Mobile Video Optimization: Market Evolution and Operator Implications The popularity of mobile video is evident all around us – in people watching YouTube, Netflix and other content on their smartphones and tablets and communicating via real-time, two-way video. This phenomenon is booming as a result of broad support across the mobile ecosystem, including among devices, networks and services. It shows no signs of slowing, and it has crucial implications for how mobile operators direct their infrastructure investments and strategies. In this paper, we examine some of the technologies and approaches important to operators as they address the challenges attending mobile video growth – as well as some key considerations to help navigate expected future trends. The State of Video in the Mobile Network The growth of mobile video has multiple drivers in a variety of areas. An understanding of these drivers can help illuminate both its history and current trajectory. Ecosystem Support Drivers The rise of mobile video adoption has been fueled by many sources – perhaps none more dramatically than the spread of smartphones, whose screens unleashed a new wave of video consumption and whose cameras supplied torrential volumes of video content. Mobile video use continues to expand with the spread of tablets, whose larger screen size improves the video-watching experience and encourages new forms of consumption, including long-form content such as movies. Research has indicated that tablet users are nearly three times more likely to watch video on their device than smartphone users, with 10% of tablet users viewing video content almost daily on their device.1 And although the runaway growth of tablet sales has tapered off somewhat in recent years, growth is now shifting to phablets, whose use is even more concentrated on entertainment.2 Video content owners are eager to fan these flames, aware that adapting their services for mobile devices not only expands their audience, scaling up monetization, but makes their services more tightly woven into users’ lives and therefore indispensable. Some, including Netflix, have created WiFi-only options for their mobile video services to circumvent the conflict between users’ video appetites and the data rates charged by most mobile operators. The spread of LTE networks – and the greater bandwidth they offer – are another contributing factor in the spread of mobile video, encouraging greater and freer mobile video consumption. That continues as operators deploy LTE-Advanced, with carrier aggregation and other technologies that boost capacity to enable higher levels of video traffic consumption. But the persistent vitality of WiFi offloading reminds us that mobile operators have not adequately evolved their networks to keep pace with mobile video demand. 1 Mobile Video Traffic Growth With support from across the mobile ecosystem, mobile video’s growth is well documented. In 2014, video accounted for about 45% of all mobile traffic, according to Ericsson. By 2020, the vendor forecasts that figure to reach 60%. That assumes a traffic growth rate of about 55% per year.3 Various operators have echoed these sentiments. AT&T CEO Randall Stephenson said recently that video makes up half of the company’s mobile traffic, adding that the company’s merger with satellite video provider DirecTV, “Is more about mobile video than home video.”4 What’s more, this video traffic isn’t being distributed uniformly across the network. A large portion of video traffic is consumed by a disproportionately small group of “heavy users.” A heavy user is likely to watch an hour of video per day – 20 times more than an average user, according to Ericsson. In fact, this discrepancy is even more dramatic than it is for overall mobile data, because heavy data users are particular consumers of video. One implication: operators shouldn’t think of mobile video as just another mode of mobile data. Instead, they should target it specifically to address one of the biggest burdens on their network. Operator Dilemma Faced with the prospect of a deluge of video traffic hitting their networks, mobile operators are evaluating ways to accommodate these trends and optimize their networks to deliver video in ways that meets user expectations for quality of experience (QoE). For many operators, part of the response has been increased radio access network (RAN) investment: densifying networks with additional base stations, building out small cell strategies, using carrier aggregation and other tools to increase spectral efficiency. Outside the RAN, these moves are often supplemented by using traditional content delivery networks (CDN) for mobile and fixed use cases. Operators are also looking for ways to make use of additional spectrum to provide more network capacity. Options there include typically expensive government spectrum auctions and the ongoing reliance on WiFi offload, which can act as a sort of band-aid on mobile video growth, conserving network capacity but circumventing the mobile data services revenue model in the process. Some operators are also exploring video-centric solutions such as eMBMS, also called LTE Broadcast. This technology allots network bandwidth to transmit data (including video or audio streams) to 2 multiple users simultaneously. Due to the efficiency of multicasting, operators have tested its value particularly in sports stadium applications, where a high concentration of users are likely to be interested in the same content at the same time. However, widespread deployment of LTE Broadcast services haven’t materialized (perhaps due partly to a lack of available device support), and some operators and mobile access equipment vendors have questioned the business case surrounding this technology. Overall, while increasing the spectral efficiency of mobile networks can help accommodate video traffic, the airwaves aren’t the only bottleneck facing video, whose performance can be impacted by everything from router port capacities to server-induced latencies. A comprehensive approach is needed. The Long Journey of Mobile Video Optimization Operators concerns around mobile video traffic growth didn’t appear overnight. Video traffic has been growing in fixed networks for years, forcing operators to be aware of it and consider the best way to address it. Its migration to mobile networks posed even more daunting challenges, because – particularly where LTE is not fully rolled out – mobile access networks have historically enjoyed less bandwidth than fixed networks. Even where LTE is available, spectrum is a finite resource, meaning that the impact of any dominant traffic source needs to be carefully considered and planned for. R&D + M&A Investment Toward the end of the last decade, as LTE network rollouts ushered in a greater level mobile video consumption (but plenty of 3G infrastructure remained), interest in mobile video optimization swelled, and so did investment in this area. As operators began to face the reality of a mobile video onslaught, vendors rushed in to solve their pain points. Startup vendors emerged with new solutions. Larger, more established players in related areas such as CDN and operations support systems (OSS) made acquisitions. CDN giant Akamai acquired Verivue Networks, Citrix bought Bytemobile, and Allot Communications purchased Oversi Networks and Ortiva Wireless – all in 2012. Opera Software acquired Skyfire the following year. 3 Remedy Options Where vendors rushed in to “optimize” in response to the mobile video problem, operators examined a variety of options for adapting their networks to handle video more efficiently. These options include: Transcoding. The conversion from one encoding type to another can reduce file sizes, consuming less bandwidth. Pacing. Rate-limiting some traffic to achieve “just in time” delivery avoids wasting network resources with content that the user has stopped watching. Policy. Using policy platforms to distinguish between applications with different QoE needs and subscribers of varying value is another way to take a more discerning approach to using finite network resources. Transmission Control Protocol (TCP) optimization. TCP, used in the exchange of packet-based data streams in Internet Protocol (IP) networks, wasn’t originally designed for video. A long list of fixes for its flaws included compressing data, eliminating redundant data and traffic-shaping to protect the quality of specific applications. Adaptive Bit Rate (ABR). Automated adjustment of the bit rate into which a given video stream is encoded helps prevent network congestion from forcing buffering pauses and allows greater QoE when networks aren’t congested. Caching. Temporarily storing popular content closer to end users shortens the delivery path between content and user, thus conserving bandwidth further upstream in the network. Buzz Fades Over time, investment in video and mobile-video optimization gave way to broader investment in optimizing the RAN: Cisco acquired Intucell, JDSU acquired Arieso, and Amdocs acquired Actix and Celcite – all in 2013. Amid this broader focus on RAN optimization, “mobile video optimization” as a buzzword became less pervasive. However, given the aforementioned distinctions between mobile video and other applications, mobile video optimization will only become more important to operators. 4 Mobile Video Optimization: The Caching Use Case As the industry takes a broad, diverse view of optimization, it’s worth revisiting the topic of caching in particular