Is Monetizing OTT Content a new flavour of the same old?

Monetizing_OTTToday Korea Telecom stated they would be using Ericsson’s Mobile Cloud Accelerator (MCA), an announcement that can be read in multiple sources including Azi Ronen’s Broadband Traffic Management Blog (here). In this way and following the tradition of KT for highly innovative technologies adoption, now encouraged by the huge LTE growth in that country, they are the first operator using the MCA solution that promises to achieve a better Quality of Experience (QoE) by the combination of caching platforms and the access network’s traffic prioritization. What I find most interesting about the MCA is of course the technical details around that combination of caching and prioritization, but even more importantly how Ericsson is marketing (and selling it) as a mean for monetizing OTT content. Let us try to describe the particularities around this in the next lines.

Content Caching

There are many Content Delivery/Distribution Network (CDN) solutions and providers in the market having huge data centres for storing the content providers’ popular information, and delivering it with high availability and a high performance thanks to distributed networks and techniques like smart load balancing. In example, an Over-The-Top (OTT) provider like Netflix could store the most popular Warner Brothers’ movies in CDN based data centres for allowing this content caching, being delivered directly from highly efficient data centres to the subscribers requesting these using AT&T or Telefonica networks and resulting on a faster service, and the resultant higher QoE. Ericsson pre-integrates one of the most popular platforms for CDN from Akamai Technologies, Inc. in the MCA solution.

Traffic Prioritization

The traffic prioritization in the other hand is a Policy Management and Enforcement (PCRF/PCEF) technique, typically used by the operators in the core network nodes for ensuring the premium content (for premium subscribers) have the maximum available bandwidth in the network, while the less valuable content is delivered on the remaining bandwidth or “best-effort”. Different priorities are typically set in the PCRF platforms and enforced in the PCEF elements (e.g. DPI’s or the actual traffic gateways like GGSN or P-GW) according to the services defined by the operators. The prioritization can be based on the subscribers’ profiles (e.g. subscribers paying more for having a better priority in the bandwidth allocation), or in the actual traffic (e.g. prioritization based on an order of protocols or applications in the traffic), or in a combination of both, being the latest the most typical scenario. The result is a secured QoE for the premium traffic and/or subscribers at all times, while the rest of the subscribers could get a variable QoE depending on the time of the day, network capacity, and any congestion condition on peak times.

Multiple other techniques exists for improving the QoE in the operators’ networks, and ensuring an optimal management of the increasing OTT traffic, including the Video Optimization. Today Light Reading published an interesting piece about the evolution of this topic (here).

Monetizing OTT services

Monetizing the OTT services has been the obsession of most operators in the modern networks, due to the fact some of these providers are making highly successful business using the operators’ networks as a free transport for providing the content and services to the end-users. Applications like Whatsapp or Skype can be used by the subscribers for communication in text, voice, and video, without having to pay a premium to the operators for those in most cases. Portals like Netflix provide video on demand in the same way. It is difficult to charge and control this traffic separately in the operator premises even with the most advanced Deep Packet Inspection (DPI) systems and Policy Management nodes, and the operators are losing revenue in their own services with these OTT’s. The approach of Ericsson with the MCA offers another monetization objective instead, allowing the operators selling the prioritization to the actual content providers as a mean to ensure a high QoE when the subscriber is loading their contents. As it was commented in my previous article “Three short stories on today’s Mobile Networks Performance” a research by the University of Massachusetts Amherst and Akamai Technologies shows the users start abandoning videos if these do not load within 2 seconds, and rate gets higher with higher latencies. The situation is the same with web pages, and an infographic from Strangeloopnetworks can be found below. According to Ericsson’s math during the MCA presentations a single second improved in the loading times of a popular content in Amazon or Netflix could represent a billion dollars gain at the end of the year, so here is your business case now.

Solutions like the MCA represents an interesting try to improve the OTT services monetization in the operators’ networks. The driver for adopting such solutions in the market is clearly the combination of improved QoE for the most popular content, and the additional revenue source from the content providers’ deals with the operator. We will have to wait and see if this is a successful approach… we could be asking KT soon.

A. Rodriguez

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