications for how Web3 app builders deploy and monetize Web3 apps in Apple’s App Store, “which will likely stifle Web3 innovation potential on Apple’s iOS.” The report adds: “the mobile world may be a Web3 battlefield in 2023.”
Other Predictions from the Report:
Web3 is not just for engineers and developers: Enterprises across Entertainment, Retail, Fashion and Tech are hiring dedicated Web3 teams as well. Vayner3 expects them to play a significant role in broad Web3 adoption “through internal education, evangelism, and community-building at many of the largest organizations in the world.”
Crypto payment is more than just a marketing stunt. In 2023, Vayner3 expect more opportunities for consumers to use crypto for everyday purchases. It backs this up citing a recent survey of 2,000 senior execs of US retailers, which found that 75% of them plan to accept cryptocurrency payments within the next two years.
The metaverse is still a long way away and is not poised to be a mainstream driver of Web3 tech or culture in 2023, according to the consultancy.
Mainstream adoption of blockchain-based ticketing may be further off than 2023. At the same time the company expects a wave of IRL activations, deeper engagement with consumers, and new channels for retargeting and post-event community building “to gain meaningful momentum in 2023, specifically during conference and festival season this summer.”
“The hype has died down, but the genie is out of the bottle,” the consultancy declares, advising businesses to build provisions for IP rights, digital asset consideration, and revenue share into agreements with talent, sponsors, venues, and other partners.”
Does Web3 offer the promise of a truly decentralized internet, or is it just another way for Big Tech to maintain its stranglehold on our personal data? Hand-picked from the NAB Amplify archives, here are the expert insights you need to understand Web3’s potential and stay ahead of the curve on the information superhighway:
In the Internet of You (IoU), smart tech will be connected into an intelligent network providing hyper-personalized services and assistance.
January 25, 2023
Posted
January 1, 2023
It’s All About the Video: 5G in 2023 (and 2028)
TL;DR
Ericsson predicts 91% of the North American market will have adopted 5G by 2028.
The company is betting that mobile subscriptions have started to level off, betting that the next six years will only add 800 million new subscriptions.
Advances in mobile technologies could quintuple data used by 2028.
If you consider your smartphone a multimedia/multipurpose technology device, then Ericsson’s mobile reports are for you. The latest edition is available here.
North America and northern east Asia (e.g. China, South Korea, Taiwan) lead the way in 5G adoption, for now. India is expected to be a big player as it continues efforts to launch its own high-tech future, one that embraces all of the country not just a few select well-educated metropolises. Similarly situated countries, such as Indonesia and Nigeria, are also showing strong early adoption numbers.
The report says, “In 2028, it is projected that North America will have the highest 5G penetration at 91%, followed by Western Europe at 88%.”
In terms of current usage, “North America and North East Asia are expected to have the highest 5G subscription penetration by the end of 2022 at around 35%, followed by the Gulf Cooperation Council countries at 20% and Western Europe at 11%.”
By 2028, Ericsson expects 5 billion 5G subscriptions worldwide.
There is also a prediction that mobile subscriptions (mostly smartphones) will reach 9.2 billion in 2028, up from 8.4 billion calculated for this year. That doesn’t sound like a lot of growth, indicating that nearly everyone who wants a mobile subscription probably has one; remember that there are more than 8 billion people on planet Earth as of 2022.
The report’s “5G in South East Asia and Oceania: A closer look” section looks into that region and the plans to move many, if not all, of those developing countries (referring to notably The Philippines, Malaysia, Thailand, Vietnam and Indonesia) into the first world on the wireless front over the next several years. Ericsson thinks that total mobile data traffic in that region will quintuple between now and 2028.
(BTW, that’s why Ericsson may have underestimated its 2028 figures. There are going to be a lot of new people hopping onto the wireless train in the next few years.)
5G Driving Mobile Data Growth
That’s the where. As to the why, perhaps the most interesting section is “5G to drive all mobile data growth.”
That assessment probably doesn’t surprise anyone, but the incline of the rise should open eyes. In other words, what we’ve seen in the explosion of mobile device data usage over the last five years is a ripple compared to a coming tsunami in the next five years. Much of that will be in video, accounting for as much of 80% of mobile network traffic.
4G continues to grow as well, but the report predicts it will peak soon with a gradual decline in its market as 5G is implemented in more locales, regions and countries, along with the usual gradual tech swap out takes over.
“Fixed Wireless Access” is also a growing sector, per Ericsson. These are broadband wireless access points, currently numbering around 100 million, at businesses or on towers for public and private use.
Besides human users, smart devices for the Internet of Things are continually developing. Ericsson expects that market to get hotter, possibly by five times by 2028, with over 300 million access points by then. Northern east Asia is a particular hot spot for them.
5G Roadblocks
Among the things slowing even faster deployment, depending on the country involved, includes making radio frequency spectrum available.
Lower, less RF-efficient bands, below 7 GHz, are the first auctioned off, but they realize the weakest, though cheapest, performance. These bands propelled 3G and 4G in most technologically capable countries and are the technology breeding grounds for developing countries.
Now it comes time to fill out the 7 GHz group and move to the 24 GHz band and above, where 5G can flex its muscles. Being able to operate in multiple bands allows for efficient service uses — low-bandwidth items, for instance IoT and voice-only traffic, can flow unimpeded while high-bandwidth-hungry video and gaming services can operate in the same network on a higher frequency band.
AR for Mobile
The report touches on augmented reality for mobile devices (think Pokémon everywhere 24/7!) and a slow acceptance of improved smart glasses and visors. Ericsson acknowledges the technology and its support ecosystem have yet to mature.
Looking forward, the report says: “As the AR ecosystem develops, traffic arising from AR usage could significantly impact the current forecast. The amount of traffic that will be generated over mobile networks, in addition to mobile broadband and fixed wireless traffic, will depend not only on the uptake and utilization rates of the applications, but also where the critical functions mentioned in the ‘AR devices’ section take place.”
That other processing location will be in a vast network of edge services and network-inhabiting hard and soft virtual processors — all utilizing 5G technology and networks.
On a less technical note, the report also describes a growing practice in flexible bundle packaging for services. These can include gaming, content aggregation, differing speed levels, shorter contracts, to appeal to consumers have more choices among service providers.
6G may already be on the horizon, but there’s still a lot to understand about the benefits — and limitations — of 5G, which is rolling out across the US but has yet to reach peak saturation. Dive into these selections from the NAB Amplify archives to learn what, exactly, 5G is, how it differs from 4G, and — most importantly — how 5G will bolster the Media & Entertainment industry on the road ahead:
Already progressing from early to mass adoption, 5G is enabling the transition from immersive services to metaverse experiences.
January 9, 2023
Posted
January 1, 2023
After Tests and Improvements, 5G Network Slicing Opens Up to Broadcasters
TL;DR
Network slicing is a capability of the 5G standard which is being tested and gradually rolled out. It enables operators to carve up their 5G network into slices that can be finely tuned to suit the needs of many customers.
5G Network slicing revenues will grow over 100 times by 2029 to reach more than $16 billion in revenue that that would otherwise not be generated.
Telstra, Ericsson and Qualcomm achieve new download speed benchmark of 7.3Gbps.
There are signs that operators will commercialize 5G network slicing over the next two years, finds the new 2022 “5G Network Slicing Operator Survey” from consultancy Heavy Reading. The emphasis initially will be on enterprise services, but broadcasters are also eager to use the technology to improve coverage of live events.
Network slicing is a mechanism to isolate a segment of the 5G network end to end in a local area for the specific requirements of a customer.
Rethink Technology Research predicts that network slicing will add revenues of $16.1 billion by 2029 over above what 5G infrastructures would have earned otherwise.
Its report further identified manufacturing as likely to generate the biggest slice of network slicing revenues by 2029 at 19% of the total, with energy/utilities and healthcare joint second on 15% each and M&E media/entertainment on 7%.
Yet “the surge” in revenues will not really begin until 2024 when there is substantial base of 5G Standalone infrastructure to build on.
Standalone (SA) represents the full 5G infrastructure including RAN (Radio Access Network) and Core, which is essential to unleash the full capability of network slices to enable differentiated services catering for multiple user groups and applications sharing the same physical network,” explains Rethink.
Broadcasters are keen to use 5G slicing to augment coverage and reduce the costs of outside broadcasts such as sports matches, mass public celebrations or news gathering. By their nature these are congested areas in which wireless bandwidth is in short supply and for which the only option until now has been expensive uplink by satellite.
Tests over the past couple of years among broadcasters and telco operators appear to confirm that the technology is on the verge of being viable for practical use.
TBS regional chief Karen Clark said the tests clearly demonstrated the effectiveness of 5G slicing for uplink of live, premium video feeds “to produce high bandwidth, low latency television from a congested venue, without the need for traditional wired infrastructure.”
Paramount (Australia and New Zealand) also partnered on the project. Its VP of technology, Dean Wadsworth, claimed the success of the trial “demonstrates that coverage of live events can be enriched with reliable links from roving crews, which can be more cost-effective.”
All parties point to exploring further opportunities in the near future.
Yet such event-based scenarios are deemed the lowest priority among telcos, as reflected in a Heavy Reading survey conducted last summer. Principal analyst Gabriel Brown suggests this may reflect the challenges with addressing demand that is short term/transient in nature with a relatively immature technology stack.
“Short term, network slice instances will have greater requirements on automation. Perhaps as slice management technology matures, this use case will rise higher on operator priority lists.”
A survey of staffers at telcos (or communications service providers) by Heavy Reading earlier this year found that the industry had a job to do to educate potential customers about the benefits of the tech.
Less than a third of respondents said “most customers understand the concept and see value in it,” which implies that two-thirds did not.
“Operators, and their vendor partners, will need to invest in customer education to demonstrate the value of network slicing,” advised Brown.
As an aside, Telstra and Ericsson partnering with Qualcomm Technologies just recorded a new 5G download peak speed benchmark of 7.3Gbps achieved at a Telstra live mobile site located at the Gold Coast, Queensland Australia.
This improved peak speed capability further will help Telstra to deliver network slicing. By adding improved peak speeds and capacity, Telstra says it can deliver more capable network slices to more customers.
Network slicing could potentially be used to reduce, control and uplift the video performance of major streaming services like Netflix and Google.
As Heavy Reading’s Brown explains, most of the traffic on broadband networks is generated by customer demand for services from OTT. Approximately 56% of global network traffic is generated by six companies, according to Sandvine.
“In mobile networks, it is logical to consider how network slicing may be able to improve the performance, efficiency, and user experience of the most in-demand services or enable new service experiences offered by these types of providers (e.g., virtual reality gaming, metaverse meetings, or similar).
“This is, however, a thorny topic, given issues related to net neutrality and because, in some markets, some telecoms are actively lobbying regulators to levy charges on OTT internet companies to carry traffic.”
Asked if they anticipate working with internet companies “to use network slices to deliver and monetize high volume OTT services,” Heavy Reading’s survey revealed that 40% of respondents say their company plans to do this, ahead of a more equivocal 31% that may do so, depending on the business case.
“Presumably, the thinking is that network slicing will provide a capability that improves the service, and the operator can somehow charge the OTT provider for this or monetize the customer via a revenue share,” surmises Brown. “In this analysis, it is tempting to ascribe this 40% result to wishful thinking by telecom respondents.
“An alternative analysis, therefore, is to be aware that what is normal in terms of telco and OTT working relationships today will not necessarily stay that way.”
As application performance requirements become more stringent, and as customer expectations increase and new services emerge, there will be a need to rethink and re-architect how telcos and internet companies interact. In mobile networks, 5G network slicing will potentially allow a closer working relationship that benefits customers.
6G may already be on the horizon, but there’s still a lot to understand about the benefits — and limitations — of 5G, which is rolling out across the US but has yet to reach peak saturation. Dive into these selections from the NAB Amplify archives to learn what, exactly, 5G is, how it differs from 4G, and — most importantly — how 5G will bolster the Media & Entertainment industry on the road ahead:
5G is set to generate $7 trillion in economic value by 2030, InterDigital reports, as it fuels a proliferation of connected devices.
December 27, 2022
Just Think About the Metaverse Like a Media Channel
TL;DR
Most Americans think the metaverse will be considered mainstream by 2028, according to a new survey from TELUS International.
Brands are expected to interact with consumers in virtual worlds — but there are limits and concerns.
Content moderation must be incorporated to ensure users experience a safe and inclusive environment. This will mean employing a mix of AI and human moderators to ensure a timely, accurate and inclusive review of online interactions.
The metaverse is already a media channel for brands. According to a new survey by TELUS International, around three-quarters of American consumers believe that brand interactions in the metaverse will one day replace those in the real world. In fact, 65% of respondents believe the metaverse will be considered mainstream in the next five years.
Half of those polled said they would choose one brand over another if it offered a superior experience in the metaverse. Additionally, more than a quarter (27%) indicated they would pay a 5% premium for a product or service that was supported by a quality metaverse experience, and 22% would pay up to 10% more.
“Just as the internet and mobile apps revolutionized the way we interact with brands and consume information, goods and services, the metaverse offers brands exciting opportunities to interact with consumers in entirely new ways,” Michael Ringman, chief information officer at TELUS, shares.
“Digital 3D worlds open up a window of opportunity for brands — it offers them a space that’s accessible, allowing them to connect with consumers globally in unique and interactive ways, providing consumers with an enriched customer experience.”
The pressure is on for brands that choose to engage with consumers in virtual worlds. The survey indicated they expect interactions with brands in the metaverse to be more engaging (53%) and better customized to their interests (49%).
When asked what would encourage respondents to interact with brands in the metaverse, the top response was the ability to realistically try out or try on products and services (41%).
There is, however, a limit to what surveyed consumers feel comfortable doing and purchasing in the metaverse, even with these enhanced experiences. For example, only 35% would buy a house or rent an apartment in the real world through the metaverse. This is in stark contrast to survey respondents saying they would feel comfortable gaming (79%) or engaging with a brand’s customer service (68%) in the metaverse.
There are concerns too. For example, 60% said they believe it will be easier for individuals to get away with inappropriate behavior in the metaverse and just 45% think brands are prepared to moderate content in order to keep users safe. Most people don’t consider AI alone to be enough of a safeguard against malicious content.
“Like we’ve seen with digital environments that have come before it, the metaverse is unfortunately not going to be immune to users who abuse these spaces, putting brand reputation and their customers at risk,” Ringman says. “As brands begin to explore this new platform, content moderation must be incorporated during the initial planning phase to ensure users experience a safe and inclusive environment. This will mean employing a mix of AI and human moderators to ensure a timely, accurate and inclusive review of content and behaviors.”
The metaverse may be a wild frontier, but here at NAB Amplify we’ve got you covered! Hand-selected from our archives, here are some of the essential insights you’ll need to expand your knowledge base and confidently explore the new horizons ahead:
Like the internet today, the metaverse will be ubiquitous and omnipresent, sitting in the background of most of our day-to-day experiences.
February 15, 2023
Posted
December 19, 2022
How MovieLabs, SMPTE and EBU Are Mapping Out Cloud Workflows
TL;DR
The guide explains media ontologies in simple terms, provides a useful discussion of mapping data across different information systems, and offers practical examples of how media organizations are using semantic web technologies to bring greater efficiency to real-world workflows.
Understanding and managing the complex relationships between all elements in the content life cycle — from scripts to assets to the tasks being performed across media workflows — requires richer metadata.
SMPTE, MovieLabs and the European Broadcasting Union have published a guide to working with cloud technology as part of the overall industry effort to standardize production and distribution in the cloud.
World Wide Web co-founder Tim Berners-Lee first proposed the semantic web in 2001. This was the concept of moving from the mere presentation of content on the web to actionable human and machine-readable data.
Movement towards such a web has been slow, SMPTE details in the guide, but may now be regarded as accelerating thanks to a convergence of mechanisms and specifications that make it more practical and more desirable. These include the cloud itself, which is not a requirement for the use of semantic web technologies but is certainly a catalyst; microservices and application programming interfaces (APIs); artificial intelligence (AI) and machine learning (ML); and media-specific ontology specifications.
As the guide outlines, the movement into the cloud comes with attendant expectations around automation, agility, and scalability and challenges in areas such as interoperability, portability, discovery, and orchestration.
“It is an ever more data-driven eco-system with an increased need for consistent, interoperable metadata and semantics to drive and manage distributed processes and workflows. Fortunately, semantic web technologies — which may be regarded as internet-native — have great potential to address some of these challenges, supporting the combination of standards-based machine-readability with the representation of human subject matter expertise.”
Unfortunately, there is a lack of awareness about what semantic technologies are, what ontologies are, where they are applicable, and how to deploy them.
“The shift of media workflows to the cloud — an ever more data-driven ecosystem — yields many benefits, including greater automation, agility, and scalability. But to realize these, organizations must successfully address challenges related to workflow interoperability, data portability, and the management of complex sets of assets,” said MovieLabs CTO Jim Helman. “Media ontologies provide the essential knowledge framework to address those challenges.”
What is an Ontology?
For the purposes of this paper, an ontology is a formal model that represents a given “knowledge domain” — meaning the entities that are meaningful within that space and the relationships between them — using a set of specifications developed by the World Wide Web Consortium (W3C): primarily RDF; RDFS; OWL; SKOS and SPARQL.
“In practical terms an ontology represents explicit business knowledge and provides the scaffolding for the core data infrastructure of an enterprise or a broader field,” says the Guide.
It goes on: Understanding and managing the complex relationships between all elements in the content life cycle — from scripts to assets to the tasks being performed across media workflows — requires richer metadata. An ontology provides a framework needed to support application and service integration, asset and content management, and search and discovery, among other functions.
The utilization of RDF in particular provides a mechanism for information exchange between applications without a loss of meaning and for creating linked data, meaning data that is interlinked with, and enriched by, data from heterogenous and distributed sources.
The paper warns that semantic technology is not a magic bullet. It does not necessarily replace other technologies and is not a good fit for every use case. It is not as mature as the relational database/SQL eco-system, which may be more appropriate for predictable and consistent data that is not characterized by many or complex relations, and for which there is a greater pool of expert human resources.
However, we learn that semantic technology can be smartly stacked with other tools and is in broad terms a good fit for cloud-based eco-systems, having its genesis as a web-based approach to knowledge management.
“Where there is likely room for development in the near future is in the media factory — the production and distribution supply chain and in media asset management and media processing workflows,” the guide states.
“As these migrate to the cloud or hybrid cloud/on-premises and microservice-based deployments, it will become easier to integrate semantic technologies into day-to-day operations, and more vendors will integrate them into their offerings.”
The paper concludes with a thumbnail view of all the various technologies discussed in this paper from APIs to Wikidata via Data Lake and Node.
“Consistent and interoperable metadata and semantics are key for connecting data sets along the value chain, managing distributed workflows, and integrating applications. They are also crucial for content management and search and discovery,” said Hans Hoffmann, head of Media Fundamentals and Production Technology at EBU Technology and Innovation. “This navigation guide is the result of a great collaboration between EBU, SMPTE, and MovieLabs, three key actors in this field, and it will greatly help the media industry in its transformation into a data-driven ecosystem.”
The cloud is foundational to the future of M&E, so it’s crucial to understand how to leverage it for all kinds of applications. Whether you’re a creative working in production or a systems engineer designing a content library, cloud solutions will change your work life. Check out these cloud-focused insights hand-picked from the NAB Amplify archives:
New Visual Language for Media Creation initiative is backed by DreamWorks, Marvel, Paramount, Sony, Universal, Disney and Warner Bros.
December 6, 2022
From Cloud to Edge and Back Again: What Comes Next for Live Streaming
TL;DR
Video accounts for more than 80% of all internet traffic and live streaming accounts for 60% of downstream internet traffic, making the need to resolve bandwidth challenges more urgent than ever.
For live streaming applications, the industry is turning to edge computing to help reduce latency and bandwidth costs by bringing processing and storage closer to users.
In edge computing, cloud providers configure edge servers in last-mile data centers as part of their CDN services, and content providers deliver streams to the edge servers that are closest to the user.
Edge computing is a distributed, open IT architecture that decentralizes processing power and could potentially reduce the need for large data centers for storage and delivery.
The forecasted value of the edge market across all industries is expected to be worth $180 billion by 2025.
With video accounting for more than 80% of all internet traffic, bandwidth utilization, escalating bandwidth needs, and energy costs all pose challenges.
For live streaming applications in particular, the industry is turning to edge computing to help reduce latency and bandwidth costs by bringing processing and storage closer to users. And live streaming accounts for 60% of downstream internet traffic.
If service providers want to meet the increasing consumer expectations to interact with video and to capitalize on fabled next-gen applications like VR, massive multiplayer mobile gaming, and multi-view video, then edge computing will give them a significant, well, edge.
“These [next-gen] applications are delay-intolerant and require real-time response to maintain users’ quality of experience,” Naren Muthiah, who leads strategy and business design functions for Cox Edge, an edge cloud service from Cox Communications, writes in The New Stack. “They are also bandwidth-hungry, resulting in escalating bandwidth costs and energy consumption.”
Having barely gotten used to transferring storage and compute processes outside of their own facilities and into the cloud, the next step for service providers keen to catch revenue from games or ultra-low latency metaverse activations is to work with communications service providers and CDNs at the network edge.
With edge computing, cloud providers configure edge servers in last-mile data centers as part of their CDN services. Content providers deliver streams to the edge servers that are closest to the user.
“Since the edge network is generally fewer hops away from the user, requested views can be streamed with minimal delay from edge servers,” Muthiah explains. “This can reduce latency compared to streaming directly from the content provider.”
One advantage of edge computing is that providers can offload the generation of different video streams to the edge servers. Such “virtual view” generation can also be adapted to suit bandwidth conditions and resources at the edge or on the client’s device to optimize quality of experience.
Edge compute vendor Videon is naturally confident on the potential of the technology to supercharge interactive content.
“Edge computing for live video streaming enables a host of flexible and reliable cloud computing functions to be brought to the point where video is created,” writes Streaming Media founder and president Todd Erdley. “Placing this capability as close to the video source as possible simplifies live video workflows, reduces latency, enables faster deployment of standardized protocols across networks of devices, and eliminates unnecessary operational costs.”
Erdley believes edge computing empowers live video broadcasters and content creators to continue innovating and building the functions and capabilities they need to create customized live video workflows. “Rather than dictating how they should operate, edge computing is an innovation-enabler that helps media companies shape their present and future.”
For example, he says that sports leagues and broadcasters can use edge computing capabilities to get more feeds into their production workflows without having to spend huge amounts on additional encoding equipment while also decreasing operational costs. Using edge computing at the point of video origination in concert with cloud computing “improved quality resulting from needing to encode only once vs. twice with the traditional encoder or cloud workflow.”
By doing more at the edge rather than in the cloud, Erdley claims that certain video use cases can halve OPEX costs and reduce latency from tens of seconds to under 200 milliseconds.
In this scenario, edge compute is complementary to workflows and processes — such as encoding — in the cloud. Taking a hybrid approach by using an edge computing platform to augment the cloud gives end-users, developers, and media companies the freedom and flexibility they require.
In a report from telecom consultant STL Partners, the forecasted value of the edge market is expected to be worth $180 billion by 2025 across all industries. The company also reckons there will be more than 1,500 network edge data centers built by telecom operators alone by 2025. Non-telcos, including CDNs like Akamai and Proximity Data Centers based in Oxford, UK, are also building out edge services. Demand is being driven by the main (hyperscale) cloud providers — Microsoft, Amazon, Google and Alibaba.
“Edge computing essentially allows companies to access the benefits of cloud closer to the end-user,” the report states. “The possibility of various business models when monetizing edge computing is attractive.”
Data analyst firm IDC defines the edge as “the multiform space between physical endpoints… and the core,” with the core defined as the “backend sitting in cloud locations or traditional datacenters.”
HP Enterprise says edge computing is “a distributed, open IT architecture” that decentralizes processing power. It says edge computing requires that “data is processed by the device itself or by a local computer or server, rather than being transmitted to a data center.”
Both definitions say that edge computing isn’t meant to occur at the data center, prompting the question of whether large data centers will continue to be the go-to model for both storage and delivery.
Based on responses to a recent State of Streaming survey produced by Streaming Media, the answer will involve a mix of small regional data centers focused on smaller towns and cities alongside the behemoth data centers located near major metropolitan areas.
According to the survey, industry respondents overwhelmingly (65%) plan to adopt an approach to smaller, regional data centers for their edge strategies.
Tim Siglin, founding director of the not-for-profit Help Me Stream Research Foundation, points out that the digital divide — those who can access fast broadband in rural or poorer communities — was thrown into stark focus during the pandemic.
“In rural areas local homes might have plenty of Wi-Fi and maybe even decent downlink connectivity to allow viewing of cached on-demand content, but almost no ability to backhaul (meaning limited ability to participate in Zoom classes, business meetings, or FaceTime with relatives),” he says.
He provides figures suggesting that this is a massively under-served market, so, even if there’s no political or moral motivation to bring the edge closer to home, there is a compelling commercial argument.
“According to World Bank estimates, on a global scale, approximately 44% of people live in remote or rural locations. While each of the individual pockets of connectivity is small, and the backhaul for live-event streaming from these rural areas may be expensive, in aggregate, this is not a small population that can be ignored from either a societal or economic standpoint.”
Siglin recruits Steve Miller-Jones, VP of product strategy at Netskrt, a company interested in getting content to the far reaches of the internet, which includes not just remote or rural locations but also moving targets such as airplanes, buses and trains.
“If we come back to how we think about capacity planning for large events or capacity planning going out five or 10 years in the future,” says Miller-Jones, “the statistical relevance sphere is about large populations that are well-connected. But there’s 44% of the world that, from a single-event standpoint, may not be significant, but it is relevant to our content provider and their access to audience, their increase of subscribers, churn rate, and even revenue.”
Trains have sizable captive audiences to access. On UK domestic services alone, with 3,500 trains and an average journey that lasts just under two hours, that’s significant access to nearly two billion passenger trips annually on the domestic rail, says Siglin (well, in theory, when those trains run and there aren’t strikes, Tim).
“So, it makes sense why solving the challenge of edge computing in this scenario means access to a significant and previously untapped audience that’s probably more inclined to consume content as they hurtle across the countryside.”
Data centers are shrinking with local smaller data centers springing up in towns. The edge can also be in mini-data centers in the mobile network — combining the benefits of edge with 5G.
To explain the concept of edge compute, let’s start with a 10,000-foot view using an analogy from Videon. Consider the first generation of mobile phones. The ability to make calls while moving or away from a fixed location was a significant improvement over the landline. Yet, the use case was centered around voice conversations — and later simple text messages. Landlines were technologically more advanced devices — but all the functions were built into the hardware by the manufacturer. If you wanted more or different features, you had to buy another phone.
Now compare that to the first smartphones. Although the initial use case was very similar, the difference was the ability to use applications. It’s true that the first applications smartphones shipped with were voice and text. But with a simple download from an app store, the smartphone became a mapping tool, web browser, taxi booking service, baby monitor — and today, a plethora of other different use cases. Voice calls and texting were just an application — rather than the sole purpose of the device.
This is the central tenant of edge computing for live video. Instead of having a fixed device that does just one video processing task, you can deploy a device that can do anything you program it to do based on its available processing power, storage and software applications.
Place this capability as close to the video source as possible to reduce transit cost and latency. If a workflow needs to change, then adapt the software rather than replace the device. To help mass adoption, just like the smartphone, it needs to be a simple and reliable “appliance” rather than a traditional PC to avoid managing the complex layers of disparate hardware, drivers, operating systems and peripherals.
The cloud is foundational to the future of M&E, so it’s crucial to understand how to leverage it for all kinds of applications. Whether you’re a creative working in production or a systems engineer designing a content library, cloud solutions will change your work life. Check out these cloud-focused insights hand-picked from the NAB Amplify archives:
Controlling costs is the single biggest challenge facing streaming service providers, according to Bitmovin’s new Video Developer Report.
December 5, 2022
A Remote Production Primer
TL;DR
Haivision offers a primer on the fundamentals of remote production — what it is, what the benefits are, and how to implement a remote production solution for your own workflows.
The advantages of IP and internet video streaming for remote production include more than just cost efficiencies, but also the potential for broadcasters to innovate with new ways to create and consume content.
This trend is likely to continue as broadcasters realize the benefits of reducing the need for travel, improving work-life balance, and being able to hire the very best talent no matter where they are located.
The recent dramatic acceleration in the use of remote production workflows shows no signs of subsiding, even for the biggest live events. The BBC and ITV, for example, are making use of a remote production workflow to switch feeds captured live in Qatar back to the UK. They are also sharing this technology to cut costs and support sustainability policies.
As more venues have become equipped with broadband connections, more broadcasters have adopted remote production over IP — not only is it much less expensive, but it has shown to have lower latency than older methods.
Here’s a primer on the fundamentals of remote production, courtesy of Haivision.
Remote production, sometimes referred to as the Remote Integration Model (REMI) or at-home production, is a broadcast workflow where content is captured live at a remote location while production is performed at a central location, either on-premises or in the cloud. Remote production is typically used for sports or other events, where having a full production suite on-location is not reasonable.
Cost savings are the principal reasons for moving to remote. “Deploying OB trucks and on-site production equipment is an expensive proposition requiring significant investment in logistical planning, video hardware, and support personnel,” Haivision explains. “In addition, set up times are long, and there are many moving parts to contend with, allocating, transporting, and setting up equipment, securing and provisioning satellite links, as well as coordinating staff schedules, travel, and hotel arrangements.
“By eliminating the costly and complex coordination associated with deploying OB trucks full of expensive equipment and on-site production teams there are substantial time and cost-savings to be made,” Haivision says.
In short, REMI allows broadcasters to do more with less. For example, a replay operator on-site at a sporting event might only be utilized for three hours during a four-day period. But if the replay operator is at home, they could be running replays around the world — all the time.
When it comes to live content, customers want more choice and they’re willing to pay for it. Haivision states that this demand is not limited to just high-profile, traditional sports leagues, but niche, minor, and second-tier sports such as college sports, volleyball and e-sports.
Remote production over the internet not only enables broadcasters to reach audiences with niche content, but it also allows them to increase coverage of a major event by permitting more feed from multiple cameras around a venue.
Options ranging from fan-cams in the bleachers and player or bench cams to streams overlaid with real-time stats and video with bespoke commentary give viewers more personalized viewing options while affording video service providers greater potential for targeted advertising. With no cost restrictions around broadcasting time, providers have greater flexibility in building programming around an event.
The workflow doesn’t have to be based on a central hub. It can be decentralized into multiple production locations while also using home-based staff, all thanks to sending video streams over low-latency internet connections.
This can also include bi-directional streams for live interviews with remote subjects and talent. Executives and other staff can also access low-latency streams to monitor live production from a laptop or mobile device using an encrypted connection to a cloud or on-premises stream gateway.
As in-house broadcast facilities deploy the SMPTE ST 2110 suite of video streaming standards, Haivision predicts that entire broadcast workflows will be IP-enabled over both public and private networks. Furthermore, remote production workflows encompass a mix of on-premises, at-home, and cloud-based elements for encoding, decoding, and video processing, all accessible via IP networks. Combined with the rollout of 5G, it seems the potential for remote production over IP is limitless.
The advent of streaming had many pundits predicting the end of broadcast television, but the ongoing transition to ATSC 3.0 shows that NextGen TV is on the rise. What’s more, legacy broadcast series have remained among the most popular content on streaming platforms worldwide. Learn about the latest broadcast tech and trends as well as what the future holds for over-the-air TV with the expert knowledge and insights you need from this hand-curated series of articles from NAB Amplify:
Controlling costs is the single biggest challenge facing streaming service providers, according to Bitmovin’s new Video Developer Report.
March 27, 2023
Posted
December 1, 2022
Viewing Behavior Is Changing and Here’s How Video Providers Can Adapt
TL;DR
Kantar’s latest survey on home entertainment trends confirms the economic crisis helping to set the conditions for ad-funded business models. Consumers are increasingly warming to the idea if it saves them money.
Kantar predicts growing use of “dynamic product placement” and says that smart TVs have reached a tipping point in penetration. In fact, we — and ad agencies — should get used to the term Advanced TV, which embraces addressable, connected TV streaming, and VOD.
Video game platforms and the metaverse are emerging media channels likely to see rapid growth in investment in 2023.
Although home entertainment is generally robust during economic uncertainty as people cut back on going out, inflation is impacting the video market. According to analyst Kantar in its year-end “Media Trends and Predictions” report, advertisers are advised to adapt spend accordingly.
Kantar data shows that market penetration for AVOD grew from 20% in Q2 2021 to 23% by Q2 of this year. Its latest study witnesses a clear trend for consumers cancelling some SVOD services to save money and a greater acceptance of advertising. The timing is right, says the analyst, to introduce ad-funded tiers to limit price-sensitive churn.
According to Kantar the winners in the platform wars will be those deploying “windowing strategies” that strike a balance between VOD and linear.
Broadcasters are adopting the aspects of VOD strategy that best fit their positioning while preserving their points of difference. Meanwhile, VOD platforms are adopting traditional concepts like appointment TV and curated content discovery via linear channels.
The market will shift away from all-at-once release strategies and box-set binging for new content in order to maximize revenues.
But there’s a caveat. “Ad-models risk creating two types of viewers: those with less disposable income who become over-targeted by ads, and those with more disposable income, yet are harder to reach.”
Although linear TV has been hit hardest by media inflation — WARC’s Global Ad Trends report finding costs jumping 31% — it is not alone.
The World Federation of Advertisers forecasts average inflation of 10% for advanced TV in the US in 2022 — a concept that includes addressable, connected TV streaming and VOD — compared to just 3% in 2020.
The WFA also reports high inflation for social videos. Paid social CPMs have also risen steeply since the start of the pandemic, up 33% between Q4 2019 and 2021, the report notes, with expectations that it will remain high over the medium term.
There’s even evidence of media agencies restructuring their teams to remove TV and digital silos to operate in a more holistic manner, in tune with the reality of a complex and growing AV ecosystem.
“As advertisers seek better value for their marketing investments against inflated costs, and as audiences splinter across devices and platforms, media agencies will need to adapt,” Kantar advises.
This is likely to mean further investment in digital skills with an emphasis on tech, data, analytical and mathematical experience, and potentially restructuring teams to take the necessary holistic approach to video planning that merges linear broadcast with online video.
“It will also require discarding rivalries between digital and AV teams and an end to siloed channel planning.”
Dynamic Product Placement Edges Closer
Dynamic product placement — enabling a product, billboard or screen featured within content to be substituted or overlaid with a different brand or advert — is growing. Like addressable advertising, with the right data different viewers could be shown tailored ads.
“However, technological possibilities will need to be balanced against what’s acceptable to audiences,” Kantar warns. “A negative impact may be inadvertently achieved if a placement is clearly anachronistic, jarring or out of place. Tailored content should be closely monitored.”
Growth in Smart TV Use
Kantar reckons we’ve now reached the tipping point in smart TV saturation and usage, with consumers increasingly using their TV to stream content directly, connecting via apps and inbuilt IP services.
“Indeed, data from the researcher’s ComTech tracking study shows that across France, Germany, Great Britain, Italy, and Spain 64% of households own a smart TV.”
Smart TVs are not only being used, but they’re increasingly becoming a preferred screen for viewing streamed content. In December 2021, 88% of video streamers used their TV to access content across the US, Germany and UK.
Kantar notes that, “As video delivery moves towards an all-IP future, smart TVs will have a critical role to play as the main entertainment gateway into the home.”
The Metaverse is a Media Channel
Despite the hype, the metaverse has not yet made huge inroads. However, Kantar’s study suggests it will be a high riser for marketing activity in 2023, with more thought being given to creating immersive brand experiences, virtual product testing, and branded NFTs to use within metaverse environments.
Starting from a much lower base in budgeting, the metaverse sources the fourth highest increase in budget changes for marketers.
Ahead of the metaverse in this respect — though clearly linked through platforms like Fortnite and Minecraft — is gaming. With almost 3.2 billion people playing video games in 2022, spending a combined total of $196.8 billion, Kantar highlights a growing opportunity for brands in this space.
Creative agencies are leaning into the biggest and most visually striking games to reach new audiences and add gaming. Kantar advises broadcasters to consider adding platforms like Twitch to the media plan.
A new report helps marketers challenge previously held assumptions about who their audiences are, where to reach them, and how they engage.
November 26, 2022
Streaming Strategies: Where Do Broadcasters Go From Here?
TL;DR
While broadcast TV still supplies most viewing time, streaming is rapidly eating into that viewership.
Ad dollars are migrating toward streaming programmers, as Netflix and Disney+ roll out paid subscription tiers.
Some broadcasters have responded to that challenge with their own streaming apps, but that may ultimately be insufficient.
As consumers adjusted to remote, internet-based work during the pandemic, many also changed their tune about the desirability of streaming services (and not just talking about the pre-2020 Big Three of Hulu, Netflix, and Amazon Prime).
Pandemic-era restrictions have been lifted, but streaming TV’s popularity hasn’t waned… actually, it is becoming the main source of TV entertainment — in paid and FAST versions — for viewers.
Until recently, OTA broadcasters have primarily jockeyed against their FAST brethren, whose content budgets more closely aligned with the more modest prime time shows cost. By virtue of their subscription cost, paid-tier streamers have traditionally been in a different lane, more equivalent to premium cable than linear TV.
However, Netflix and Disney+ have entered the ad-supported streaming game, offering their vast content libraries for a fraction of the commercial-free costs. What’s next — a Disney FAST service? The very idea is rattling some cages and prompting think pieces.
What’s Broadcast’s Future in a World With Ad-Supported Streamers?
International technology consultancy Omdia has released a short study, “It’s Time for Broadcasters to Think ‘Streaming-First,’” (free after registration) that offers some guidance, advice, food for thought on where the “TV” market is/or may be going.
Some broadcasters have responded to the streaming threat with apps for streaming their content but Omdia describes that performance as “middling.” Omdia also says that broadcasters aping the streamers’ with their own “full-fledged subscription services looks, at best, a minor revenue generator and, at worst, a costly dead-end.”
So what to do? Omdia pitches focus: “Broadcasters would be better off making their free-to-watch apps the first and best place to watch their most prized content.”
It rationalizes: “The reach of the U.S. streamers’ services will include only those willing to pay for ad-supported subscriptions — and exclude higher-value subscribers to ad-free plans that many advertisers will want to target. Fully free-to-watch services have the potential to reach a country’s entire online population.”
Some of the data presented has an apples-to-oranges feel to it; for one thing, it’s based on U.K. audiences and internet users, so factor that in.
But some human behavior is universal. American streaming content delivery powerhouses, like Netflix, Amazon and Disney+, are doing well in international markets, including the United Kingdom. And U.S.-based broadcasters aren’t the only ones looking over their shoulders at the streaming leviathans.
The Omdia study also notes the current international wave of economic unease could play a key role in decisionmaking. Many consumers aren’t old enough to remember the “inflation” years of the late 1970s–early 1980s. Advertising spending could be affected by consumer and business retrenchment. Add to that the increase in online ad spending — Omdia expects online to pass linear TV ad revenues as soon as 2028 — there are only so many ad dollars to go around to feed an increase in the number of ad-hungry mouths.
Omdia concludes: “As with all things TV, the urgency will vary by market, particularly where linear remains strong. Broadcasters that get the timing right have the chance to catch a rising tide caused by the U.S. streamers, while those that overly delay may become adrift as viewers’ and advertisers’ preferences change.”
Of course, for broadcasters it may not be an either/or dilemma. ABC is part of the Disney enterprise; CBS is a cousin to streamer Paramount; and NBC is part of, well, NBCUniversal, another streamer. Each of these broadcasting entities used to lead a corporate powerhouse, now they are each part of a multimedia content-producing hydra.
The question everyone avoids is: What will happen to the “over-the-air” broadcast portion of broadcasting. Grist for another mill.
Will OTA vs. Streaming Be the Final Face Off?
As much as streaming seems to upend the TV viewing ecosystem, it might, in the long run, be only a minor change akin to moving from black and white TV to color. Obviously, in the short term, this is critical. But how long will this model of viewers (AKA ad eyeballs) passively watching a TV/panel remain a paying business model? A growing broadband world contains the seeds to bring it all down. How will current broadcasters and advertisers react to challenges approaching?
Already difficult-to-analyze media, such as YouTube and TikTok, garner millions/billions of viewers who spend countless hours watching online video rather than traditional television. And advertisers spend millions/billions of dollars there, sometimes in lieu of OTA ad spending.
Also consider a brand-new phenomenon: Kids who have their own media device(s) and devote huge amounts of time to it, no matter where they are or what they are doing (even watching traditional TV). They are looking at the little screen — Twitter, Instagram, the ADD-feeding TikTok — and any new shiny object arriving designed to keep them married to it. That’s time away from the big (ad-revenue producing) screen. And these are the kids many advertisers are aiming to capture and have spent billions in TV ad time over the decades devoted to that goal.
They are young and are growing up in that world, increasingly away from the current broadcast/streaming TV utopia of predictable programming time and safe, somewhat reliable audience measurement. They might be an in-between generation preceding the ones that will only know computer-oriented programming coming from multiple sources, including games. The current program “formats” mean little to them and only exist as one of many options.
Experience in a 4K/8K world, possibly spiced up with interactivity, is something hard to imagine today but will be liberating and chaotic to content creators in the near-ish future.
This macrothreat might be closer than realized. Technology is changing at a faster and faster pace while “generations,” each seeking their own identities, are getting shorter and shorter. The cycles turn faster.
Industry analyst Brett Sappington, who leads the video and entertainment research practice at global insights firm Interpret, chats about the evolution of streaming and its impact on the pay-TV model on the Light Reading podcast with senior editor Jeff Baumgartner.
“Before you would ever get to a subscriber floor, I think [the pay-TV industry] fundamentally has to change… to make the economics work,” Sappington comments. “We’re really looking at a pretty significant shift in how pay-TV works in the next few years just to make the economics work out.”
Listen to the full conversation in the audio player below:
2023 may be the right year for smaller businesses to explore their relationship to the creator economy, as bigger brands scale back dollars devoted to creators.
It’s more important than ever to pair your message and methodology with the right social network. Users have different expectations on each app, and cross-posting ain’t gonna cut it.
TikTok and Instagram are for more than entertainment, and Google is no longer the only game in town for search.
Chatbots are going to be clutch, as social spending goes up and marketers struggle to tackle customer service expectations.
Social media management company Hootsuite has released its Social Media 2023 Trends report. Check out some notable takeaways.
Smaller companies should start to explore partnerships with creators.
Just as marketing budgets began climbing out of the pandemic slump, recession fears have started taking effect. Larger companies are spending less on creators, which isn’t great news for influencers, but Hootsuite posits a silver lining: smaller and midsize businesses can take advantage of a more open playing field.
According to the report, “72% of small businesses (those with less than 100 employees) don’t work with creators in any capacity, while nearly 42% of businesses with over 1,000 employees do work with creators.”
Cost is cited as a primary reason for the discrepancy, but Hootsuite notes the majority of “creators are paid less than $100 US per post.” At the high end, 12% of creators can make up to $9,999 per post; 2% of interviewees reported making between $10,000-$24,999 per post; and only 1% of them said they made north of $25k on a single post. Nearly a third are also compensated via products or other freebies.
Money spent correlates with confidence levels and ROI expectations.
Those who’ve put money on the line expect it to pay off. In 2021, 83% of respondents told Hootsuite that they had “some level of confidence” in social media marketing’s ROI. That was up significantly from 2020’s 68%. Hootsuite rephrased the question this year, asking about confidence levels related to the usefulness of social media for marketing or engaging with audiences; that garnered a 96% confidence rate.
Rolling with the (new-ish) punches.
In terms of what 2023 might hold for the social media networks’ new features? Well, Hootsuite hopes the copycat trend is on the way out: “Adding competitor capabilities to one network doesn’t change the perception people have spent years forming of what a specific network is meant for,” so Instagram Reels are unlikely to pull users away from TikTok. Hootsuite also posits that “stealing a competitor’s features may actually have a negative impact on the perception of a social network.”
For marketers, who can’t actually control this, Hootsuite advises to avoid cross posting and also “spend less time worrying about which copycat feature to start using next and more time exploring platforms that best reflect their business goals.” They name drop WaPo as an example of a company differentiating its social content effectively.
Don’t sleep on social commerce.
In the US, “social commerce sales [are] set to grow 34.4% this year to $53.1 billion” – and it’s already booming outside North America. However, there’s been a lack of enthusiasm and companies reacted accordingly: “Meta decided to shut down its live commerce functionality on Facebook and affiliate product tagging option on Instagram. TikTok has also scaled back its ecommerce plans, delaying the launch of live shopping.”
As Billy Joel would say, “It’s always been a matter of trust.” For survey respondents, that’s the problem: “Their biggest concern is that their purchases won’t be protected or refunded. They’re also worried about the quality and authenticity of products and sellers on social media. And the third most common concern stems from trust in the social networks themselves; people say they don’t want to share their financial information with the networks.”
But those who do make the leap are consistent. Insider Intelligence reported that social spend in 2022 is up 27% from the prior year, reaching $518 per buyer, and that’s expected to increase to $935 in 2025.
Social search is kicking Google’s @$$.
Well, in some demographics, at least.
The youth are searching TikTok and Insta to learn what to eat or buy and where to go to do it. Amazingly, Hootsuite reports that “40% of 18- to 24-year-olds are now using social media as their primary search engine,” per Google’s own research! Additionally, “more internet users aged 16 to 64 visit social networks than search engines on a monthly basis.”
However, TV and word of mouth are (so far) still beating out social in the world of product discovery.
Digital customer service matters. A lot.
Just because people have returned to brick and mortar doesn’t mean they don’t care how online transactions are handled.
Apparently, chatbots and AI help can go a long way to handle dissatisfied customers online. Automation can handle FAQs and fulfill orders, while keeping headcounts low and queues shorter..
As of 2022, “only 26% of organizations that said they use social as a primary customer service channel told us they use chatbots on social and messaging apps. And of the organizations that do use chatbots on social and messenger apps, more than half of them (53%) adopted chatbots at some point during the pandemic.”
And some of this is being handled outside the customer service team. Hootsuite says “49% of organizations said that social customer service was usually or exclusively the responsibility of the marketing team.“ But that doesn’t mean that most of them are confident in the role; “Marketers are neither trained to respond to customers, nor is there an incentive to if that responsibility sits outside their remit and with another team.”
Celebrity endorsements have become the gold standard for creating fast wealth, making social media influence more important than capital.
November 15, 2022
How Real-Time Technology Is Changing the Game
TL;DR
Real-time technology is providing a competitive advantage for M&E content creators, according to a new survey commissioned by Epic Games.
The advantages of real-time workflows include business benefits such as saving time and money, right through to fostering greater creativity and improving quality of output.
Across M&E, and other industries, there are clear trends towards interactivity and immersion in production processes. These trends parallel the broader technological trend of consumers spending more time in immersive, interactive virtual worlds.
Cost-efficiency, time savings, improved collaboration, and greater productivity are just some of the benefits that have convinced 85% that game engine technology is very important to their company’s future.
Real-time technology is providing a competitive advantage for media and entertainment content creators, according to a new survey from Forrester commissioned by Epic Games.
The use of game engines and more powerful GPUs, among other tech, is enabling once time-consuming changes to be made, experienced, and iterated on in real time.
It’s not just M&E either. Many industries, including automotive and architectural design, are adopting the technology as a means to improve the economics and scalability of production.
Companies surveyed in this new report are from Media & Entertainment along with Architecture, Engineering & Construction, Automotive & Manufacturing, and Training & Simulation.
Unsurprisingly, most companies of those surveyed agree they need visualization solutions to support more collaborative workflows. Many also expect to hire at least 10 employees with real-time skills over the next two years.
The film and TV industry in particular has embraced real-time technology, which has become the backbone of virtual production.
There’s a solid consensus, too, on the reasons why real-time technology is being adopted across M&E. These are:
To experience projects in an immersive environment and at human scale.
To reduce the time taken to create high-fidelity rendered images/animation.
To co-create complex designs with stakeholders and customers.
“With real-time, you don’t go backward,” says Doug Oddy, a senior VFX producer at Sony Pictures Imageworks, who is quoted in the report. “You’re just working live — in the moment. Even with fewer crew, you’re able to continuously create brand-new ideas all along the way.”
The technology has led to significant leaps forward in many different areas of Media & Entertainment production. For example, scenes and sequences can be mapped out and explored in accurate 3D space from the onset of pre-production, enabling filmmakers to involve their department heads early on as they experiment with different shots and storytelling techniques.
Realistic digital humans used to take months to create. Now tools like MetaHuman Creator (from Epic Games) are bringing that down to mere minutes.
In-camera VFX leveraging LED walls “provides a much more immersive method of filmmaking than using traditional green screens” says Forrester. The technique enables the capture of high-quality shots in camera and on set.
Game engines also allow for more iteration and offer the ability for filmmakers to interact with animated stories in ways similar to shooting a live-action story. This, say the report’s authors, gives them the freedom to explore their shots as they would on a physical set with real actors.
Broadcast and live events are also benefitting from adding live VFX and graphical overlays to the viewing experience. For brands, Forrester predicts such technology has increased potential audience sizes by an order of magnitude.
Seventy-two percent of those polled rate the ability to repurpose a single creative asset as an important or critical requirement of game engine adoption.
This leads Forrester to suggest that we’re heading for the era of “transmedia assets” — the ability to take a single digital asset and reuse it across an entire pipeline, from design to manufacturing, marketing, advertising, and finally for use in simulated environments.
“The physical version of products may often have a digital counterpart in virtual worlds, enabling you to express yourself in both realms. Film studios that build vast CG worlds as backdrops for their stories could reuse them for location-based experiences, promotional shots and videos, or maybe even spin-off video games. Digital versions of real-world buildings may populate these virtual worlds. You will be able to drive a CG version of the car you drive on the road in the digital sphere.”
With commerce and audiences moving inexorably into metaverse-ian virtual worlds built on real-time platforms like Fortnite, Minecraft and Roblox, Forrester thinks there’s a whole new frontier of opportunity for business.
Technology, media and telecommunications (TMT) companies perceive AI as more critical to their future than any other industry sector, Deloitte shares in its latest report, “State of AI in the Enterprise.”
The Fifth Edition of the report surveyed 2,620 global business leaders. Of those, 72% in TMT companies strongly agree that AI is very important to their ability to stay competitive over the next five years, 12 percentage points higher than any other industry.
But business leaders in every industry, from retail to finance and healthcare, also deem AI to be critical to success over the next five years.
TMT companies recognizing the importance of AI far more than any other industry should come as little surprise. The first brands that come to mind in the industry are often digital natives such as Google, Amazon and Facebook — brands that are often considered synonymous with AI sophistication since AI is used extensively in their commercial products and services (many of which are foundational enablers across all industries).
However, that’s not the whole story. Some of the legacy brands within the TMT space, such as AT&T and Hearst, are also among the most significant. Survey data indicates that telecommunications and media companies tend to be the furthest along at embracing AI.
“This maturity is likely attributed to telecommunications’ longstanding focus on operational efficiency and, for media companies, the rapid uptake of digital marketing techniques,” Deloitte says.
“Customer acquisition and retention efforts have also driven the development of AI capabilities for telecommunications and media companies and are reflected in the prevalence of these use cases across all sectors.”
Regardless of industry, Deloitte also reports that the general workforce is increasingly optimistic about co-working with AI. Eighty-two percent of respondents indicate that their employees believe that working with AI technologies will enhance their performance and job satisfaction.
The report emphasizes that organizations have begun to realize the benefits of using AI to augment the workforce, rather than replace as many jobs as possible. Many are taking action to support a human-machine collaboration strategy: 43% of all respondents reported their organization has appointed a leader responsible for helping workers collaborate better with intelligent machines. Also, 44% of all respondents reported using AI to assist in decision-making at senior-most levels.
Despite this, data also shows a significant gap in further actions needed to enable the hybrid human-machine workforce. Only 21% of all respondents reported actively educating workers on when to apply AI most effectively, 25% reported providing access of user-friendly AI systems to nontechnical/nonspecialized workers, 30% reported including workers in participative design of AI, and 36% reported redesigning organizational practices in light of a mixed human and machine workforce.
An important element highlighted by the report is that if AI is to be scaled across an organization, then leaders within that business need to foster trust in algorithms.
The survey found that “risks around lack of explainability and transparency in AI decisions, data privacy or consent mismanagement, and safety concerns about AI systems, among others, all loom large as ethical risks that concern organizations.” In fact, 50% of respondents cited management of AI-related risks as one of the top inhibitors to scaling AI projects.
“Trustworthy AI ultimately hinges on ensuring that rigorous processes as well as checks and balances are in place,” Deloitte continues. “To that end, organizations can often achieve better outcomes when they adopt an ethical AI framework that aligns with trustworthy AI principles.”
A final noteworthy point from the report is that technology and talent acquisition are no longer separate when it comes to AI. Given that even the most advanced organizations are still early in their transformations, a majority of organizations still prioritize bringing new AI talent into the business from outside, rather than retraining existing workers (53% versus 34%).
A significant majority of the survey respondents acquire AI as a product or service (65%) rather than attempting to build their own AI solutions in-house (35%), leaning particularly on off-the-shelf solutions at the beginning of their journeys.
“Organizations need to strategize their approach to AI based on the skillsets they have available, whether they derive from humans or pre-packaged solutions,” the report advises. “Companies must develop their AI strategies in a tight talent market, with growing off-the-shelf platforms, tools and accelerators that can jump-start a company’s transformation.”
Beena Ammanath, executive director of the Deloitte AI Institute, says: “The report outlines how AI can propel businesses beyond automating processes for efficiency to redesigning work itself. While organizations face the challenge of middling results, it is clear successful AI transformation requires strong leadership and focused investment, a through-line consistently evident in our annual research.”
Generative AI — including text-to-image, and soon to come text-to-video — apps have caught the public’s imagination. It’s not hard to see why. They’re fun, cheap and useful.
The popularity of these apps has captured the attention of big tech companies, too. During the summer, TikTok launched its AI Greenscreen feature, which allows users to type text prompts to generate an image that can be used as a background in their videos. Meta also introduced Make-A-Video, Google launched Imagen Video, and Microsoft unveiled Image Creator.
The tech is also ushering in a new era of creators, helping people become first-time creators.
According to Lindsey Gamble, an influencer marketing and innovation strategist, “People who may not possess the skillset to take an engaging photo or create a video, now have the opportunity to do so with this technology. AI lowers the barrier to entry for content creation, even more so than what the iPhone does for photography or TikTok does for video.”
Gamble explains that established creators can incorporate AI generators into their existing creative processes or workflows, “especially when it comes to ideation and inspiration,” such as generating images and photos for storyboards.
Generative AI can also be used to expand into other creative works while saving time and money. For example, a creator that typically outsources graphic design work could use AI to handle it themselves and benefit from doing it for free or at a much cheaper cost within seconds.
So, these are real world practical uses of an AI tool. What’s not to like?
One of the main issues is the challenge to copyright.
“Some argue that people are infringing on copyrights and plagiarizing because generators use existing works from photographers, videographers, artists,” Gamble notes. “Commercializing AI-generated content can be particularly problematic. Some have started monetizing their creations, such as selling prints of them on Etsy or licensing them to stock photo platforms, which has caused a great deal of pushback from certain creative communities.”
An argument can be made, though, for people who use generators. The specific images and videos that are generated depend on the exact text they input, including the combination of words and order of words.
“People must know how to manipulate the software, such as adding and refining text prompts to get their desired results. Although different than typical skillsets, leveraging technology is a skill in itself.”
Other challenges revolve around biases in the algorithms, using generators to create harmful content, and misinformation (or deepfakes) — many of which are the same challenges that social media platforms face today.
Gamble doesn’t address this, but he does suggest that “the addition of revenue sharing or licensing will help make others more comfortable.”
Generative AI is only just getting started. It’s going to improve rapidly. Sooner rather than later “people will view it similarly to how artists may sample existing songs to create new songs,” Gamble says. “There will also be more established norms, including how people look at the use of creating from others’ existing work.”
As someone suggested recently, the metaverse is going to be too big to be created by humans alone. There aren’t enough computer artists in the world to make it. That’s where AI-generated visuals come in and where independent creators can possibly make a killing.
“AI-powered generators will help creators accelerate their creativity and speed up their productivity, allowing them to churn out content, build audiences, and monetize faster than ever,” Gamble writes. “As a result, there will be even more creators in the ecosystem, which is a benefit for all.”
Even with AI-powered text-to-image tools like DALL-E 2, Midjourney and Craiyon still in their relative infancy, artificial intelligence and machine learning is already transforming the definition of art — including cinema — in ways no one could have ever predicted. Gain insights into AI’s potential impact on Media & Entertainment in NAB Amplify’s ongoing series of articles examining the latest trends and developments in AI art
Most of us would prefer not to pay for content, but when we do it seems like movies and TV shows alone are not enough to get us to open our wallets. Every service has them, a lot of them, and they’re all relatively and equally high quality.
According to a new survey, the winners in the streaming wars will be the companies that diversify into news, sports, video games, or preferably a mix.
The report, “What Will They Pay For? The Mind of The Modern Subscriber,” from Consumer Insights — the research division of Publisher’s Clearing House — polled 15,000 Americans and teamed with former cable network chief-turned industry consultant Evan Shapiro to analyze the results.
According to the report, the answer is movies and scripted TV (39%), trailed by sports (12%), followed closely by music and podcasts (11%). At 10%, “other” is a category to keep an eye on, the study advises.
“It is not binary. We know nothing beats free. Yet we also know that people will pay, at the right price, for the right stuff,” says Shapiro.
Among 18- to 34-year-olds, gaming jumps to 15% and music/podcasts spikes to 16%.
“It is glaringly clear is that having movies and TV shows are now, simply, table stakes,” Shapiro writes. “They are not at all a differentiator: Every service has them. In streaming TV, scripted and non-fiction TV are an expensive, hit-driven, share-shift model. Consumers of all ages and incomes will sign up for them, to binge something. But if that is all you have, they will not stick around.”
He believes trends increasingly favor the tech giants. “It’s no surprise that the two streaming players with the most data — Apple and Amazon — are both heavily invested in bundling numerous genres of services. It makes perfect sense that Microsoft, which already offers game and productivity products is getting into business with Netflix — and the likelihood of a bundle for all of them is high.”
“Playing across genres and needs is now key to true lifetime value for your subscribers. Content services who want to acquire and keep subscribers every month, with low churn, must provide more than one kind of content, and/or offer more than one type of service.”
— Evan Shapiro
Analyzing the survey, Deadline’sDade Hayes observes that Netflix had recently been making significant investments in games and interactive content. “Disney has also described a larger goal of conquering not only streaming but the metaverse, possibly a tacit acknowledgement that a batch of Mandalorian-style original hits alone may not carry the day.”
“Apple and Amazon both offer films, TV, sports, audio and gaming,” Shapiro notes. “Amazon also offers free home delivery,” as “key to the lifetime value, low churn and high revenue-per-user of their huge Prime membership.”
While Disney+ only has movies and TV, a Disney Bundle offers sports, news, and even local content. “This is why their bundle churn is now lower than Netflix’s, and how they surpassed Netflix for subscribers worldwide,” he thinks.
Even Paramount+ offers TV, film, sports, news, and local content; and it recently created a bundle with Walmart, “a very significant ‘other,’ that specifically caters to the most price sensitive of subscribers.”
“If content is bundled into consumer lifestyles — with optionality and around their passions — there is a far greater opportunity to entertain and retain subscribers across their lives, without the constant threat of churning for the exits.”
Evan Shapiro
Shapiro believes there’s hope for the paid content business model yet. In particular, and perhaps counterintuitively, the silver lining is in youth.
He says 200 million mostly young people are paying for Spotify subscriptions and another 90 million are paying for Apple Music. Hundreds of millions of paying users are playing Fortnite, Roblox, and Minecraft.
“We have trained three generations (Millennials, Gen Z and Gen A) that (despite social media) great content is often what you pay for it. Despite their addiction to free video on TikTok, two thirds of America’s young people are ready to pay for what they feel they need.”
Shapiro thinks he’s hit upon the solution to churn: It’s bundled content, formats, and services. “If content is bundled into consumer lifestyles — with optionality and around their passions — there is a far greater opportunity to entertain and retain subscribers across their lives, without the constant threat of churning for the exits.
“Playing across genres and needs is now key to true lifetime value for your subscribers,” he insists. “Content services who want to acquire and keep subscribers every month, with low churn, must provide more than one kind of content, and/or offer more than one type of service.”
In discussing and assessing a work of art, historically, it seems that the context in which it was created matters. But in an age of AI-generated images, videos, and writing we may need to consider whether that’s the case anymore.
“How can context exist if the art is being created by artificial intelligences with no awareness of society, norms, politics, trends, movements,” poses Nir Zicherman, global head of audiobooks at Spotify and co-founder of podcast platform Anchor.
Zicherman weighs in on the debate about the value of AI-generated art in his Medium post titled “Art is Dead. Long Live Art. And DALLE-2.” Some argue that because machines clearly lack the actual lived experience of a human being (and all art is a reflection and response to being alive), then a work of art produced by AI is clearly not equivalent.
What happens when that context is removed? Or, more exactly, what happens if the context of production is no longer of significance?
Zicherman presents the example of a child’s drawing of a blue rectangle that is likely at some point to be discarded no matter how sentimental the parents might be, in contrast to this 1962 painting by Yves Klein, “IKB 191,” which is considered a masterpiece of post-war French art.
“One might say that much of the beauty or ugliness we see in any form of art comes from our knowledge of where it came from. Let’s be real though. If DALL-E had painted IKB 191, would anyone even know?”
It’s not just critics or the “art world” that extracts value from the context in which art exists.
Context can be related to all our subjective experiences of consuming the art, Zicherman argues. For instance, reading a coming-of-age novel while coming of age yourself might change your perspective on life, while seeing the TV show everyone loves a year or two too late might drain it of any significance for you.
“On the other hand, context can also arise out of how a work of art was created, as well as the time and place in which it came to be. Would Citizen Kane, created today, matter as a film? Would The Beatles, as an up-and-coming retro rock band in 2022, be considered by anyone ‘the greatest band of all time?’”
These questions matter, he says, because we now live in a world where it is possible for machines to generate virtually the same output a human might create:
“What’s even more incredible is that it is now possible to create output humans would never have created. We can generate an infinite number of Picasso-esque paintings, half a century after the artist’s death.”
“How much will future older generations and younger ones disagree about not only which art is great (as all generations do), but about what greatness in art even means?”
— Nir Zicherman
And this trend will only continue, as more and more of the “art” being created each and every day can now exist devoid of any “context” in the traditional sense of the word.
Zicherman points to how that forces us to ask ourselves a different set of questions: Given that new reality, which art will we value and why? What will differentiate the great works from the bad ones? Will we finally reach a point where art can exist on its own, for art’s sake?
This phenomenon is hardly just relevant to images of course. OpenAI (the research lab behind the text-to-image generator DALL-E) has started working on Jukebox, which promises to do for music what they have done for images.
We are only a few years away from videos being generated in the same descriptive way. Surely feature films and entire television shows will follow suit.
So, given how quickly this space is moving, it begs the question of what if children growing up now and falling in love with music, books, and movies during their formative years ascribe entirely different meaning to their art? Would it matter to them if the art that speaks to them was generated by a machine (fed perhaps on the greatest artworks created by humankind)?
Perhaps it matters to us, the older generation more so, because it’s scary and unfathomable that art — which again is how society learns about itself and grows culturally richer — could somehow be outside of our control and generated by banks of servers.
Zicherman considers: “How much will future older generations and younger ones disagree about not only which art is great (as all generations do), but about what greatness in art even means?”
The Filmmaker Bot’s Funeral
By Abby Spessard
“Jan Bot,” the first robot filmmaker in the Eye Filmmuseum in Amsterdam, has been unplugged. Creators Pablo Núñez Palma and Bram Loogman take a walk down memory lane through Jan Bot’s creation with Hyperallergic’s Ben Nicholson.
Jan Bot is an AI that produces experimental short films using the archived material in the Eye Filmmuseum. “Conceived as a way to bring a physical archive into the internet age, the next phase will be posthumously archiving Jan Bot’s oeuvre via NFT,” Nicholson says.
So where did this robot filmmaker creation come from? “I was sharing a studio space with Bram,” Palma starts. “We were recently graduated from a master’s program at the Film Academy in Amsterdam. We had a workshop with found footage filmmaker Jay Rosenblatt. It involved some experimenting with a film collection from Eye called Bits & Pieces.” This collection of clips was started by Eric de Kuyper and Peter Delpeut in the 1990s. “The primary rule for inclusion was that each clip must, in some way, have caught the attention of the curators,” Nicholson explains.
Inspired by the collection, Palma and Loogman wanted to create something relevant and modern with current online spaces. “Bram is a developer, so then we thought, maybe we can make something that creates content — no matter what kind — and is concerned with quantity, not quality. Hopefully this might solve a problem for the Filmmuseum and give us a nice way to experiment.”
Coded with Einstein’s concept of “metric montage,” where film clips are sequenced based on their musical meter, Palma reflects on the examples they used for Jan Bot. “Eisenstein is one of the few filmmakers who talk about syntactic editing… all about the rhythm. He talks about how, by having a certain form of edits — like ‘metric’ — you can start creating momentum by increasing speed and making shorter and shorter shots. Basically, that’s all we could do, because we didn’t know what the shots would be or how they would go together.”
But even with the recurring set of filmmaking practices and parameters, Jan Bot never became repetitive or lost any of its AI interfaces. “If you see it from the perspective of an author, I would say Jan Bot follows the same tradition, because it does the same thing all the time, but the world changes,” Palma says. Jan Bot, until the day of the funeral, remained alive and continued creating new films.
But all good things must come to an end (or so we believe). Those attending the funeral for Jan Bot will be leaving with a card linking to an NFT of one of its films, keeping the robot’s work alive. “If you think of a blockchain as a new way of archiving things on the internet and digital platforms, there was a connection between these films, that bring old archives to the present, and archiving these new movies, made of old footage, in a new form of archive… forever in the blockchain.”
The North American market for 5G technologies is expected to exceed $180 billion by 2030, driven primarily by enterprise applications such as connected vehicles and real-time automation in manufacturing. This new means of wireless communication is already benefitting Media & Entertainment and immersive applications.
Here’s a look at how that’s so along with a peek into to what we can expect from 6G, which is being worked on in standardization bodies right now. Mark van Rijmenam, tech strategist and entrepreneur, has compiled ways in which 5G will change workflows — from which we’ve identified the relevant M&E applications.
Remote Working Gets Easier
5G wireless will eventually mean people no longer have to be tied down by a mandatory location — even in rural areas. With high-speed internet available anywhere, people will have the freedom to live anywhere they wish.
Edge Computing Goes Next-Level
5G will enable the creation of new edge computing systems that augment cloud infrastructure. This is a bonus for producers of eSports streaming, gaming or live sports broadcasters wanting real-time interaction with their users will be able to offer incredibly fast services in sub-10ms latency.
5G will not only usher in driverless vehicles but will enable a new personalized media hub on the go. The faster response times made possible by low latency data streams means service providers can deploy streaming media applications from home to car and during travel, extending touch points and engagement with the customer.
Immersive Experiences
We need to wait for leaner, more comfortable wearables before wall-to-wall everyday AR and VR immersivity becomes a reality, but steps are being made toward this. For example, T-Mobile and Qualcomm partnered to build AR applications for smart glasses (such as the Niantic Planet-Scale AR Alliance powered by 5G).
With platforms like the Snapdragon Spaces XR developer, “you can create mixed reality or other immersive experiences that transform smartphones into powerful pocket computers.”
Toward a Metaverse Based on 5G
Brands and media companies are keen to explore the potential of a 3D internet. 5G will provide the backbone to make this possible.
“[5G] will deliver an excellent customer experience by connecting customers to companies in both the digital and real world, including ultra-fast connectivity,” says van Rijmenam. “5G’s rollout will revolutionize the metaverse, making it even more essential for enterprises to develop a digital strategy.”
6G is Coming: What’s the Latest?
Even though the implementation of 6G technology may still be many years away, it is expected to become an integral part of communications within the next decade. Its capabilities will make it possible to generate massive amounts of data across decentralized networks — and deliver that information instantly.
The increased use of connected devices will require more efficient and advanced technologies to enable faster download speeds with minimal latency. This is something the next phase of 5G aims to tackle. 5G-Advanced, due to be deployed by 2025, uses machine learning and artificial intelligence to manage networks more intelligently.
Meanwhile, the 6th generation of wireless communication networks will boost use of radio spectrum and enhance scalability.
“As a result,” Van Rijmenam says, “connections will be more reliable, and drops will be reduced, which will be crucial to supporting advanced technologies such as drones and robots. Connected devices can use multiple connections simultaneously (e.g., Wi-Fi and cellular) if one is interrupted, so they stay connected no matter what.”
Latency alone will have a significant impact. It’s not that 5G is slow either. While the signal latency in 4G is around 50 milliseconds and 5G lowers this to just five milliseconds, the 6G latency is estimated at one millisecond or less.
“That would mean that huge data transmissions could be made almost instantly available anywhere on earth,” says van Rijmenam.
With 5G’s increased speeds, it is expected to make the Internet of Things more practical and user-friendly. Experts also predict that 6G will enhance the performance of connected devices even further — which may lead to widespread use of IoT devices.
Just as 4G hasn’t replaced 3G and 5G complements 4G, the 6G network will run in parallel with previous versions of wireless connectivity.
It’s thought unlikely that every device will use 6G, or more accurately need to use 6G. Current thinking is that 6G will be reserved it for science, medical, industry and military — in its early days at least. No telling where that will go decades hence or if a further ‘G’ can be minded from the spectrum.
Independent filmmakers are experimenting with AI tools today. While they are not yet ready for their big screen close-up, it won’t be long until these technologies become widely adopted in Hollywood.
The most high-profile text-to-image AI is DALL-E 2, released by OpenAI. The model does not offer motion picture sequences — but the odds are that it soon will. OpenAI is likely working on this as we speak.
Los Angeles-based director Paul Trillo has been creating stop-motion animations using DALL-E, and explains how it can be done in this twitter thread:
AI art is in its infancy and making fledgling attempts at “temporal coherence,” the ability to make something move as we expect it to in film and video (not forgetting that film is a set of still images replayed 24 times a second).
Deforum is a text-to-motion AI tool based on the AI model Stable Diffusion by Stability AI. AI artist Michael Carychao has used it to show how AI tools can re-create famous actors:
“In a couple of years, we’ll be able to write ‘Brad Pitt dancing like James Brown’ and be able to have a screen-ready coherent result,” Pinar Seyhan Demirdag, co-founder of AI-based content developer Seyhan Lee, predicts in her blog at Medium.
Another example using Deforum is provided by an artist known as Pharmapsychotic. The animated sample posted to Twitter is claimed to be raw output with no post-processing or interpolation:
“Give it a couple of years, and you’ll be able to film a scene of four random people walking down an aisle, and to turn them into Dorothy and the gang in the Wizard of Oz,” Seyhan Demirdag comments. “Arguably, you can do this right now, but it will be wonky, smudgy, and missing 8K details, so not ready for the mass audience.”
There are two ways of transferring a style right now. One way is with a pre-defined style, like a Van Gogh painting, for example. The other is using text-to-image based models such as Disco Diffusion and VQGAN+CLIP, where you guide the style with words, referred to as “prompts.”
“These prompts are your most significant creative assets, and many people who make art with text-to-image tools also call themselves ‘prompt artists.’ “ she says.
There are even sites suggesting the best prompts to work with specific AI — like the DALL-E 2 Prompt Book.
Considerable work is being done to incorporate generative art models into games engines.
Daniel Skaale, who works for Khora VR, has posted a sample on Twitter where he carried a 2D image he had created into the text-to-image AI Midjourney from the Unity games engine.
Generating real-time imagery in Unity or Unreal Engine remains an unexplored territory with huge potential, Seyhan Demirdag writes.
Face Replacement
Twitter user Todd Spence posted a mashup of Willem Dafoe as Julia Roberts in Pretty Woman. While it was just for fun, examples like this — using AI apps like Reface — give us a glimpse into how AI will help optimize production in future.
“Soon, studios will simply need to rent Brad Pitt’s face value rights for him to appear in the upcoming blockbuster film without having to leave the comfort of his couch,” Seyhan Demirdag comments.
Similar models have already been used. For example, Focus Pictures’ Roadrunner: A Film About Anthony Bourdainused deepfake technology to recreate Bourdain’s voice to have it say things he never actually said. This was controversial mainly because the AI wasn’t acknowledged up front by the filmmakers. The Andy Warhol Diaries also used AI to mimic Warhol’s narration, but since this was credited in the title sequence the Netflix documentary received applause for its innovation.
As with any other technology in its infancy, AI art still misses temporal coherence — our capacity to make jumping jacks or walk down the street.
“Right now, you can produce mind-bending, never-before-seen sequences with AI, but you cannot do everything (yet),” Seyhan Demirdag says.
“In a few years, we’ll be able to generate coherent and screen-ready full features that are entirely generated. If you are a producer, director, studio owner, or VFX artist who wants to stay ahead of the curve, now is the time to invest in this technology; otherwise, your competition will be generating headlines, not you.”
Fabian Stelzer’s “Salt” is the World’s First Fully AI-generated Multiplot “Film”
Fabian Stelzer is creating a sci-fi movie, Salt, using artificial intelligence coupled with crowdsourced narrative twists. On Twitter, Salt is billed as “the world’s first fully AI-generated multiplot ‘film’ — a Web6 internet adventure where your choices create a 1970s lo-fi sci-fi universe.”
While Stelzer may not be a filmmaker by trade, Rachel Metz at CNN Business says his use of AI tools to create a series of short films “points to what could be a new frontier for making movies.”
“Stelzer creates images with image-generation tools such as Stable Diffusion, Midjourney and DALL-E 2. He makes voices mostly using AI voice generation tools such as Synthesia or Murf. And he uses GPT-3, a text-generator, to help with the script writing,” Metz details.
After watching installments, Salt viewers can vote on story beats to determine what will happen next. Selzer has hopes of one day cutting the “play-to-create experiment” into a feature-length film.
“In my little home office studio I can make a ‘70s sci-fi movie if I want to,” he says. “And actually I can do more than a sci-fi movie. I can think about, ‘What’s the movie in this paradigm, where execution is as easy as an idea?’ “
Salt’s plot is still fairly vague — at least for now, as Metz notes — but Stelzer continues to release short clips and images on Twitter. “The resulting films are beautiful, mysterious, and ominous,” she writes. “So far, each film is less than two minutes long, in keeping with Twitter’s maximum video length of two minutes and 20 seconds. Occasionally, Stelzer will tweet a still image and a caption that contribute to the series’ strange, otherworldly mythology.”
The genesis for Salt emerged from Stelzer’s experiments in the text-to-image generator Midjourney. Working from his prompts, the system generated images he said “felt like a film world,” depicting “alien vegetation, a mysterious figure lurking in the shadows, and a weird-looking research station on an arid mining planet.”
Stelzer said, “I saw this in front of me and was like, ‘Okay, I don’t know what’s happening in this world, but I know there’s lots of stories, interesting stuff. I saw narrative shades and shadows of ideas and story seeds.”
But Selzer admits that he’s not entirely sure whether the idea he has for Salt will work, partially because of community involvement driving the project to deviate wildly from what he had initially planned. “The charm of the experiment to me, intellectually, is driven by the curiosity to see what I as the creator and the community can come up with together.”
Even with AI-powered text-to-image tools like DALL-E 2, Midjourney and Craiyon still in their relative infancy, artificial intelligence and machine learning is already transforming the definition of art — including cinema — in ways no one could have ever predicted. Gain insights into AI’s potential impact on Media & Entertainment in NAB Amplify’s ongoing series of articles examining the latest trends and developments in AI art
Social media is now an integral and increasingly valued part of strategy, regardless of the company, but Sprout Social finds it’s still being under resourced.
Its ninth annual trend forecast, “US Social Media Trends for 2022 & Beyond,” surveyed more than 1,000 US consumers and 500 US social marketers to understand how social media has transformed on both sides of the marketing equation.
Marketing teams were previously trying to convince senior leadership that social media was “business-critical,” but now the value of social across functions is clearer than ever, the report finds.
But the new responsibilities of social teams come with new challenges. Creating the outcomes businesses have come to expect from social calls for more talent. More than half of marketers (52%) say that finding experienced talent is their number one challenge this year.
Eighty-eight percent of marketers say they expect to hire another team member over the next two years, and more than half (62%) anticipate hiring between two to six new positions.
LinkedIn reported that social media managers are the third most in-demand marketing position by posting volume in 2022, while social media coordinator roles have the third most year-over-year growth of all marketing titles.
“Social is no longer limited to marketing, with functions across the business weighing in on strategy. But as a more diverse set of stakeholders gets involved, core social teams will need to adapt,” Sprout Social says in the report. “Figuring out who owns what, and which proficiencies are needed across teams, has to be addressed as social strategies become more sophisticated.”
For example, since every platform has a different algorithm, brands may need to post more often to make sure their customers see the ideal number of posts. The length of a video post matters as well. In 2020, 50% of consumers thought short-form was the most engaging type of content, and that’s only growing. In 2022, that number has risen to 66%.
Social platforms may differ, but the one you can’t ignore is TikTok. Per the report, 38% of consumers plan on using TikTok, more than double the 17% who were planning on it in 2020.
There are nuances in audience demographics who are able to be reached on different social platforms that only specialist social media marketers may be in touch with.
For example, not all audiences respond to influencer marketing in the same way. Sprout Social finds that younger generations value collaborations with celebrities, influencers, or creators more than older generations and that polished, highly produced videos are not necessarily the best way to win likes.
“Today’s consumers seek authenticity, and a super polished or overly stylized piece of content isn’t it. A produced video is essentially your opinion — and consumers aren’t interested in your opinion. They want to hear what other people think of your brand and/or product,” Sprout Social warns.
That message extends to the type of creator partnerships deemed most effective. Consumers care about creators’ qualifications, so you need to choose wisely.
“Consumers are more marketing savvy than ever — they can tell when there’s a disconnect between a brand’s values and how they promote a product or service,” says Jayde Powell, a content creator and marketer quoted in the report. “This is no different for content creators. While many creators believe you need to have hundreds of thousands of followers to get brand partnerships, that’s not necessarily the case. Having an engaged community, consistent voice and content style is what attracts opportunities.”
There are implications for creators as well — 81% of consumers will unfollow creators if they post sponsored content more than a few times a week.
And yet, while all of this points to the need to grow the social media team and budget within an organization, two-thirds (66%) of marketers report having to encourage leadership to create company positions on the big issues.
Sue Serna, founder and CEO of social media consulting agency Serna Social, comments: “Many leaders think social media managers are ‘the people who post stuff on Facebook.’ But the best leaders take the time to learn about their social media operation — the strategy, the day-to-day ins and outs and the pain points.”
She adds, “Leaders who have invested this time position companies to act quickly and with precision when a crisis or major issue is brewing. When leaders lack that understanding, things go sideways — often making headlines for out-of-touch responses and missing the mark.”
Social media acts like a drug on our social behavior, changing how we think about right and wrong and fomenting social division by design.
June 1, 2022
Bitrate Spend: A Compressed Guide to the Cost of Codecs
Transmitting data has a cost — in terms of bitrate and budget — that CTOs of streaming media services need to carefully weigh.
Bitmovin has crunched the numbers and concludes that a multi-codec approach is best.
That’s important given the codec race that has developed over the past few years; it’s a race that has no clear winner.
“At this point in time, if any OTT or streaming provider is seeking to reach the maximum number of devices at the highest possible quality, adopting a multi-codec approach is your best bet to success,” states The Definitive Guide to Video Codecs:
“Adopting just two (VP9 and HEVC) will enable an organization to reach roughly 98% of browsers and devices in the US alone.”
Codecs have the potential to significantly reduce the cost of video streaming workflows and operations. This cost is often measured based on file size, storage usage, and bandwidth consumption. Applying codecs is how content distributors can reduce their bitrate expenditure while maintaining a sliding scale of quality.
Any OTT or streaming service provider, implementing one or more types of codec into a workflow, will reduce storage requirements, increase device reach, and reduce the actual cost of transmitting media from A to point B. The question is by how much and at what financial cost?
Bitmovin marks the runners and the riders in its report:
H.264 (AVC)
Advanced Video Coding (AVC/H.264) still holds the lion share of adoption and reach in use by over 90% of video industry developers. Running H.264 for free is technically possible, however,
doing so is not optimized for operations or functionality, per Bitmovin. The current patents can be licensed from MPEG LA for $0.10 – $0.20/device. Subscription-based royalties cost between $25,000 – $100,00 depending on number of subscribers.
VP9
VP9 is the AOMedia consortium’s flagship codec and was primarily developed by Google. It offers at 40 to 45% bitrate advantage over H.264 (AVC). VP9 is technically royalty-free, but Sisvel International charges €0.24 for display devices and €0.08 for non-display devices.
H.265 (HEVC)
High-Efficiency Video Coding, developed by MPEG competes with VP9 and supports up to 8K quality resolutions. Although possible to implement for free with the x265 testing
Implementation, licenses are also issued by MPEG LA for a range of $0.20 – $1.20/device based on volume. Subscription-based royalties cost $0.025/subscriber. Despite these high licensing costs, HEVC is the second most popular codecs around.
AV1
AOMedia’s successor to VP9, the AV1 video codec delivers a 30% bitrate reduction over VP9 to support the rising demand for HDR and 4K video. Although technically released as royalty-free, there remains a controversy to this date, per Bitmovin, as a few organizations have claimed patent licenses over AV1, slowing the overall adoption. Codecs are charged by device at a rate of €0.32 for display devices and €0.11 for non-display devices.
H.266 (VVC)
The Versatile Video Coding codec was made publicly available last October with a 30-50% improved compression rate over H.265 and VP9. Bitmovin reports “little to no adoption” so far as many organizations are still testing its application.
“In addition, the current version of VVC requires too high compute power for most organizations to apply it.” Nonetheless, VVC is considered the codec of the future and can be expected to break into the market in the mid-to-late 2020s.
LCEVC
The newest on the block is the Low Complexity Enhancement Video Coding Codec, verified by MPEG only in March. It improves the encoding results of existing codecs including as much as by 46% when streaming UHD over AVC and 31% over HEVC. According to Bitmovin, LCEVC is even further behind VVC in terms of VVC and can be expected to be adopted around the same time.
V-Nova, one of the contributors to the LCEVC codec, recently announced the official licensing costs. An Integration License for OEMs to integrate V-Nova LCEVC encoding and decoding libraries while a Usage License is priced based on service size, measured via the total number of users. This is capped at $3.7mn per year.
According to Bitmovin, organizations plan to adopt AV1, more than any other codec on the market. However, VVC and LCEVC are judged the most efficient compression codecs that offer the largest size reduction with the least amount of quality loss.
In a related report, Bitmovin analyzes the costs of glitches or errors in streaming. These glitches — such as failure to launch a video on time — are nothing new, nor will they entirely disappear for the foreseeable future but do contribute to subscriber churn.
Leaning on a report by streaming service Vimeo, Bitmovin calculates that OTT providers are experiencing a 6.6% error rate across their services. Another way of putting this is that “unclear” or “ambiguous” errors are costing OTT providers five days of a customer’s loyalty to a service.
And if one puts that in monetary terms, which Bitmovin handily does, by reducing those errors for an SVOD service with 1 million subscribers and an assumed $15/month subscription fee, the five days increased in lifetime value for the technical churner segment would result in an estimated revenue increase of $160,000.
AI is considered an essential new tool in the progress towards future video compression technologies, but the next few years will be dominated by the transition to existing standards including AV1 and VVC.