It is safe to say that probably every streaming service has delivered poor quality experiences to its viewers at some point.
At the same time, technical standards in streaming have been improving since the first D2C Streamer services started to emerge over 15 years ago. But as devices, networks, and video production continue to evolve, and particularly as audience sizes and expectations increase, poor viewing experiences persist, and some make headlines. So, what is the cost of poor quality? And what is being done about it?
This article was prepared with the benefit of expert insight from the team at Bitmovin.
What Do We Mean By Poor Quality?
Poor quality in this article means a poor quality of experience with video playback. In other words, anything the Player cannot play perfectly is a technical quality issue. This includes start-up failures, in-stream failures, rebuffering, and slow start-up times.
According to Vimeo research, technical issues cause 6% of churn for D2C Streamer services. For these services, the average ARPU is $15 per month, the average subscription length is 17 months, and the average lifetime value of a customer is $250. Clearly this type of reason for churn should be avoided. There are already other important topics that cause higher levels of churn caused by the content itself and the price of the service. D2C Streamer services do not need to add technical challenges to the list.
The Cost Of Poor Quality
Three lines in the Profit & Loss accounts link directly back to poor quality – loss of subscription revenue, loss of advertising revenue, and the extra cost of fixing issues.
Recent news headlines from high profile events that are now primarily available on streaming services have highlighted refunds being paid out for poor quality of experience (QoE) caused by technical issues. Whether a stream would not start due to user authentication or digital rights management problems, or whether it suffered from consistent rebuffering, the bottom line is that viewers will only put up with a certain level of inconvenience.
Player and Analytics solution provider Bitmovin extended Vimeo’s initial research. Their data analytics research of “best in class SVOD services” showed that a typical SVOD customer attempts 150 plays per month and has an average of 1 technical error every 15 plays. With an average subscription length of 17 months, the average user has 165 technical issues before churning. 6% of the total customer base churns for technical reasons. They concluded that for every 10% reduction in technical issues there would be a 1.1% increase in total lifetime value from the customer base. If 1 million customers pay $15 per month, that is worth $160,000 per year in additional revenue.
Advertising-supported OTT services have a different dynamic, but still are affected by the impact of technical errors. When the D2C Streamer’s goal is to maximize the viewing time of a viewer, any technical errors work against this objective. Research published by ResearchGate points to a 2.32% reduction in viewership for people who experience technical errors.
D2C streamers report the extra pressure on QoE when the aim is to monetize the content through subscriptions. Paying subscribers expect excellent quality, especially those watching on larger screens where resolutions are higher, so tools like client analytics and network measurement devices become very important. Monetizing through ads can put extra pressure on the delivery infrastructure to perform well (e.g., with dynamic ad insertion workflows), which in some cases can cause unintended issues with content delivery and the overall customer experience.
D2C Streamers also report that consumers will stop watching when their technical QoE is poor. One leading D2C Streamer measured that viewers watched programmes for 5-10% longer when QoE metrics were better. This made a significant difference to their business for attracting advertisers and retaining customers.
Beyond the headline-grabbing hits to subscription and advertising revenues, there is the more hidden cost of finding and fixing the technical issues. But this is not only an in-life customer service issue, where some technical issues drain hours and hours of time from technical teams. This is a product-launch app development issue. Because OTT video operates in a dynamic environment with many different devices and networks, and because the standards and specifications in these environments are not defined specifically for perfect video delivery, there is a continuous process of improvement and adaptation in the App development environment, where “the rubber meets the road” for video playback.
The cost of poor quality for a D2C Streamer is very hard to calculate. But the reputational damage can be clear. OTT-only services with subscription-based models attract very visible criticism in the market if the standard is poor, with QoE and App stability as the top two technical drivers of complaints.
Understanding Technical Issues
Understanding technical issues can be very challenging. Error codes are the start of the problem. Bitmovin reported that only 15% of total technical errors are clear, which leaves 85% unclear. The 85% is broken down to 20% that are completely unclear and 65% that are ambiguous.
Ambiguous errors relate to general error codes like Android’s ERROR_CODE_DRM_UNSPECIFIED error. This is an unspecified error related to DRM protection which needs more investigation to determine why the error occurred. Additional information on top of the error code and short description are important to support fast diagnosis and resolution of the error. The unknown errors do not provide any information about the root cause, so it is critical to have good reference documentation.
A video player can observe multiple technical error codes per hour. Some can cause noticeable QoE issues, like DRM errors (e.g., failed license requests), unrecoverable network errors (e.g., timeouts), and source errors (e.g., empty segments or decoding errors), while others may not, such as advertising errors and incorrect configurations. An advertising error may not be a serious impact to the viewer QoE, although it has commercial implications for the D2C Streamer and Advertiser. For some errors the Player will retry 2-3 times to play the video segment. The viewer may not even notice these errors, and perhaps they only experience a longer start-up time which is less impactful than a failure. In other cases, the Player may skip one of the video renditions (i.e., ABR bitrates) which cannot be played, which the viewer may not notice either. The key is to know which technical errors impacted a viewer’s experience, and by how much, in order to correctly prioritize the investment to fix them.
All error types need drill-down capability to pinpoint the exact technical issue that can lead to a resolution. There is a specific drill-down process to follow as shown in Figure 1, beginning at the Player level where the error is first observed.
From a Player perspective, it is possible to see all the errors. But only some errors can be fully understood at the Player. Some can be resolved, and others can be worked around. But it is not possible to understand and resolve all the errors. The whole OTT video supply chain must be analyzed to understand and resolve all types of technical errors.
The launch of a new version of an App or website is often directly linked to new revenue streams, QoE improvements, or cost reductions. Therefore, speed of launch is key to achieve these results quickly. But a fast “buggy” launch is not in anyone’s interest. Intigral, a leading D2C Streamer operating in the Middle East region, recently reported that it was able to achieve a 30% reduction in time to market for new App releases, based on their ability to better trust the quality assurance processes through high quality analytics and error reporting during development. To the list of the cost of poor quality, we can therefore add the opportunity cost of slow App releases.
Associating a real business cost, like lost revenue, with a technical error will support the prioritization of investments that protect D2C Streamer revenues and profits. But where the errors occur is a key part of what sort of investment needs to be made. Part 2 will focus on where the errors originate and who needs to fix them.
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