As an IT personnel servicing multiple clients, it’s not unusual to receive requests for products upgrade from customers. The Internet has indeed evolved, from text-based websites to multimedia-rich contents. And as with every progress made, you either adapt or get left behind.
So the case turned out during a meeting with a client, who having just heard of the new way of transmitting live video over the Internet, requested that it be built into his website. He had an upcoming seminar and in order to break the distance barrier, the event had to be streamed live over the Internet. This was an uphill task, since I had not researched much into the new technology called video streaming.
Transmitting a live event from a location to other places is not new, news outfits like CNN and Fox have being able to broadcast live using satellite links. Improvement in video technologies, higher computing power and lower bandwidth cost set the stage for live broadcast of audio and video contents over the Internet. Achieving efficiency with new technologies means a marrying of the old with the new.
The Internet set the stage for live video streaming, with its high speed Internet connection and advanced video compression techniques. To however broadcast video from your website, you may have to do a checklist so you can get the best out of your investment.
Before You Set Up Video Streaming
1. Whether to stream or not to stream. It is one thing to deploy cutting edge technology on your website, its usefulness is another thing entirely. Do not integrate video streaming into your website if it will not reinforce your design objective. The cost of video hosting and bandwidth required is much higher than that for a conventional website. If it is a business site, then the increased cost must be justifiable.
Alternatives could be using graphics and text to tell the story, or transcription of the videos into text versions. Another alternative is using YouTube, you can display an image from the video, write a summary and place a link to the video’s location on YouTube. On YouTube your videos are hosted for free, and they can be watched on-demand.
2. Live streaming or Video on Demand. On-line video streaming comes in two forms – live streaming and Video on Demand. Live streaming is real-time broadcast over the Internet; your viewers can only watch the videos as you broadcast them. A missed scene cannot be replayed, and the contents cannot be saved on the computer of the viewer. These are appropriate for high profile meetings, seminars, breaking news and other visuals that are best enjoyed when viewed real time.
For Video on Demand, the videos are saved on the server and can be watched at any time. Packaged programs, musical videos, adverts, are examples of videos suitable for Video on Demand. Videos on you tube are on demand, they can only be downloaded if you’ve got a download manager.
Live streaming requires more hardware – capture cards, web-cams, video recorders, video compression utilities, broadband Internet access etc. It requires more precision, leaving room for no mistakes. Video on Demand less hardware – usually a PC and Internet connection. Your kind of contents and presentation should decide the form of video streaming chosen.
3. Self hosting or hosting by Content Delivery Network. Most web hosts offer video streaming support, so you could host your videos directly on the server that hosts your site. You manage your video streaming from the same window as your website, and you’re completely responsible for the administration.
You could also use the services of Content Delivery Networks who host your videos separately. You are given a separate control panel to manage your videos, and this reduces the weight on your site’s administration and management.
The two options have their pros and cons, but you’ll have to decide which is best for you. Hosting and managing your videos yourself, or having your videos hosted by a separate platform.
One clear advantage of Content Delivery Networks is that they’re uniquely designed to manage your videos, so you should get better value per Dollar spent on video streaming.
4. Quality vs size of your videos. Bit-rate is defined as the frequency of data that is transmitted every second. A bit-rate of 64 k bps means that 64 bits of data is transmitted every second. Transmission of data is measured this way. As a rule, the larger the video file, the higher the bit-rate, and the higher the bandwidth needed to transmit it over the Internet.
Every time I compress a video file, I reduce the size and also the quality, so that the bandwidth needed for transmission is reduced. The reason for compressing video is cost, smaller bandwidth is cheaper. But while trying to reduce the size of the video, you should not lose sight of the fact that the quality would be compromised.
A factor also to consider when setting the bit-rate is available bandwidth for households. If in a bid to broadcast high quality videos, I choose a bit-rate of 512 k bps for my videos. Without considering that most of my audience only have access to 256 k bps or lower, I risk losing them.
5. Having your videos on your home page or other pages. Placing your video on your home page means your video has to be played each time your site is visited. Delay in loading means that your visitors might not wait to watch them. When they are placed on other pages inside your site, your visitors have the choice of visiting the pages to view them. That way they can wait even if the videos takes a longer time to play.
Having your videos inside your website is also cost saving. Since you are charged per download. If your video is on the home page, you are billed whenever someone visits the site. Most times they never stay to watch the video. However, videos embedded inside the website are billed as visitors click on their links to watch them. You get better value for your money because more of your visitors actually watch the videos.
The list is not exhaustive, but the points outlined are pertinent before setting up video streaming on your website. Other issues like which hosting platform, the streaming media, video file to support etc will be considered along the way.
Since the advent of the internet, doing many interactive things including video streaming has become possible. The power of dynamic internet allows a person to transmit both audio as well as video at very high speeds; so that things like video streaming and teleconferencing become possible. In essence, video streaming is nothing more than taking a video and audio signal at the source and transmitting across the internet. This allows you to send any interactive video stream to any website that can receive dynamic data. The website that is displaying the video stream must have a special script that can show your video and audio stream.
You can easily create video streaming with nothing more than a simple microphone and a webcam or you can use more advanced equipment to generate the required signal. In addition, you will need some sort of an encoder software that will help you to transform the signal into a continuous stream. In order to achieve this, the streaming data have to be broken into packets and each packet needs to be checked at the moment of streaming in order to make sure that the data integrity is maintained. If there is an encoding problem, this can cause the loss of the coherence of the visual data, which can cause problems at the reception end as well. Otherwise visual frames as well as audio packets will be dropped during transmission and this can make the broadcast lose its overall coherency. Usually, the signal integrity can depend on your internet connection speed, as well as the quality of the line itself. Your internet connection should be good enough so that the data packets are also being forwarded to your ISP with minimal loss. In addition, your connection should have an overall stability for extended periods of time since internet broadcasting o streaming will usually take place for some time. An unstable connection can cause lot of dropped frames in your video stream.
The most popular type of encoding in video streaming is flash streaming. The greatest advantage of flash streaming is that it can be played back in any kind of a browser. You can easily use Internet Explorer, Firefox Mozilla, Google Chrome or even Opera to play back any flash streaming regardless of the computer or the operating system that is being used. Hence, whether the user is using an Apple computer or a classic PC won’t matter and even using Windows or Linux will not make a difference in playing back the stream. However, the main problem with flash streaming is the fact that it will use a larger amount of bandwidth and this can make it an issue in terms of bandwidth availability.
The second type of encoding mechanism that you can use is Shoutcast streaming. In fact, shoutcast streaming is a very popular streaming method that has been in use for over a decade. It is especially used for audio streaming and for internet radio stations, since it is an inexpensive and easy way of streaming. The shoutcast streaming encoder actually uses a sort of MP3 encoder that is Winamp compatible, so that it can be played back in variety of different platforms including Winamp player as well as VLC player. Especially, many online radio stations have popped up after the usage of Shoutcast streaming. However, the main disadvantage of Shoutcast streaming is the fact that especially video signals can be hard to playback in different type of browsers. Thus, you may end up using different scripts for different browsers and this may not be necessarily sensible for a website that displays video streaming. However, for audio streaming Shoutcast still remains the best option.
Almost all of the encoders for video streaming as well as audio streaming can be found for free on the internet. However, you will need to use some sort of a data service provider to provide a server for your streams. These encoders will send the video stream or the audio stream to the streaming server and the streaming server will send the signal to the whole of the internet. Of course, anytime that someone watches your video stream, then it will use that much of bandwidth from the server itself. For example, if you are streaming at 128 kps, then this will mean that the person who is watching your video stream will also be using a 128 kps of the bandwidth. So, if you have many people watching your video stream, then this can cause a lot of bandwidth to be used immediately by the server. In fact, with a simple calculation, if 50 users watch your video stream or your internet video broadcast continuously for a month; it can use as much as 50 GB of bandwidth from your server and from your service provider. Hence, this can cause large bills from your service provider.
Thus, it is essential that you choose a service provider that is able to give you affordable rates for the amount of listeners that you will have on your stream. In addition, some stream bandwidth providers will give you a fixed amount of bandwidth and they will charge you only for that, while some stream bandwidth providers can give provide you with a pay as you go system. In order to choose the correct stream service provider, you will need to have some idea of how many people will watch your stream or broadcast. Of course, needless to say, your service provider should also make sure that they provide continuous support for your video streaming broadcast. Furthermore, script support should also be provided, so that you can embed a compatible script on your website. This way, you can make sure that your video stream can reach as large number of people as possible. In the end, you can do a lot of interesting activities with video streaming and you can even start your own internet TV station or your own online radio. So, start looking at your options and start your personal internet broadcasting today.
Dr. UGUR GUVEN is an Aerospace Engineer (PhD). He has worked as the Technical Director of various TV Channels and he is currently a Technical Consultant to many TV channels today. Dr Guven has been involved with advancement of internet tv broadcasting and video streaming technology since 2000.
Video surveillance systems currently are undergoing a transition where more and more traditional analog solutions are being replaced by digital solutions. Compared with an analog video surveillance system, a digital video surveillance offers much better flexibility in video content processing or data transmission. At the same time, it, also, have ability to implement advanced features such as motion detection, facial recognition and object tracking. Applying digital systems, makes the security system capable of transmitting video through the Internet, so we need to study the different methods of video streaming over the network. Streaming is the process of playing a file while it is still downloading. Streaming video is a sequence of “moving images” that are sent in compressed form in a way that it can start being proceed before it is completely received like video clips on a Web page.
Here, some of the network protocols used in video streaming are described. The focus is on the features of most important protocols in video surveillance including TCP, UDP and RTSP.
Protocols in streaming technology:
Protocols are the rules implemented for a particular technology, which in streaming technology are used to carry message packets, and communication takes place only through them. Some of the protocols used in streaming technology are described as follows:
SDP:
SDP, standing for Session Description Protocol, used to describe multimedia sessions in a format understood by the participants over a network. The purpose of SDP is to convey information about media streams in multimedia sessions to help participants join or gather information of a particular session. In fact, SDP conveys information such as session name and purpose, times the session is active, codec format, media in the session, Information to receive those media (addresses, ports, formats and so on). A participant checks these information and takes the decision about joining a session.
SDP is aimed primarily for using in large WANs (Wide-Area Network) including the internet. However, SDP can also be utilized in proprietary LANs (Local Area Networks) and MANs (Metropolitan Area Networks).
DHCP:
Dynamic Host Configuration Protocol (DHCP) is a network protocol that enables a server to automatically assign a dynamic IP address to each device that connected to the network. By this assigning, a new device can be added to a network without the bother of manually assigning it a unique IP address. The introduction of DHCP eased the problems associated with manually assigning TCP/IP client addresses, resulting in flexibility and ease-of-use to network administrators.
DHCP is not a secure protocol, since no mechanism is built to allow clients and servers to authenticate each other. Both are vulnerable to deception, as one computer can pretend to be another.
RTP:
Real-Time Transport Protocol (RTP) is an internet protocol standard to manage the real-time transmission of multimedia data over unicast or multicast network services. In other words, RTP defines a standard packet format to deliver real-time audio and video over IP networks. RTP does not guarantee real-time delivery of data, but it provides mechanisms for the sending and receiving applications to support streaming data. It is utilized in conjunction with Real-Time Transport Control Protocol (RTCP) to ensure that monitor data delivery for large multicast networks is provided and Quality of Service (QOS) can be maintained. Monitoring is used to detect any packet loss and to compensate any delay jitter.
RTP is used extensively in communication and applications which involve streaming media such as telephony or video teleconference applications. The recent application of RTP is the introduction of VoIP (Voice over Internet Protocol) systems which are becoming very popular as alternatives to regular telephony circuits.
RTCP:
Real-Time Control Protocol (RTCP) is the control protocol that works in conjunction with RTP to monitor data delivery on large multicast network. Providing feedback on the quality of service being provided by RTP, is the RTCP’s primary function.
RTCP control packets are periodically transmitted by each participant in an RTP session to all other participants. It is important to point out that RTCP carries statistical and control data, while RTP delivers the data. RTCP statistics contain sender or receiver reports such as the number of bytes sent, packets sent, lost packets and round trip delay between endpoints. RTCP provides a way to correlate and synchronize different media streams that have come from the same sender.
RTSP:
The main protocol in streaming is Real Time Streaming Protocol (RTSP), which used to transmit stored or live media data over the IP network. It provides client controls for random access to the stream content. This application layer protocol is used to establish and control either a single or several time-synchronized streams of continuous media such as video and audio. RTSP servers use the Transport RTP in conjunction with RTCP, so that RTP acts as the transport protocol and RTCP will be applied for QOS (Quality of Service) analysis and also synchronization between video and audio streams. Consequently, RTSP can both control and deliver real-time content. The RTP and RTCP are independent of the underlying transport and network layers. In fact, RTSP is considered more than a protocol and provides a simple set of basic commands to control the video stream.
RSTP is based on the bandwidth available between the client and server so that breaks the large data into packet sized data. This, applied to live data feeds as well as stored. So, client software can play one packet, while decompressing the second packet and downloading the third media files. This enables the real-time file to be heard or viewed by the user immediately without downloading the entire media file and also without feeling a break between the data files.
Some features of the Real Time Streaming Protocol are listed as follows:
RTSP is capable of presenting media streams from different multimedia servers.
Controlling and delivering real time media between a media server and large numbers of media clients are feasible by RTSP.
Firewall friendly: Both application and transport layer firewalls can be easily handled by means of protocol.
RTSP provides on-demand access of multimedia items such as stored real time audio/video files, live real-time feeds, or stored non real time items.
New parameters or methods can be easily added in the protocol, so it enables extension.
There is appropriate control on the server. The server cannot stream to clients in any way such that the client cannot stop the streaming.
Frame level accuracy makes protocol more suitable for media applications.
RTSP allows interoperability between client-server multimedia products from multiple vendors.
HTTP:
Hypertext Transfer Protocol (HTTP), as an application-level protocol, is the set of rules to transfer files (text, graphic images, sound, video, and other multimedia files) on the web, so servers exchange information by using these rules. HTTP uses a server-client model in which the Web browser is client. When a user opens this Web browser, an HTTP command will be sent to the Web server. The browser uses HTTP, which is carried over TCP/IP to communicate to the server and retrieve Web content for the user.
It is worth mentioning that, HTTP is used for distributed, collaborative, hypermedia information system in addition to the context of World Wide Web.
RTMP:
The Real Time Messaging Protocol (RTMP) is used to transfer audio, video, and meta-data across a network. In fact, it is a system to deliver on-demand and live media to Adobe Flash applications which was developed by Adobe Systems. RTMP is a TCP-based protocol which maintains persistent connections and allows low latency communication. Splitting streams into fragments leads to delivering streams smoothly while transmitting much information. RTMP supports video in MP4 and FLV and audio in AAC and MP3.
Some advantages of RTMP include that it can do live streaming, allowing people to watch a video while it is being recorded. Also, it is capable of dynamic streaming, meaning that video quality adjusts automatically to bandwidth changes and seeking to later parts in a video is possible, which is particularly useful for longer videos. Players maintain the tiny buffer rather than downloading a video during playback, thus less bandwidth is used. RTMP streaming is able to skip forward to anywhere in a video at any point in time, so you can skip forward to what you want to see, without any unnecessary waiting. While with HTTP, only what is already in browser cache can be viewed. When RTMP is used as a protocol, host will need to have a dedicated server installed for RTMP.
However, RTMP has several disadvantages: due to streaming data to the player, the bandwidth of the connection must be larger than the data rate of the video, so if the connection drops for a couple of seconds, the stream will stutter. Also, since it uses different protocols and ports with HTTP, it is vulnerable to being blocked by firewalls. The biggest drawback is that RTMP only works in Flash and not in HTML5. Hence, it may be replaced by other streaming protocols with wider support.
TCP:
Transmission Control Protocol (TCP) is a popular transport layer protocol which is connection-oriented and it supplies a reliable byte stream to the top layer, called as the application layer. TCP has a positive acknowledgments mechanism and also provides a mechanism for congestion avoidance to reduce the transmission rate when the network becomes overloaded. TCP guarantees that all packets arrive undamaged in the correct order, reordering out-of-order packets and/or asking a retransmit of lost packets.
To ensure the reliable data delivery over the network, the TCP employs window based transmission mechanism where the sender maintains a buffer, called a sliding window, of sent data to the receiver. A receiver acknowledges received data by sending acknowledgement (ACK) packets. If a sender receives an ACK packet for the data in its window, it removes that data from the window, because it has been successfully transmitted to the receiver. TCP employs this mechanism for controlling of flow, so that a receiver can tell the sender, when it cannot process the data at the arriving rate. This mechanism also informs the sender that how much buffering space is available at the receiver’s end, in order to avoid overfilling of receiver’s buffer window.
TCP is a time-tested transport layer protocol that provides several features like reliability, flow control and congestion control. TCP is also a robust protocol because it can adapt with different network conditions.
The various function of TCP
Data transfer- The TCP can transfer a continuous stream of data among the users in the form of segments for transmission through the network.
Reliable delivery- The TCP must have the recovering ability from data that may be damaged, missed or may be duplicated over the network. This is done by assigning a sequence number to each segment being transmitted on the network and receiving a positive acknowledgment (ACK) on successful delivery. By using of sequence numbers, the receiver ends arrange segments in correct sequence, that may be received out of order and to avoid duplicate packets. In TCP, Damage is handled by adding a checksum to each segment which is being transferred, finally the checking is done at the receiver, and the damaged segments are then finally discarded.
Flow control- TCP provides a mechanism that helps the receiver to control the amount of data sent by the sender.
Connections- A Connection is combination of sockets, sequence numbers, and window sizes. Whenever the two processes want to communicate, their TCP’s has to first establish a connection. Once the communication is complete, the connection has to be terminated or closed.
UDP:
User Datagram Protocol (UDP) is a much simpler transport protocol. It is connectionless and provides simple capability to send datagrams between a pair of devices. It is not guaranteed for getting the data from one device to another, does not perform retries, and does not even aware if the target device has received the data successfully. UDP packets are not transmitted directly to the ‘true’ IP address of the receiving device, but are transmitted with a specific device allocated IP multicast address.
The operation of UDP protocol is so simple. When the application layer invokes UDP, the following operations are performed by UDP:
Encapsulates the data of users into datagrams.
Forwards these datagrams to the IP layer for the transmission.
On the other side, these datagrams are then forwarded to UDP from the IP layer. Then UDP removes the data from the datagram and forwards to the upper application layer. In UDP, a port is a number that specifies the application which is using the UDP service. It can be assumed as an address of the applications.
There are various applications that use UDP as their transport protocol, like Routing information protocol, Simple network management protocol, Dynamic host configuration protocol etc. Traffic of voice and video over the network is generally transmitted by using UDP protocol.
Comparison between some of protocols:
TCP is a connection-oriented protocol that creates end to end communications. When there is a connection between the sender and receiver, the data may be sent over the connection. UDP is a simple and connectionless protocol, therefore it does not set up a dedicated end to end connection between the sender and receiver before the actual communication takes place. The data transmission occurs in one direction from sender to receiver without verifying the state of the receiver.
In comparison to TCP which provides data integrity instead of delivery speed, RTP provides rapid delivery and has mechanisms to compensate any minor loss of data integrity.
It is also worth knowing that RTSP can support multicasting. You can use this protocol to deliver a single feed to many users, without having to provide a separate stream for each of them. While HTTP cannot do this; it is a true one-to-one delivery system.
Video streaming protocols for video surveillance:
IP cameras are the important application of RSTP protocol. RTSP-enabled IP cameras are important components of modern video management systems, by which user can use media player to watch the live video from anywhere. RTP and RTSP are allowed for the direct video feed capture from video surveillance IP-cameras. RTSP provides unprecedented facility of implementation and has been applied by nearly every mainstream IP-camera manufacturer in the market.
Also, today the video industry uses both of TCP and UDP, each with strengths and weaknesses when it comes to live viewing, playback, error correction, and more. In IP video, TCP and UDP may represent very similarity in dedicated surveillance networks.
MJPEG is typically transported via the TCP protocol. TCP guarantees delivery of packets by requiring acknowledgement by the receiver. Packets that are not acknowledged are retransmitted.
UDP is the preferred method for the transfer of live video streams at the Transport layer of the IP network stack. UDP is a faster protocol than TCP and for time sensitive applications (i.e. live video or VoIP), it is better to live with a video glitch caused by a dropped packet than to wait for the retransmission which TCP guarantees. However TCP is definitely more firewall friendly as some networks will block UDP video. UDP is most suitable for networks with very little packet loss and bandwidth that is guaranteed through QOS mechanisms.
MPEG-4 video is typically transmitted over UDP or RTP or RTSP. UDP does not guarantee delivery and provides no facility for retransmission of lost packets. UDP transport provides the option of IP Multicast (IPmc) delivery, where a single stream is generated by the camera may be received by multiple endpoints, the Media Servers.
On the other hand, where more than one client/viewer wants to see a live video stream in a network, multicast video should be used. Multicast video always uses UDP at the Transport layer.
It is worth knowing that, in bandwidth-limited applications su
data, is awesome for many reasons. From the consumer’s perspective, it implies saving time since one does not have to download a file first, and then consume it. Also, members of the public do not have to manage vast quantities of data and space on their computer’s hard drive or external disks anymore, since there is no data to download and save as such. From the content producers’ perspective, streaming also offers great opportunities: with internet videos and webcasts of live events, there is no file to download, therefore it is hard for most users to save content and distribute it illegally.
Streaming is a relatively recent development, because broadband connection had to run fast enough to show the data in real time. If there is an interruption due to congestion on the internet, for example, the audio or video will drop out or the screen will go blank. To minimise the problem, computers store a “buffer” of data that has already been received. If there is a drop-out, the buffer goes down for a while but the video is not interrupted. Streaming has become very common thanks to the popularity of internet radio stations and various audio and video on-demand services, including Spotify, Soundcloud, Last.fm, YouTube and the BBC’s iPlayer. While streaming initially made its mark in the music sector, with music streaming revenues generating $3.3 billion at the end of 2014[1], streaming is currently making phenomenal headway in the video distribution and consumption space.
The video streaming market today: beyond distribution and into content creation
Video streaming: the technical bit
Video streaming technology has come a long way: the most influential group, of course, are the streaming technology providers themselves, who choose which technologies and services to integrate into their platforms. These include Apple, which provides QuickTime as well as the HTML5-based technology to reach iOS devices; Adobe with Flash; and Microsoft with Windows Media and Silverlight. In the early days of streaming, the most relevant playback platforms were Windows and Macintosh computers.
While Apple and Microsoft still hold tremendous leverage, computer platforms tend to be more open than mobile devices, while the latter comprise the fastest growing segment of streaming media viewers. Because Apple owns both a very popular platform (iDevices) and operating system (iOS), it retains absolute power to control standards adopted by Apple devices. Other mobile influencers tend to be split between hardware vendors – like LG, Samsung, Motorola, Nokia and HTC – and mobile operating system providers like Google (Android) and Microsoft (Windows Phone).
Streaming media delivery providers such as online video platforms (“OVPs”) (which are productized-services that enable users to upload, convert, store and play back video content on the internet, often via a structured, scalable solution that can be monetized) and such as user-generated-content sites (“UGC sites”), also influence streaming technology adoption. For example, though Microsoft introduced Silverlight in 2007, it wasn’t supported by any OVP until 2010, stunting its adoption. In contrast, OVPs like Brightcove and Kaltura, and UGC sites such as YouTube and Vimeo were among the first to support the iPad and HTML5, accelerating their adoption.
While there are dozens of providers in both markets, the key OVPs include Brightcove, Kaltura, Ooyala, Sorenson Media, Powerstream and ClickstreamTV, while the most notable UGC sites are YouTube, Vimeo, DailyMotion, Viddler and Metacafe. On the video live-streaming front as well, technology has made significant strides. Specialised OVPs such as Ustream and Livestream offer instant broadcasting of user-generated live videos with a live chat window running alongside the video player, giving users an opportunity to not only watch events as they unfold but comment on them, too[2].
YouTube made a video live streaming service available to its users too. And now, the icing on the cake: video streaming distributors and providers. The description of this whole ecosystem of video streaming would, indeed, not be complete without mentioning the providers of on-demand internet streaming media also called streaming video on-demand services (“SVoD services”). From 2011, the press began blogging about the most popular streaming media services that would bring high-quality commercial content streamed to the TV sets, smartphones and computers of the masses[3].
Netflix, Amazon Video on Demand (now rebranded Amazon Instant Video and Amazon Prime), Hulu Plus and Vudu came out on top (“SVoD providers”).
Replicating the successful business model of music streaming in the video streaming sphere: it’s all about scale, baby
SVoD providers have it so good: not only can they benefit from the great strides made by streaming media technology since the mid-noughties, but they can also educate themselves faster thanks to, and avoid the pitfalls which threatened, their predecessors, i.e. streaming music on demand providers such as Spotify, Deezer, Pandora, Rdio, Grooveshark and Beats (the “SMoD providers”).
While SMoD providers typically charge USD4.99 per month for an access plan to their services, and up to USDD9.99 per month for a premium plan, SVoD providers start their monthly subscription plans at USD7.99 with a maximum price of USD11.99 per month for SVoD services on up to 4 screens per household. Fearless Netflix even got a lot of flak, in April 2014, for hiking up its new subscriber fees globally by USD1 to USD2 a month[4]. If we quickly do the maths, we can forecast that there is more money to be made in SVoD services, than in SMoD services, provided that these services are scaled up.
And scaled up they are: on 23 April 2014, Amazon announced a licensing agreement that gives Amazon Prime members exclusive access to highly-sought after HBO’s library of original content, hence undoubtedly increasing the appeal of becoming an Amazon Prime’s subscriber. On 24 April 2014, competitor Netflix announced that it had contracted with three small cable companies to provide subscribers access to its content via TiVo DVRs, while on 28 April 2014 it announced a deal with Verizon to provide Netflix subscribers high-speed online access to streaming content, the second such deal Netflix has made with an Internet service provider (“ISP”).
As the technology industry – and to a degree the entertainment sector – function very much on a “winner take all” economic model, streaming content is an evolving battlefield teeming with opportunities and risks, in which companies assert their dominance and grow their market share. There are some clear winners, in the SVoD services’ sector, such as Netflix which, in the first quarter of 2014, added 2.25 million streaming subscribers in the US and a total of 4 million worldwide. It now has 35.7 million US subscribers and more than 48 million globally, in line with its long-term goal of 60 to 90 million domestic subscribers. It all makes sense from the consumer’s standpoint too: streaming is converting the most valuable downloaders (of music and video content) into subscribers and in doing so is reducing their monthly spending from USD20 or USD30 to USD9.99 on average.
By the end of 2014, music streaming revenues accounted for USD 3.3 billion, up 37% from 2013. In comparison, online and TV-based video streaming services combined to pull in a revenue of USD 7.34 billion in 2013, a figure that PriceWaterhouseCoopers (“PwC”) says will rise to USD 11.47 billion in 2016, before reaching USD 17.03 billion in 2018. That rise will be driven primarily by subscription video services such as Netflix and Hulu, PwC says, rather than by through-TV subscriptions.
The leap into content creation and production
What is interesting is that SVoD providers are going beyond what SMoD providers have ever done: they are entering the content production sphere, in order to enrich their catalogues and offerings; to expand their networks of, and reach to, high-powered executives, producers and movie-stars as well as to assert their newly-acquired status and clout. Online streaming video services such as Netflix and Hulu will make more money per year than the US movie box office by 2017, according to a new report release by PwC.
The report projects that streaming services will be the biggest contributor to the American filmed entertainment industry in four years, as the revenue generated by TV and subscription video on-demand providers reaches almost $14 billion, $1.6 billion more than the amount earned from the traditional cinema box office. Therefore, SVoD providers have, and will keep on having, a lot of disposable cash to invest.
How to better invest this available income than in producing high-quality video content, to enrich one’s catalogue and products offering? The main area streaming services will have an impact on the traditional box office, the PwC report says, is in release dates. At the moment, most movies are given months in theaters before they slowly make their way to streaming services. PwC says the strength of companies such as Netflix is expected to put pressure on the industry to make this transition faster, offering filmed entertainment to consumers earlier.
More importantly, SVoD providers keep on expanding their content inventories. Netflix already has USD 7.1 billion in existing obligations for original and licensed content, and it recently contracted for an original Spanish-language series; a new series from Mitch Hurwitz (the creator of much-loved Arrested Development); a third season of House of Cards and a final season of AMC’s The Killing. Indeed, the economic returns of House of Cards, the test case, were as successful as the critical reviews. Netflix’s new strategy fortified its existing revenue model-acquiring and retaining subscribers-and even opened up new revenue streams such as content licensing or even a branded channel with traditional distributors. Netflix spent roughly USD 100 million to produce the first season of House of Cards plus additional marketing investments, including advertising buys for primetime TV spots and high-profile billboards. If House of Cards brought in half a million new Netflix subscribers, with the same average life span as current subscribers (an estimated 25 months), the show would have just about broken even in two years. The real test was the lifetime value of these new customers.
What if many or most turned out to be opportunistic viewers who ended up canceling their subscriptions a few months after watching House of Cards? Then the breakeven opportunity looked vastly different. For example, if the average customer life span was closer to four months, then Netflix would have needed more than three million new subscribers for the project to breakeven-essentially, a 43 percent increase over its current average acquisition rate. Needless to say, this debate is now closed and, in addition to its string of series, very successful Netflix has brokered many recent theatrical deals – it plans to release the sequel to Ang Lee’s Crouching Tiger, Hidden Dragon day-and-date online and in Inmax theatres, and has struck an exclusive four-picture deal with Adam Sandler – which have supposedly enraged many in the business.
Speaking at a keynote in Cannes’s MIPCOM in November 2014, Netflix chief content officer Ted Sarandos insisted that the company was only looking to modernize a theatrical distribution model that “is pretty antiquated for the on-demand audiences we are looking to serve”. Netflix, he said, is not looking to kill windowing but rather to “restore choice and options” for viewers by moving to day-and-date releases. Not only that, but Sarandos said Netflix would be expanding into more niche genres, including the financing of documentaries and art-house films. Hence, the marketing stunt with teaming up with mega movie star Leonardo di Caprio on the release of documentary Virunga focusing on the fight against poaching endangered gorillas in the Democratic Republic of Congo. The documentary was released simultaneously on Netflix and in theaters in New York and Los Angeles on 7 November 2014. Amazon Prime’s tally in content creation and production is also impressive, most notably thanks to its decision to engage Woody Allen to write and direct a series for its SVoD services in January 2015 and its competitive force in TV by landing two Golden Globe trophies for best comedy for its critically praised Transparent and actor for series star Jeffrey Tambor also in January 2015.
So the future is more than bright, for SVoD providers, but what are the threats to their growing supremacy and market share?
A sorry state of affair for SVoD providers and traditional video distributors: counterfeiting in the video streaming market
A tentative expansion to international territories? A false alarm
Initially, the major threat to the rise and scaling up of SVoD services worldwide came from the reluctance, by several European countries to accommodate and “psychologically adapt” to the business model offered by the likes of Netflix.
The French, in particular, were a headache: In the own words of then French Minister of Culture Aurelie Filipetti, “(the French) are absolutely not going to close the door to (Netflix), but they need to get used to the differences with the French market and how they can participate constructively.” France has some of the world’s toughest rules for protecting its home-grown film and music industries, and none of these will make it easy for a foreign service like Netflix to make a serious dent in the market. The company, which eventually started offering SVoD services in France around November 2014, faces higher taxes than it is used to, including 20 percent VAT, as well as obligatory investment quotas from its profits. Indeed, SVoD services based in France with annual earnings of more than 10 million euros are required to hand over 15 percent of their revenues to the European film industry and 12 percent to French filmmakers.
Meanwhile, France insists that 40 percent of mainstream broadcasters’ content must be in French, while existing SVoD providers – including Canal Plus’ “Infinity” and Wild Bunch’s “Filmo TV” – are currently forced to wait 36 months after a film’s cinema release before they can stream that content online. These rules – the so-called “Cultural Exception” – mean that France retains a healthy film and music industry despite fierce competition from the Anglo-Saxon world. And while some commentators have said this model is outdated as ever-increasing numbers of people get their audiovisual entertainment online rather than from more traditional TV and radio media, France is nevertheless continuing to do all it can to protect its homegrown industries.
As mentioned above, despite these hurdles, Netflix eventually started offering SVoD services in France, the toughest foreign market to enter as of yet, during the fourth quarter of 2014. At MIPCOM 2014, Netflix chief content officer Sarandos went on record for saying that viewer behaviour, in Germany and France, was “on par with our successful launches elsewhere in the world” and that Netflix prison dramedy ‘Orange is the new black’ was the most watched show on the SVoD service in all of the six new European territories. Sarandos added that the viewing mix in Europe – about 70 percent television series and 30 percent feature films – was also similar to that on Netflix services around the world. Therefore, the major threat to SVoD providers, and their more traditional video distributors, lies elsewhere.
The culprits: illegal video streaming programs and providers
While the illegal downloading of music has decreased compared to previous measurements (about a quarter of people who use music streaming services still download music illegally, compared to 32 percent in September 2014), 35 percent of people who use SVoD services are still downloading movies and TV series illegally. This is according to the study Trends in Digital Entertainment, from January 2015, which is conducted by GfK and appears once per quarter. Some illegal SVoD providers are alive and kicking such as Time4popcorn. They offer SVoD services to members of the public, on the internet, without having paid proper and agreed licensing royalties to the owners of the rights in the video content which is being streamed on their channels.
One of these illegal SVoD providers was Aereo.com, which filed for Chapter 11 reorganization proceedings in November 2014. In June 2014, the US Federal Supreme Court handed down a decision in ABC v Aereo. Aereo, a TV-over-the-internet service, had introduced a disruptive business model, using thousands of very small antennas stored in a warehouse, to live stream broadcast signals which they had encoded into packets, directly into the home of users. It was sued by the broadcasters (originally including 21st Century Fox, CBS, NBC and ABC) for infringement of their copyright in public performance. Aereo defended its actions claiming that all it did was to provide a device to watch a programme that was already available. The Supreme Court decided in favor of the broadcasters, ruling that Aereo and its cloud-based technology was too similar to a traditional cable company to say that its service did not infringe. The failed watch-TV-on-the-Internet startup Aereo.com may come back though, since TiVo bought its trademarks, domain names and customer list at auction, for the bargain price of USD1 million in March 2015. TiVo could be looking into offering an Aereo-like service but one that is licensed by TV networks[5].
During the AIPPI Congress in September 2014, Elizabeth Valentina, Vice President Content Protection for Fox Entertainment Group, (speaking on her own behalf as Fox was still litigating the case), pointed out that Aereo’s business model involved the streaming of broadcast content obtained without permission, authorisation or license, and for which service Aereo were charging their subscribers. This business model was harming that of the broadcasters and content owners, by devaluing their content, interfering with exclusive deals for content to be delivered over the internet and to mobile devices, as well as diverting eyeballs from TV advertising revenue. It was a harm clearly recognised by Judge Nathan at first instance, in the broadcasters’ motion for a preliminary injunction. During the same congress, Sanna Wolk (Associate Professor at University of Uppsala, Sweden and co-chair of AIPPI’s copyright committee) compared the US position with that adopted in the EU where the CJEU in March 2013 ruled that online near-live streaming by the UK Company, TV Catchup, was an unauthorised “communication to the public” within the meaning of Article 3(1) of Directive 2001/29 (InfoSoc Directive) and therefore an actionable infringement of copyright. The CJEU concluded that as TV Catchup was making the works in the original “terrestrial” TV broadcast available over the internet, and hence using different technical means to retransmit the broadcast, this retransmission was a “communication” within the meaning of the Article 3(1). Furthermore in the circumstances the court did not have to consider whether communication was to a “new public”, as the new transmission required an individual and separate authorisation from the copyright owners. While full-blown litigation seems the obvious and mostly-used response to copyright infringement and counterfeiting in video streaming services, it is debatable as to whether an ardent battle against streaming video piracy is worth it. Indeed, drawing on the experience from the inconclusive fight, led by the music industry, against illegal downloads of music tracks offered by peer-to-peer websites in the early noughties, it may be worth biting the bullet and exploring non-legal avenues to this endemic and crippling infringement.
For example, Popcorn Time, dubbed the “Netflix for pirates” was recently on the run. Time4Popcorn.eu, one of the most popular iterations of the illegal movie site, has had its URL suspended by European regulators in October 2014, effectively turning off the lights for a site that had attracted millions of users in just a few months.
The European ID Registry knocked Time4Popcorn.eu offline due to suspicion that the page was registered with inaccurate administrator contact details. The site’s developers, rather than provide accurate contact information, simply relocated to Time4Popcorn.com. With more and more court decisions forcing ISPs to block access to certain websites in the territories that they cover, the best legal approach seems to request an injunction, in key territories, for ISPs to block end users access to the websites of illegal SVoD providers.
What’s in the stars for video streaming players and traditional feature film and sitcom producers?
In the short term, I think that traditional players in the TV and film industries, including Hollywood major studios, are going to start feeling the pain, as revenues are derailed by the economic and creative successes of legal and illegal SVoD providers alike. As a result, traditional feature film and TV series producers will have to up their game, focusing their financial and creative efforts on solely “block-buster” material projects. It is going to become even more difficult for independent and young directors and producers to finance their content creation processes, in the future.
In the long term, there will be a leap towards more high-quality content being produced (with stronger plots, bankable stars and exceedingly talented writers, directors and actors included in the content creation mix) by both traditional and SVoD content providers: Darwinism will be in the works, with the survival of only the fittest. Major film studios and distributors will have to adapt or die because video streaming is here to stay and will eventually scale up even more due to easier accessibility and affordability on major consumers’ territories, better wifi connections (in particular, due to the generalisation of optical fibre), a wider spectrum of devices on which to watch and stream videos (smartphones, tablets, PCs, TV screens, etc.) and changing habits towards culture consumption (such as, the reluctance to pay to watch movies, an inability to stay in front of a movie screen for around 2 hours for younger generations of consumers and the growth of cocooning).
All in all, the advent of SVoD services and the choice in various SVoD providers is a boon for consumers, as they are spoiled for choice in order to consume only high-quality content; will be able to avoid watching tiring and mandatory advertisements which are crippling TV shows, especially on US TV channels; and will be more in control over the devices on which they wish to consume TV series and feature film content.
The law and its actors (i.e. lawyers, judges, legislators) should accompany this change in consumption habits and video market offering, by being flexible and pragmatic, while protecting, enforcing and defending the rights of content owners and creators to stimulate the creation and production of the highest quality content in a competitive environment.
[1] “What the numbers tell us about streaming in 2014″ by Mark Mulligan, Music Industry Blog, 16 October 2014.
[2] “Occupy video showcases live streaming” by Jennifer Preston, The New York Times, 11 December 2011.
[3] “5 of the Best Streaming Media Services Compared”, Christina Warren, M