STREAMING MEDIA REPORT Analysts: Michael Inouye & Dimitris Mavrakis

TABLE OF CONTENTS ORGANIC VIDEO TRAFFIC GROWTH Organic Video Traffic Growth AND NEW USE CASES and New Use Cases...... 1 The spread of video streaming, often under the guise of Over-the-Top The Dawn of Ultra-High-Quality Video Content...... 3 AR and VR: Immersive Content and Communications...... 4 (OTT), is well established and its ripple effects are still being felt and adapted Cloud Gaming...... 7 to by the incumbents (e.g., Multichannel Video Programming Distributors Modeling A 4G Network to Illustrate (MVPDs) and content owners). As one begins peering further into the Capacity Constraints ...... 8 4G Network Model...... 9 future, however, user behavior and media streaming, in general, will begin How Will 5G Solve the Capacity Crunch?...... 10 to engender new opportunities and challenges as consumption habits Availability of New Spectrum and Higher Efficiency...... 11 and technological advancements push toward new boundaries. The Distributing, Processing, and Traffic Management with desire to go direct to consumers, coupled with an expanding list of streaming Edge Computing...... 11 Summary...... 13 services, is actively reshaping content channels and altering the media and entertainment landscape.

While media and entertainment often receives the lion’s share of attention, the road ahead for streaming media extends beyond OTT video; other markets like cloud gaming and Augmented Reality (AR)/Virtual Reality (VR) represent growth opportunities, but present new challenges beyond data traffic alone.

www.abiresearch.com The increasing reliance on OTT for video content has placed significant attention on aligning these viewing experiences with broadcasters and pay TV operators. For live content, this means reaching latencies as close to broadcast levels as possible to preserve the live feed and avoid spoilers, be it from individuals in close proximity watching on cable TV or social media posts.

Streaming protocols like HLS and MPEG-DASH, by nature, introduce latencies that exceed typical broadcast levels at under 10 seconds, but can range from 2 to 15 seconds with averages between 5 and 7 seconds; some of this latency with live content is intentional to give broadcasters a buffer zone for any necessary censorship. With Adaptive Bitrate (ABR) streaming at 30 to 45+ seconds, a common strategy is to implement shorter segments (e.g., moving from 10 seconds to 2 to 6 seconds), which can bring streams closer, if not within range of typical broadcasts. Tuned or shorter segment ABR is suitable for most TV-like video streaming, but certain applications and particularly those that require interactivity or synchronization with live content (e.g., trivia, content gamification, etc.) can require considerably lower levels of latency. To reach even lower latencies, LL-HLS, LL-CMAF, SRT, or other protocols like WebRTC and RTP/RTSP can help reach near real- time latencies. While streaming protocols are available to satisfy applications across the latency spectrum, there are currently tradeoffs to reaching the lowest latency levels; RTP/RTSP, for example, offers the lowest latencies, but lacks serious security/encryption and is often streamed unencrypted.

Activities within the ultra-low latency category like gambling, auctions, and video surveillance require minimal latency because they support in-process or follow-up actions and input from the viewers. Bidders in an auction, for example, might submit bids up until the close of the bidding process. Similarly, a security team monitoring a surveillance feed may need to respond to activities viewed within a security feed.

Figure 1: Streaming Latency and Protocols (Source: ABI Research)

NEAR REAL-TIME HIGH LATENCY TYPICAL LATENCY REDUCED LATENCY LOW LATENCY ULTRA-LOW LATENCY LATENCY REAL-TIME LATENCY

TYPICAL BROADCAST LIVE EVENTS VIDEO ULTRA LOW AND NEAR/REAL-TIME LATENCY VIDEO (MEDIA AND ENTERTAINMENT) LATENCY/DELAY (eg eSPORTS) ambli ealtime Commuicatios uctios Clou ami Sureillace Clou HLS HLS (TUNED OR SHORT SEGMENT LL-HLS reuires motio to photo latecy ms DASH DASH (TUNED OR SHORT SEGMENT LL-CMAF - DASH/HLS

RTMP SRT RTP/RTSP, WEBRTC

Secos Secos Secos Secos Secos Secos Seco Seco illisecos

At the end of the latency spectrum, activities that support some level of interactivity, in contrast to one- way streamed content, often require as close to real-time latencies as possible. Real-time communications and cloud gaming, for example, require less than 200 Milliseconds (ms) of latency before the experience becomes largely unsatisfactory; depending on the user and type of games, cloud gaming could demand even lower latencies (e.g., sub-50 ms), particularly if the goal is to reach parity with local desktop gaming

2 www.abiresearch.com STREAMING MEDIA REPORT experiences. Immersive cloud experiences like VR, due to the heightened sensitivity to motion to photon latency, these values often need to fall below 20 ms. Optimizations on the server/encode side, as well as the client/player, can help reach adequate experiences for a range of users, but the optimal conditions, particularly for immersive cloud content will need network enhancements like those offered by 5G. While immersive cloud AR/VR is further out on the horizon, the continued growth in streaming video, coupled with the progression of higher quality video, creates opportunities for companies to increase efficiencies in how content is distributed to save costs, reduce bandwidth, and, ultimately, provide a better overall customer experience.

THE DAWN OF ULTRA-HIGH-QUALITY VIDEO CONTENT Within 7 years of the first commercially available 4K TVs, the majority of TVs sold today support this higher resolution. The transition from High Definition (HD) to 4K is due more to the aggressive pricing and adjustments to product mixes by TV manufacturers than the spread of 4K video content, but the video market is starting to catch up, particularly as connected TV viewing sees strong growth due to viewing habits like binge watching. Peering further ahead in time, the next transition to 8K and, eventually, immersive content stand ready to usher in even higher levels of video quality and interactivity.

Each successive step will introduce higher bitrates (even with advancements in codecs), growing from 5 to 12 Megabytes per Second (Mbps) for most full HD streams today, to eclipsing 15 to 25 Mbps for 4K video. Immersive content—VR or 360° video—will accelerate this growth in data rates, particularly with new applications like volumetric capture and Six Degrees of Freedom (6DoF) video streaming. On the data side, video will continue to represent the largest share of all network traffic, growing with advancements in quality and video streamers. Chart 1 below represents ranges of streaming bitrates and bandwidth requirements for streaming video based on video quality and at the higher categories, such as immersive 360° content.

Chart 1: Bitrates and Bandwidth Requirements by Video Streaming Category (Source: ABI Research)

200 Mbps to 1.5 Gbps to 1.4 Gbps 3.5 Gbps

50 to 200 Mbps

20 to 50 15 to 50 Mbps 20 to 25 Mbps Mbps 9 Mbps . bps 5 Mbps

HD 720p HD 1020p 1440p 4K 2160p VR (4K) 8K VR (8K) VR (12K) VR (24K)

3 www.abiresearch.com STREAMING MEDIA REPORT The combination of increasing bitrates tied to higher quality, newer forms of video, and a viewing population that already exceeds 2.6 billion (and is expected to surpass 3.7 billion by 2025) is creating congestion in access networks, both mobile (Long-Term Evolution (LTE)) and fixed e.g., ( cable, Digital Subscriber Line (DSL)). It is worth noting that current Over-the-Air (OTA) broadcast standards do not support 8K content, which could put additional pressure on streaming services to serve this type of content, as 8K TVs enter consumers’ households and viewers seek native versus upscaled content. While this congestion is not creating access issues to the network, it can result in lower quality levels of streaming media. This creates opportunities for solutions or strategies that can reduce traffic redundancies within the network and whenever possible, leverage efficiencies like opportunistic multicasting. Content Delivery Networks (CDNs), for example, are pushing video workflow functions like packaging and encoding for popular content closer to the edge to minimize the traffic coming from origin servers and reducing congestion within the network. Bringing content closer to the edge also minimizes latency, which is essential for cloud mixed reality experiences. While edge computing is applicable across networks, as evidenced by the shift from Mobile Edge Computing to Multi-Access Edge Computing (MEC), 5G will further the development of the edge to better support these new applications.

For those cases where multiple users request the same video (e.g., within a designated time window) a multicast feed could replace the two or more unicast streams, at least through parts of the network. For example, one stream could traverse the network to the edge where it could then be delivered as a unicast stream to the users. In the event that there is a known group of users, this multicast stream could be sent to the organizer, who could serve as a hub and distribute the content to the other users.

AR AND VR: IMMERSIVE CONTENT AND COMMUNICATIONS The consumer markets for immersive content are lagging behind early expectations, but activity in the commercial markets is receiving significant interest and increasing traction. While similar, AR and VRare currently serving different end goals. AR is primarily used as a tool to enable hands-free applications and to provide information to guide or assist users in tasks and communications. The value for VR rests in its deeper level of immersion, which adds value to a range of applications from making training/learning sessions more memorable and impactful to aiding in Three-Dimensional (3D) visualization for design/modeling.

Today, most content is processed and stored locally (in large part due to latency requirements and, in some cases, bandwidth concerns), but VR platforms will increasingly move from locally stored applications to a web-based approach, pushing more content and services to the cloud and edge, which will accelerate with the spread of 5G and the potential for cloud VR. Cloud VR will enable the development of new lower cost Head-Mounted Display (HMD) form factors that could accelerate the progression to wearables that better emulate the look and feel of traditional eyewear. These devices would also carry lower prices and consume less power. In the interim, but looking ahead to a more cloud-centric future, most users will operate within a hybrid local and cloud environment. This includes content and applications that are processed locally, in the cloud, and hybrid computing situations; early examples of 6DoF streaming video leveraged a hybrid local/ cloud computing arrangement to maintain the need for ultra-low latency (e.g., local processing plus cloud to generate light field) and keep data rates manageable for most users e.g.,( 25 Mbps or less).

4 www.abiresearch.com STREAMING MEDIA REPORT Today, streaming media consumption on AR/VR HMDs more closely resembles smartphone use in terms of both content and shorter viewing sessions, although mobile viewing overall far exceeds most HMD users. Immersive or 360° video content remains limited and most users and services focus on traditional Two-Dimensional (2D) video, creating virtual viewing areas to watch content alone or in social settings. While the overall video industry is not yet investing heavily in immersive video, this segment of the market should receive a stimulus from successful launches in standalone VR, even if gaming is still the initial driving force; expansion of the installed base and increasing active use are two critical factors that will help spur content development.

VOLUMETRIC STREAMING Peering further out on the horizon, volumetric streaming will create more immersive and natural viewing experiences for VR users. Volumetric video, which captures the 3D space, enables higher levels of interactivity and immersion; for example, HMDs that support 6DoF tracking could fully translate a user’s head movements to the viewing experience, presenting a more natural user experience. In a more extensive example, a volumetric video could allow broader user translation within a room for room- scale experiences.

For most able-bodied viewers, their head and vision move with both rotation and translation, which can make 3DoF videos (only rotation) feel less natural, although still immersive, and over prolonged periods of time become uncomfortable for some viewers. In fact, many early examples of 6DoF video focused on just enabling translational movement of the head/vision over room-scale experiences. This type of viewing would greatly benefit both sports and e-sports or any spectator event where the viewer would typically remain seated or stationary. On the production side, both rendered and light field video capture have been used to create 6DoF video, with the former likely pushing this aspect of the market forward, as light field volumetric capture has struggled to gain traction.

NATURAL IMMERSIVE COMMUNICATIONS Social VR and more immersive communications were touted opportunities for the market, but, to date, these elements remain underdeveloped with limited participation. Several factors have hindered the immersive market’s potential to become more social. First and foremost is the limited installed base, but the implementation of virtual avatars also did not push the narrative much further than what is already available on other platforms. In time, the use of eye-tracking and translation of facial expressions to the virtual avatars will enable more immersive and natural social engagements. In both the AR and VR spaces, immersive communications could enhance the exchange of information and ideas; for example, a user communicating with a friend remotely (represented by a virtual avatar) could share a video clip within the virtual (or real world) space just as seamlessly as if they were in the same room. While the immersive qualities of AR and VR create opportunities for new ways to communicate, these devices can also increase the number of touchpoints for more traditional forms of interaction.

At least for a time, there will remain some users who will prefer not to (or are not able to) wear an HMD for these types of immersive experiences, in the interim (before immersive communications become more prevalent), however, the natural communication market is seeing a kind of renaissance as companies look to

5 www.abiresearch.com STREAMING MEDIA REPORT enrich video communications by adding features and integrating other applications like social networking and smart home (e.g., smart displays). There is also strong support for live streaming of gameplay, which typically includes some levels of interactivity with audiences (e.g., Internet Relay Chat).

Communications, when viewed across a spectrum of immersion, highlight different requirements and timing before these applications are more commonplace. At the lower immersive levels, data rates are less demanding and synchronization is prioritized over latency, although all immersive communications fall within the ultra-low latency (or lower) category. For live streaming like gameplay, the player’s feed and messaging communications need to be relatively synchronized, but latency is not as critical as other real-time applications that rely on location or have more stringent motion to photon latency requirements. Moving forward, AR and mixed reality shopping and indoor/outdoor location-based marketing will require precision in both geographic location and temporal positioning, such as offering sales or marketing goods/services as the individual passes by stores or shopping displays. Remote expertise, collaboration, and virtual meetings all require or would greatly benefit from near/real-time communication; remote virtual meetings could also require high data rates and low latencies (motion to photon latency below 20 ms) in cloud VR implementations (e.g., meeting during an autonomous vehicle ride) as shown in Figure 2.

Figure 2: Types of Communication by Level of Immersion (Source: ABI Research)

These opportunities are equally present in the enterprise markets as well, building upon basic video conferencing/calls by adding more interactivity among users and deeper integrations into productivity software and platforms. In these cases, communication transcends the more fundamental travel cost savings and conveniences, and engenders real-world work efficiencies and heightened collaborative work environments.

6 www.abiresearch.com STREAMING MEDIA REPORT CLOUD GAMING The gaming market continues to grow, with strong growth of users coming from mobile, particularly in regions where console and Personal Computer (PC) gaming have lower penetration rates. The growing number of mobile gamers, coupled with the comparably shorter life cycles for smartphones, has helped close the gap between platforms, with many popular franchises going cross-platform (mobile, PC, console). The player base is quickly approaching the same size as online video viewership, and by some estimates, will exceed this value, particularly if higher levels of engagement are added as limiting criteria.

The arrival of new services like Google’s Stadia is generating considerable buzz and attention for cloud gaming. Cloud gaming refers to platforms and services that shift the compute and processing from the local device to the cloud. This contrasts with locally processed games, which are downloaded (or installed via a disc) to the end user device (e.g., smartphone, game console, PC) and then uses the onboard Central Processing Unit (CPU)/Graphics Processing Unit (GPU) to run the game. Online and multiplayer gaming uses remote servers and the cloud to handle aspects of the gaming experience, but the local device is still responsible for the bulk of game rendering and processing. Cloud gaming moves the CPU/ GPU compute element to the cloud, receiving input commands from peripherals/controllers and renders the game and streams a video feed to the user. While cloud gaming is not new, by most accounts tracing its origins back to 2000 and the company G-cluster, the market conditions have only more recently yielded an environment where cloud gaming could be viewed as a potential mainstream segment of the gaming market. These trends include the shift from physical media to downloadable, the increase in mobile gaming, and improved broadband/network conditions. These trends addressed issues encountered by previous attempts at cloud gaming where users heavily favored physical media (e.g., to lend and sell used games), played mostly offline/locally, and prevailing broadband data rates at the time only allowed for gameplay at quality levels below many existing platforms.

Within the span of the current console generation, the gaming industry shifted to digital distribution and a growing catalog of games that has assumed an “as-a-Service (or platform)” content and revenue model (Games-as-a-Service (GaaS)) where content is added both free and with a cost on an ongoing basis. In addition to warming up to digital distribution, these changes heralded a changing perception about content “ownership.” Much like the transition from CDs/physical media to streaming music (subscription services, in particular), the user base had to relinquish the belief they “owned” the content. GaaS and free-to-play game types, in particular, altered the landscape, better preparing it for a new push from cloud gaming, which is also benefitting from further proliferation of mobile and connected TV devices. The other part of the cloud gaming equation, and equally important, is the streaming element. Today, average fixed broadband data rates in many countries and regions are capable of supporting both video and cloud game streaming at HD or higher.

Beyond sheer data rates, latency and jitter are critical issues for cloud gaming and optimizations made throughout the workflow (server, network, client side/player) are now capable of yielding experiences that push toward, if not match, the local PC gaming experience, While these latencies can and do vary based on hardware and software configurations, most local PC gaming will have an input lag or click to display latency below 50 ms with higher performance setups around 15 ms. These values often fall below the

7 www.abiresearch.com STREAMING MEDIA REPORT 50 ms threshold where most users will no longer notice any input latency. Game consoles can have higher input latencies due to wider variability in the display (TV), and for the current generation, gameplay at lower framerates (e.g., 30 Frames per Second (fps)) with some values at 100 ms or higher (especially if users do not use the “game mode” on the TV). In cloud gaming, latency arises from three primary areas—servers, network, and client—and while the distribution of these latencies varies for a range of reasons (e.g., distance from data center, displays, video players, encoding efficiency, etc.), the network typically accounts for roughly a quarter of the overall latency. To reach lower latencies, many cloud gaming companies optimize the content workflow and distribution end-to-end.

Google, for example, is using BBR (to reduce congestion and packet loss), Quick UDP Internet Connection (QUIC), and WebRTC for its Stadia service. As stated earlier, latency requirements vary by user and game types, but for general gaming, most users will find latencies (click to display) below 150 ms acceptable with sub-100 ms as a more common goal. Certain game types and users, however, will require lower latencies that will fall within the sub-50 ms window, to better match what a user might experience with a local PC setup. While current cloud gaming services have optimized their workflows to reach these optimal latency levels, 5G networks could further reduce latencies within the network and are viewed by many as a catalyst for cloud gaming (higher data speeds, lower latency), particularly when packaged or bundled with a 5G data plan. Further out in the timeline, cloud VR will bring heightened attention to latency, as motion to photon latency becomes a significant factor to the user experience (latency must be sub-20 ms), in these cases, 5G’s Ultra-Reliable Low-Latency Communication (URLLC) could serve as a differentiating factor for the optimal cloud VR user experience.

While the market conditions are favorable for cloud gaming, the transition away from hardware to the cloud will occur over time. A new generation of consoles will arrive in 2020, and with it at least another 5-year cycle of hardware-based console gaming. ABI Research expects game console households to remain at more than 200 million worldwide throughout the forecast window to 2025. Similarly, the most devoted PC gamers are expected to continue pushing the hardware envelope to attain performance levels that will exceed what is available through a cloud gaming service.

MODELING A 4G NETWORK TO ILLUSTRATE CAPACITY CONSTRAINTS As evidenced by these upcoming streaming applications, media (and video, in particular) will continue to represent a growing share of all Internet traffic, growing from over 50% of total traffic today to over 70% within the next few years. According to ABI Research forecasts and analysis, more than 50% of this video traffic is, in fact, encrypted, meaning that mobile service providers have very limited means to manage this increasing traffic without the direct involvement of the content owner (e.g., Google placing a cache on the mobile network) or a dedicated CDN that allows secure content delegation. Mobile video represents an even larger share of mobile data traffic, approaching 80% within the same time period. The continued growth of mobile data users, coupled with the arrival and growth of the previously discussed trends and applications, will create network challenges for today’s 4G network. Table 1 below illustrates a brief summary of a typical mobile 4G network that will likely face capacity constraints due to mobile video in the next few years.

8 www.abiresearch.com STREAMING MEDIA REPORT 4G NETWORK MODEL In order to understand the current state of cellular mobile broadband networks, it is necessary to perform a simple cellular network dimensioning model. The assumptions for this network are outlined in Table 1.

Table 1: 4G Network Model (Source: ABI Research)

Capacity Supply Traffic Demand #1 Traffic Demand #2

3-sector 4G site 300 users/sector 300 users/sector

60 MHz bandwidth, 3 CA bands Contention ratio = 20 Contention ratio = 6

Average 4G speed per user = 20 64 QAM and 2x2 MIMO capable devices Average 4G speed per user = 20 Mbps1 Mbps1

Capacity demand: 450 Mbps in DL = Sector Sector throughput: 450 Mbps DL, 50 Mbps UL Capacity demand: 300 Mbps in DL Limit

It should be noted that both modulation and Multiple Input, Multiple Output (MIMO) assumptions are optimistic in that many users (especially indoor users) may not connect through such favorable propagation channel conditions and will very likely be limited to a much lower top speed.

It can be seen that a very favorable demand calculation illustrated above results in a 300 Mbps capacity requirement, which is arguably very similar to the LTE network example outlined above. In fact, network dimensioning exercises typically rely on over-provisioning by a factor of at least 2 to cater for the near-term future. Table 1 illustrates that moderate usage assumptions may lead to congestion at the base station, especially if video services are considered.

Current and near-term streaming services can use bit rates that are well above these figures. For example, YouTube and Netflix recommend the following sustained speeds:

2160p: 20 Mbps (YouTube) and 25 Mbps (Netflix) HD (1080p): 5 Mbps for both (Netflix only lists 5 Mbps for HD) HD (720p): 2.5 Mbps (YouTube)

Actual bitrates will vary by level of compression, codec (e.g., VP9 versus H.264) and framerate, but most services typically establish and use a set of video profiles. On the mobile network side, resolutions not usually seen in TVs, like 1440p, will be more common, potentially pushing bitrates above HD levels, falling within the 8 to 10 Mbps range.

There are also several trends that indicate current cellular networks will be challenged to deliver these speeds: smartphone devices are becoming more capable with bigger screens (and potentially higher resolutions); competitive pressure has led most mobile service providers to offer unlimited, or at least, very large data packages; video consumption is growing organically at an astonishing rate; and, last but not least, studios and content owners are coming up with new user experiences that can add more stresses to a network (e.g., Netflix Bandersnatch, which included interactive content).

1 Per OpenSignal’s latest Mobile Network Experience metrics in the US

9 www.abiresearch.com STREAMING MEDIA REPORT For example, if we assume that 50 users (rather than the 20 dimensioned and out of the 300 total) per sector watch a 1440p video, then the sector utilization rises to 450 Mbps, the same as the theoretical limit. If we factor in new services, e.g., HD 360° video that could require 50 to 70 Mbps per video stream, then we can safely assume that 4G networks will not be able to cope with demand, unless radical improvements are performed in the 4G radio and core network, which is unlikely, given the focus on 5G.

Advancing further into newer forms of media streaming, particularly immersive content, and the bitrates start to rapidly exceed what is possible over a 4G network.

While these higher order streaming examples are years away from forming a meaningful segment of the user base, some of these applications could cause issues for a more concentrated pod of users. For example, a group of 30 tourists viewing an immersive travel video through multiple unicast streams (e.g., at 50 Mbps) could quickly exceed 1 Gigabyte per Second (Gbps) data demands, greatly exceeding what is possible in most cell sites. This is universally applicable; students viewing a lesson plan, or travelers viewing a point of interest video, are equally difficult network situations. Cloud gaming also tends to require higher bandwidth due to higher framerates, again compounding issues. These challenging scenarios could be mitigated by enabling multicast ABR video for popular content or applications, or even more innovative schemes that are tailored for specific use cases.

HOW WILL 5G SOLVE THE CAPACITY CRUNCH? On the surface, enhanced data rates and lower latencies may appear less impactful for mobile viewing. Most mobile displays have resolutions below 4K and the large majority of video viewing does not require the low latencies possible with 5G networks. 5G, however, will provide more consistent viewing experiences, and for those users who wish to store the content locally for offline viewing, faster data rates will greatly reduce these download times.

AR/VR and gaming will see more immediate benefits from 5G, particularly for cloud services. As highlighted earlier, lower network latencies and reduced jitter afforded by 5G enhance the cloud gaming experience; this coupling is already gaining interest from carriers who are looking to offer new services and subscription bundles. Immersive cloud services will require even lower latencies (sub-20 ms), and in the case of cloud VR, very high data rates, particularly as HMD resolutions climb, stretching well beyond 100 Mbps and clearing 1+ Gbps as HMDs begin to reach the limits of human vision. In addition to applications and services for VR users (e.g., VR gaming, education, tourism, social VR/immersive communications, etc.), a wider audience could use cloud VR when autonomous transportation becomes more readily available. Location-based information will also enhance both content and marketing opportunities to these wearables; for example, location-specific information, directions, and promotions.

Many of these AR applications are already available in some shape or form on smartphones, which are and will remain the main capture device for the foreseeable future. The cameras available on smartphones have become both higher quality and more capable, allowing for myriad recording opportunities. In time, smart glasses will engender a more seamless user experience, working as an always-on and active device.

10 www.abiresearch.com STREAMING MEDIA REPORT AVAILABILITY OF NEW SPECTRUM AND HIGHER EFFICIENCY Apart from introducing a higher frequency spectrum to alleviate capacity bottlenecks, the 5G system design includes some new and interesting improvements. If we assume that a mobile service provider owns 100 Mbps in the 3.5 Gigahertz (GHz) band, and given the same network assumptions as the LTE network, then the theoretical top capacity becomes 876 Mbps for the 5G New Radio (NR) network.

However, a major improvement in 5G NR is the widely used Massive MIMO technology, which can spatially separate groups of users. A 32x32 MIMO configuration can separate 10 clusters of users, reusing the full sector capacity in each of these clusters. Effectively, the base station capacity could reach 8.76 Gbps, which could support 175 users watching HD 360° video at 50 Mbps. In short, 5G NR effectively doubles the spectral efficiency of a system at the very least. With Massive MIMO, the improvement can be as high as 15X more capacity compared to LTE-Advanced. In addition, 5G NR systems allow higher forms of carrier aggregation, meaning that data speeds can increase significantly higher with Massive MIMO.

As 5G networks roll out, the transition from 4G to 5G will take time, meaning many users will jump between 5G and 4G connections, particularly as they traverse throughout their local areas. While 5G is a primary component in addressing the growing data needs of the streaming media market, it is not the only technology enabler that will have a notable impact. For example, as discussed in Section 2.1, popular streaming video content can be served by multicast or even cached locally, thus saving on traffic and network costs significantly. ABI Research believes that these types of video content delivery optimization will become prevalent when edge computing is widely deployed.

DISTRIBUTING, PROCESSING, AND TRAFFIC MANAGEMENT WITH EDGE COMPUTING Although 5G will introduce a better radio network layer, it is the fundamental differences in network design and deployment that will help manage video traffic and create new use cases. These enhancements are largely driven by the distribution of processing capabilities throughout the network in the form of edge computing. This will allow mobile service providers to process locally, break out traffic, and cache traffic more efficiently.

EDGE CACHING Leveraging the edge of the network for compute engenders a range of potential efficiencies. CDNs and cloud providers are already pushing content and elements of the video workflow to the edge to minimize data transit across networks. InterDigital has also introduced a flexible routing solution, Flexible IP-based Services (FLIPS), which could enable multicast efficiencies for situations where there are number of concurrent unicast streams. Referring back to a previous example, a group of students, tourists, or employees in training streaming VR content (be it 6DoF video or a cloud VR application) would overload a cell site, but distributing the content through a multicast stream would greatly reduce the data demands on the network. In a 4G network, unicast streaming of this content would not be possible, but even in a 5G network, these represent opportunistic strategies to minimize data traffic. Edge computing could further reduce latencies, while also enabling the reduction of unnecessary backhaul and core network inefficiencies by “frontloading” content to sites where it is consumed, rather than transmitting end-to-end from a more distant cloud, but these applications will likely see the most benefit for services further out on the horizon like cloud VR.

11 www.abiresearch.com STREAMING MEDIA REPORT New codecs, such as AV1 (along with the increased use of HEVC), and, further out, H.266/Versatile Video Coding (VCC) will help reduce the bandwidth requirements, but not at the necessary levels to eliminate the potential bottlenecks and congestion from high peak demands, particularly at the more advanced tiers of immersive content. These codecs, however, will have a strong impact on reducing the overall network load across larger volumes of streamers and cloud services, which constitutes the bulk of most streaming.

CONTROL AND USER PLANE SEPARATION Control and User Plane Separation (CUPS) is a key pillar for 5G core networks, attributable to its ability to distribute resources in the network. The utility of CUPS lies in the functionality separation that it imposes between the control and user planes. The latter can be scaled independently of the former. The control plane can be hosted in a centralized function, whereas the latter can be placed close to edge locations. This arrangement avoids the need to backhaul traffic to a central location, thereby improving latency and bandwidth requirements for applications like video and AR/VR. CUPS enables the following benefits:

Allows the Deployment of a Distributed Architecture: CUPS aids deployment of 5G core elements across both public and private clouds, and at peak times, traffic can be scaled to public cloud. Promotes Cloud Platform Compatibility: Virtualized Network Functions (VNFs) for management, data, service, and latency-insensitive content can now be hosted in multiple cloud platforms, such as AWS, Azure, third-party OpenStack, vendors’ own cloud, or a combination thereof. Centralized and Simplified Operations and Maintenance (O&M): CUPS is conducive to a centralized O&M configuration where one control plane resource pool configures and controls several user plane pools, in turn simplifying network configuration.

There are many benefits that CUPS can bring to the management of video traffic, the most important of which is local breakout. Public video streams can potentially break out to the Internet from the base station or aggregation point, and not saturate the mobile core network with low priority, encrypted video traffic. ABI Research expects CUPS to provide significant efficiency gains for the management of future video use cases.

LOCAL PROCESSING: ADVANCED USE CASES The first wave of edge computing deployments will likely be targeted toward easing capacity constraints, making traffic management more efficient, and reducing network-related costs. When this happens, mobile service providers will possess a distributed processing capability that will create the foundation for new types of services. Especially in the media sector, there is significant opportunity in personalizing content suggestions, delivering interactive content, and even changing the content itself locally in near real-time. For example, an edge computing server running an AI application can gather data from end-user devices, e.g. popular content and user behavior patterns.

These data may then be used in two ways:

In an isolated environment, running on this very same edge computing server to proactively identify future popular content and then request it from the content server. Machine learning can predict what content will be viewed and pre-cache it locally on the edge computing server, greatly reducing latency. At the same time, this prediction engine can reduce energy costs by choosing not to cache content locally when it predicts it will not be popular.

12 www.abiresearch.com STREAMING MEDIA REPORT In a federated system, where data from devices across the network are collected by edge computing servers, which are then gathered in a central location to train a content prediction model. The model may then direct relevant content to each edge computing server, depending on content preferences.

The availability of edge computing resources will lay the foundation for many new services, some of which we cannot predict today.

SUMMARY 5G is a key technology enabler for both the consumer and enterprise markets, for streaming media and for a range of other applications that extend well beyond the scope of this paper. The large volume of data stemming from these future media applications, coupled with growing user bases, will give rise to network issues, particularly as users move between 5G and 4G networks. Ultra-low latencies will also become an important factor in defining quality user experiences for real-time communication and new services like cloud gaming and immersive experiences. Services and Mobile Network Operators (MNOs) will need to take these considerations into account when bundling future cloud services with their mobile broadband subscriptions, particularly when pairing it with 5G plans. Expectations must be set in advance and service qualities set at a level that will either seamlessly scale as the user transitions between networks (4G/5G and Local Area Network (LAN)) or provide a good experience across these touchpoints.

The opportunities presented in this paper will develop over time, but streaming media is on a trajectory that will increasingly push the data boundaries, eventually surpassing the ability (or economic viability) to continue overprovisioning within the data networks. This creates both a need and an opportunity to address these hurdles by gaining efficiencies through edge computing, multicasting, and enlisting more efficient codecs. There is certainly time before the most data-intensive use cases come to market, but some markets, such as cloud gaming, could see an accelerated push toward higher quality streaming, as both services and operators seek to differentiate and compete against incumbent platforms and services. Ultimately, the industry needs to view these challenges through a new lens that looks to other areas outside of overprovisioning alone in order to yield the most efficient operations and maximization of value.

13 www.abiresearch.com STREAMING MEDIA REPORT Published December 17, 2019

www.abiresearch.com

About ABI Research

ABI Research provides strategic guidance for visionaries needing market foresight on the most compelling transformative technologies, which reshape workforces, identify holes in a market, create new business models and drive new revenue streams. ABI’s own research visionaries take stances early on those technologies, publishing groundbreaking studies often years ahead of other technology advisory firms. ABI analysts deliver their conclusions and recommendations in easily and quickly absorbed formats to ensure proper context. Our analysts strategically guide visionaries to take action now and inspire their business to realize a bigger picture. For more information about subscribing to ABI’s Research Services as well as Industrial and Custom Solutions, visionaries can contact us at +1.516.624.2500 in the Americas, +44.203.326.0140 in Europe, +65.6592.0290 in Asia-Pacific or visit www.abiresearch.com.

© 2019 ABI Research. Used by permission. Disclaimer: Permission granted to reference, reprint or reissue ABI products is expressly not an endorsement of any kind for any company, product, or strategy. ABI Research is an independent producer of market analysis and insight and this ABI Research product is the result of objective research by ABI Research staff at the time of data collection. ABI Research was not compensated in any way to produce this information and the opinions of ABI

Research or its analysts on any subject are continually revised based on the most current data available. The information contained herein has been obtained from sources believed to be reliable. ABI Research disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.