Ericsson’s Media Vision 2020

Ericsson recently released its vision for media in 2020, painting a picture of how the current trends, potential influences and likely scenarios may play out. While, each region and specific countries have unique factors that define their progress towards this 2020 vision, many common aspects exist within the industry and consumer behaviours.

In order for industry players to understand the key aspects driving change and build strategies for their journey up to and beyond 2020, Ericsson has defined what it sees as the six most influential factors, calling them “Game Changers.”

These factors are: “The forever evolving experience”, The IP initiative”, “Brand-Casting”, “Changing Consumption Models and Bundles”, “Cloud and Web Approach to TV” and “New Money, New Players”.

The remainder of this article is this editor’s greatly shortened version of Ericsson’s white paper, “The IP Imperative”. A copy of the entire IP white paper, as well as other Ericsson educational resources on the above six industry-changing factors is available from Ericsson here. The goal of this particular article is to encapsulate some key points from Ericsson’s brief on IP technology with the goal of encouraging you to consider carefully your future plans for IP technology. While reading the above IP white paper will provide an excellent 30,000-foot viewpoint, this version will give you much key information in abbreviated form.

The new era
The invention and global deployment of the network transport protocol IP has defined a new era that has reshaped our planet, our lives, and global industries including TV and media. This global investment in IP technology, reach and capacity has enabled sufficiently high quality delivery of video to transform consumer behaviours and enable new disruptive industry players.

Ericsson believes that by 2020, IP will have:

  • Enabled 50 billion connected devices, of which 15 billion are video capable
  • Fueled a 10x traffic growth in mobile networks, dominated by video
  • Transformed consumer expectations and behaviour by redefining their video experiences and the accessibility of those experiences, and adding value to every connected device they own
  • Driven collaboration between broadband providers, content owners, and new market entrants. IP is driving the transformation of newer delivery networks, spectrum allocation and, most crucially, business models in the industry.

Technology: The IP Imperative
The IP Imperative originates with technology. It looks at the dramatic impact of broadband IP connectivity and services alongside the increasing growth of IP connected “smart” devices and new, emerging methods of video distribution and associated business impacts.

The growing demand for broadband internet protocol (IP) services and TV Anywhere experiences has accelerated the need for long-term IP transformation to support a unified user experience across all traditional in-home and new IP devices.

IP comes of age: the inflection point of adoption
The past decade has been a spectacular journey for internet video, starting with the arrival of YouTube in 2005 and then, a year later, with the launch of Netflix’s flagship on-demand service. These services marked the rise of streaming over unmanaged networks.

Alongside the rise of IP-based VoD services, we have seen significant growth in video-enabled IP devices, with computers now joined by smartphones, smart TVs, IP set-top boxes, tablets and gaming consoles. In fact, between 2000 and 2013, the number of IP connected devices that can view video has grown from 200 million (personal computers), to over 1.6 billion. Ericsson predicts this number will increase to 15 billion by 2020. 

The dramatic increase in IP connected devices, especially within the mobile sphere, is driving radical change across the entire TV landscape. Ericsson’s June 2014 Mobility Report found that global mobile broadband subscriptions had reached 2.3 billion in Q1 2014. According to 2014 Statista research, global consumer IP traffic is expected to grow at a 21 percent compound annual growth rate from 40,905 petabytes in 2013 to 107,958 by 2018.

The use of IP in premium video delivery, whether using an internet “unmanaged” approach, or a managed “IPTV” approach, is already widespread. Many TV service providers already have well-established broadcast delivery platforms, mainly using MPEG-2 transport stream over a modulated RF carrier. These standardized approaches, including DVB-S2, DVB-T2, and ATSC, are further enhanced with IP, using hybrid delivery platforms unified in the consumer set-top box.

This combines the scale and reach of broadcast with the essentially needed personalization and on-demand provision of content through IP. These hybrid platforms have been largely proprietary in design, with some standards-based initiatives such as HbbTV being deployed in Europe and Australia. In May 2014, the European Broadcast Union (EBU) stated that approximately 93% of the connected televisions for sale in Europe already support HbbTV.

Connected devices and growing network capacity fuels explosive traffic growth
Today, nearly all video content delivered through the internet has been accelerated through global CDNs (Content Delivery Networks), with a trend of moving that technology deeper into the networks that are closest to the consumer. This is where telecommunications, cable and other internet service providers should be investing to provide the functionality to accelerate content in an assured way. This strategy can subsequently derive carriage revenues from content owners, broadcasters and other players, such as new over-the-top (OTT) aggregators that seek to assure high quality consumer experiences.

Complementing caching, storage and acceleration, video compression technology and specific implementations can dramatically transform the bandwidth required for any given quality of video delivery. The majority of video on IP networks today is based on the standardized MPEG-4 AVC (H.264) codec. Its long-term successor H.265 is already ratified, demonstrating 50 percent bandwidth savings for the same quality. Mass deployment will rely on decode support within the billions of video devices.

This strategy can subsequently derive carriage revenues from content owners, broadcasters and other players, such as new over-the-top (OTT) aggregators that seek to assure high quality consumer experiences.

The majority of IP-based video will be delivered to the home through fixed networks such as DSL/fiber and cable. Mobile/wireless networks will deliver all outdoor consumption. However in emerging markets with very little fixed infrastructure, the majority of all IP video delivery will be provided by 3G and LTE mobile broadband IP networks to mobile devices.

Mobile data traffic is expected to grow the most dramatically of any IP platform. Data traffic grew by 65 percent between Q1 2013 and Q1 2014. The report predicts a CAGR (Compound Annual Growth Rate) of around 25 percent between 2013-2019. This will result in an increase of around 10 times by the end of 2019. The rising number of smartphone subscriptions and higher consumption of data per subscription – mainly driven by video is the key factor. Mobile video traffic is expected to grow by 13 times between 2013-2019.

Managing this explosive data growth while ensuring quality of experience is a feature within LTE networks called LTE Broadcast. Based on the eMBMS standard within 3GPP, LTE Broadcast brings the dynamic ability to broadcast content to enormous numbers of devices, often in dense urban situations where unicast of content would never scale sufficiently. LTE Broadcast will also open up all new experiences in stadiums and around live events, where use of mobile devices can augment the live experience. With many trials of the technology underway, it’s certain this feature will be one of the critical enablers of mobile networks meeting the demands of an ever more connected and mobile consumer.

However in emerging markets with very little fixed infrastructure, the majority of all IP video delivery will be provided by 3G and LTE mobile broadband IP networks to mobile devices.

By 2020 high speed internet will be considered an essential utility and the penetration of broadband will reach 1billion home subscriptions, representing around 75 percent of digital TV homes. Global mobile broadband subscriptions will grow towards the 8 billion mark and these consumers will all have access to connection speeds that support high quality video.

In advanced markets, by 2020, 50%, of content watched will be on-demand and time-shifted.

The widespread availability of broadband IP for video, especially mobile, will also accelerate the shift in terms of consumption patterns. By 2020 in advanced markets, they will alter to such an extent that the time spent watching on-demand and time-shifted content will reach 50:50 parity with linear and live TV.

This shift is summed up by BBC executive board member, Howard Stringer: “The combination of the growth in mobile broadband and the growth in the young, aspiring global middle class dictates that the BBC must focus on serving the needs of that audience in whichever market it is operating in. Fundamentally, the BBC has to shift its focus from putting traditional broadcasting first to putting mobile first. By 2022, the BBC should be mobile first in every market outside the UK.”

The impact of IP technology and the networks that will serve ever more connected devices is the single greatest transformation element in TV since its inception. However, as 2020 approaches, we expect to see such a dramatic upshift in adoption and performance.

Satellite and terrestrial players especially, but also cable players with non-IP based broadcast delivery platforms, will need to find ways to quickly embrace the addition of broadband IP video delivery to the consumer, and potentially long term migration to pure IP video models. Many cable players are already re-engineering their physical network core assets.

What is clear is that the OTT disruption model of today, where new players, existing broadcasters and content owners leverage the internet for delivery, will evolve relatively quickly into an established model of collaborative, optimized video delivery through another player’s broadband IP network for carriage fee.

As the TV industry accelerates towards an IP-connected era, serving over 8 billion mobile broadband subscribers and 15 billion video-enabled connected devices, significant new growth opportunities and market disruption will increase. Those that define and lead the evolution of consumer expectation will derive the greatest success.

Fundamentally, the BBC has to shift its focus from putting traditional broadcasting first to putting mobile first. By 2022, the BBC should be mobile first in every market outside the UK.”, Howard Stringer, BBC executive board member.

The ultimate impact of IP
So, how will IP technology impact the segments of the media audience. Ericsson has some thoughts:

The IP evolution will redefine the meaning of television and video among all sectors. For example, today YouTube uploads more than 100 hours of video content to its servers every minute. In just seven years, Netflix has grown to 44 million paying subscribers. At that rate, Netflix could have 200 million subscribers by 2020 (60 million in the U.S. alone).

Content owners
Content owners and aggregators will soon have better access to the consumer by enabling them to directly offer their content to the viewer via IP delivery. This has the potential to be extremely disruptive and lucrative for content owners as they become able to sidestep traditional routes of consumer engagement via the broadcasters and service providers.

For traditional broadcasters, IP offers a way of expanding reach to consumers outside the entrenched ecosystem of operators fed by local and national content providers. With widespread IP device adoption, the 2020 consumers will want and will finally be able to watch broadcast TV on their second screen devices.

IP will allow a local TV station to broadcast a stream that is delivered both via air and across pay TV operators’ network and mobile apps. The complexity of an all-connected world suggests that broadcasters are best served by aligning with global standards for IP-broadcast hybrid platforms. Broadcasters will also need to work with all pay aggregators in-market to potentially monetize a large content back-catalogue and explore whether outsourcing much of these operational aspects makes sense.

Cable and satellite service providers
The rise of IP will have major impacts on both cable and satellite TV service providers as a method of finally delivering a true TV anywhere experience. For cable TV service providers, 2020 will see widespread adoption of the converged cable access platform (CCAP) initiative that will help put all the services into one logical control shelf across legacy RF QAM services, DOCSIS broadband IP services and VOIP services.

For satellite providers, the “OTT delivery model for all” approach offers a way to deliver on-demand content and value-add services such as cloud-based DVRs that were not possible with a pure satellite delivery. 2020 will see more satellite-IP hybrid networks as telecommunications and satellite operators become closer through agreement or acquisitions.

Broadcasters will also need to work with all pay aggregators in-market to potentially monetise a large content back-catalogue and explore whether outsourcing much of these operational aspects makes sense.

Telcos have a powerful core asset – the IP network. In most cases, Telcos also have the additional strength of a mobile broadband proposition. With rapid growth to 2020 in IPTV subscribers and use of IP video, Telcos will be in a strong position to grow from both TV subscriber expansion and also network-derived revenues.

The network owner/provider
For network operators, the road to 2020 is a positive one, with IP video a fundamental element of consumer broadband services that are as essential to consumers as other utilities. Yet rapid growth of traffic requires continual investment in capacity and specific video optimization to mitigate this traffic growth as much as possible.

The advertiser
For advertisers, the IP Imperative opens the door to a much closer and more effective targeting of ads to the audience. The notion of an end-to-end IP delivery path will open the realistic notion of highly personalized ad insertion. Pioneers will start around VoD and ultimately spread to live TV as the technology and, specifically, rights negotiations progress.

Final thoughts
The Ericsson white paper, “The IP Imperative” contains a great deal more information, including research statistics, expert opinion and suggestions. It provides a good basis for thought on your business and technology plans going forward. Again, the complete version of this paper, along with additional educational resources is available from Ericsson here.

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