Sergey Bludov

@sbludov

Video Distribution: Challenges and Opportunities in an Unknown Future

Adoption of new innovative technologies coupled with a fresh look at current regulation offers an enormous opportunity for future progress and prosperity for the video industry. The complexities that exist in today’s video marketplace are screaming out for new solutions to meet the evolving consumer demands and technological requirements. However, rapid changes present many challenges and opportunities as the ecosystem continues to transform in the digital age. And while the problems are extremely complicated, I believe the overarching challenges in the current video distribution infrastructure can be analyzed in four distinct categories.

Multiscreen and Multichannel Distribution

Remember when people watched videos only on TV? Well, even though that simple reality was relatively recent, we’re living in an entirely different climate now. These days, media companies must make their content available over multiple video streaming devices and multiple platforms to remain competitive in the ever-changing market. Whether it is about watching video on demand or live streaming, most consumers name convenience of on-the-go consumption and easy access to their content anywhere and anytime as critical factors while making decisions about what media services provider to use. The tendency seems unlikely to change over the next few years. The new Visual Networking Index (VNI) by Cisco forecasts that from 2017 to 2022 mobile video traffic will grow 6 times only in the United States, while video will be 80% of the US mobile data.

On the other hand, for video content owners and distributors the diversity of targeted devices and platforms means endless variety of encode formats, levels of video quality and different bit rates. This naturally results in complicated workflow and increased costs. Thus, developing and approving of standardized requirements would allow the creation of multiply versions of video content while saving highest possible quality should be definitely a high priority task for the industry leaders.

Meanwhile, some platforms are already taking steps towards solving the growing issue of multiscreen and multichannel distribution and simplifying relationship between video production and delivery. The Netflix Post Technology Alliance has been launched to help creators meet Netflix’s technical and delivery specifications and make a more efficient workflow from production to post-production and distribution. Trickbox offers a cost-effective method for the creation of broadcast quality video and audio with the ability to be streamed live to multiple platforms, including Facebook, Twitter, and YouTube. LivePin allows users to broadcast a single live video stream to all of a user’s social channels, while Telestream’s Wirecast provides the creation of live or on-demand broadcasts for the web.

Rights and License Management

Exclusive content is another driving force in the video distribution business. While competition on this market is high with only about 200 SVOD options in the USA, companies invest money and efforts to fund original content. For instance, Ted Sarandos, chief content officer at Netflix, reported that around 85% of the company’ new spending is going to original content. In the lucrative world of sports broadcasting, the changes are staggering as well. Twitter acquired specific NFL rights for the 2016 season, while Amazon Prime Video gained other rights for 2017 for its coverage of the ‘Thursday Night Football’ games. Although these acquisitions were for digital distribution with the idea of complimenting traditional broadcasts as opposed to being substitutions, the competition growth is certainly clear.

Obviously, in this situation content owners want to take full control over the rights usage. The market offers plenty of out of the box software for Digital Rights Management (DRM), however, most of them require customization to fit all users systems. Moreover, because of the variety of formats and platforms, content providers often have to support multiple DRMs. And even with all the latest technological advancements content protection and rights management still require a lot of manual work. This vital need is forcing major market players to look for technological partners and improve their current tools and develop new ones.

Lack of Accurate Data

How can viewership be tracked in the current ecosystem? Industry leaders are struggling to answer this question, as multiscreen and multichannel consumption creates massive gaps in data collection. Here’s the thing: although more video content is watched now than ever before, the ability to analyze viewership is diminished. As a growing number of consumers choose the “cord-cutting” of their traditional cable TV, the industry complexities increase. However, these same challenges offer incredible opportunities to leverage the plethora of available data to create better experiences for viewers through personalization and other means. I expect that we’ll see a range of tools emerging in the coming period to allow companies to effectively collect, analyze, and utilize the invaluable information derived from the viewing habits of consumers.

Anyhow, effective data collection is not the key to success. To make the best possible decision it is important to understand what is the right data you need and learn how to understand it. Sebastian Wernicke, Chief Data Scientist at One Logic, illustrated how Netflix and Amazon used data when building their strategies.

Data Security and User Privacy Protection

Video content piracy is at an all-time high. Professional digital pirates pose a major risk to media companies, with the threat of posting content before its release date through hacking into computer systems. Many industry experts consider content piracy to be the most significant problem they face. From the growing need to effectively protect confidential data to the desire to maintain the originality and authenticity of content, media companies are in a difficult spot. The Online TV Piracy Forecasts report by Digital TV Research predicts that the US will remain the largest country by piracy losses, with $11.6 billion forecast by 2022, up by 30% on 2016.

Video content distributors have to ensure content is secured wherever it is stored or whenever it is streamed. Encryption, GEO and IP restriction, password protection and watermarks are just some of the basic security technologies which are must have for any modern video platform and DRM systems to protect content from unauthorized access and usage.

At the same time, companies should be concerned not only about their own security. While many consumers believe that sharing personal data is a part of the modern digital environment, different surveys indicate that many people do not trust companies and their ability to protect users personal data.

Fortunately, industry leaders and their tech partners are working diligently to improve security measures across the board, with the goal of regaining full control of media content for its rights owners.

To say that the video industry is facing challenges would be a wild understatement. Truly, the complexities are massive and the ecosystem is changing so rapidly that it’s difficult for companies to keep up. At the same time, the top minds in our industry are working with the best technology firms to not only solve the problems that exist, but to develop a new infrastructure that contains the necessary flexibility to grow along with the landscape changes, thereby shifting the challenges to become opportunities for us all.

What are your thoughts about video distribution challenges and opportunities? Please share your opinions in the comments below.

By Sergey Bludov
Senior Vice President of Media and Entertainment Practice at
DataArt

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