How to ensure the ROI of a B2B Operator CDN with the implementation of the Multicast ABR technology
December 19, 2018
Multicast ABR technology revolutionizes multiscreen video delivery by allowing all the new screens (smartphone, tablets, connected TVs…) to receive live TV without unpredictable consumption peaks collapsing the streaming infrastructure. It transfers the benefits of old IPTV multicast to the new world of adaptive bitrate delivery – low latency and scalability – and is key for allowing operators to finalize their convergence schemes by switching off their IPTV system and bringing all the devices to cost-effective HTTP reception.
Figure 1. Multicast ABR principle
The savings are huge, and become bigger with the audience to address. For example, an operator with 3M subscribers delivering 5 SD and 5 HD popular channels in multicast, with a concurrent viewing rate of 5%, will save 90% of its cost by using multicast delivery rather than unicast delivery from the 1st year.
OPERATOR CDN BUSINESS MODEL
Another benefit of this approach for operators is that it allows them to monetize their implementation with content providers through the “operator CDN” business model.
In itself, the operator CDN model that allows content providers to contract directly with network service providers to deliver their content in an optimized manner has benefits for all parties, as shown in figures below.
Figure 2. Traditional over-the-top content delivery scheme
Figure 3. Benefits of operator CDN offer
operatorCDN™ AND nanoCDNTM COMBINED APPROACH
If the operator has implemented a multicast ABR solution like nanoCDNTM , the benefits are even greater for content providers who need to deliver live content.
In a traditional implementation, content providers making their content available over-the-top use a CDN as a service that is going to charge them based on the volume of content sent. This volume, hence the cost, will be directly proportional to the number of viewers.
If they rely on an operator CDN implementing nanoCDN, the limited impact on the network will allow the operator to provide the delivery service at a fraction of the CDN cost.
Different business models can be made available for reselling the service:
– Price per year related to the number of channels in multicast and their bitrate
– Price per TB of content streamed, as for a traditional CDN service
Let’s take the following scenario as an example:
– 100 000 users
– 1 channel in HD and SD formats
– 10% of contention ratio
– 2 Mbps average bitrate
– Total bitrate with all layers: 11,5 Mbps
– 25 minutes of video watched in average per day on these channels (50% SD, 50%HD)
– Traffic growth of 10% every year for 4 years
The following diagram compares the cost for the content provider if he was using a CDN as a Service (CDNaaS) with the cost of the nanoCDN for the operator for handling the same amount of traffic (cumulative costs every year):
If we now consider that 500 000 viewers are watching the channel, and since the cost of the nanoCDN does not depend on the number of users watching the channel, the difference is even more impressive:
These diagrams allow the operator to fix a price for his service based on the usage of the nanoCDN, at a fraction of the price that would be paid by the content provider to a CDN service, and for a much better quality of experience for the end-user.
In addition, the operator can propose and monetize value added services to the content provider, such as cloud-PVR, catch-up TV, start-over or Pause TV services.
The offer can include analytics based on information provided by the server about content consumption, that can be monetized too.