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Israel’s Yes says no to satellite

There is no argument satellite TV is now on death row in most developed nations, with the question being how long its path to oblivion will be. In some developing countries satellite TV will be around a long time and will actually expand in some over the next few years, with Asia Pacific set to increase its DTH subscriber base by around 7% to 90 million by 2024. It is in Europe and North America where the writing is on the wall and also in Israel, where telco Bezeq has just announced that its hitherto satellite platform Yes will cease DTH transmissions and migrate its 60,000 subscribers to OTT. Yes had been almost synonymous with DTH much as Sky has been in Europe or DirecTV across the Americas, so even though this is a relatively minor blow for satellite platform operators, it is further confirmation of the direction pay TV is travelling.

 

Yes has said the migration will proceed gradually over the next few years but that is still final and a blow to Spacecom as Israel’s primary satellite platform operator. The company made the usual statement about the decision being taken in the “light of trends in the TV content market that include lower barriers to entry, the emergence of new players, the establishment of OTT broadcasting technologies, changes in the value chain, and change in consumer habits.”

That is a reasonable summary of the factors propelling operators away from DTH even if the devil is in the unstated details. It was only a few years ago when operators would be advised OTT was only economically viable for niche channels with relatively low numbers of viewers scattered perhaps around the world. The trade-off point was just a few thousand viewers at most within a given satellite footprint, above which DTH became far more cost effective because the same signal was broadcast to any number of dishes within range. By contrast for OTT, being unicast, CDN and other costs scaled by number of viewers. Quality was also a constraint, with OTT access bandwidth often insufficient to deliver premium content consistently at high enough resolution, while network capacity impeded scale for live transmissions. Consumers still regarded the living room as the throne of TV – the place to consume premium content at quality.

All those factors have changed over the last few years even if there is still work to do on the quality front, especially over latency for live TV to usher in the era of Subscription Linear (SLIN). Bandwidth is rising continuously so that is much less of a constraint than it was, although Ultra HD will drive demand for ever higher bit rates and capacity over the next 5 to 10 years. Consumers have been wooed by the SVoD boom and also broadcast catch up portals into expecting access to content on demand via connected devices, and increasingly ability to consume live services on the go as well.

We can argue though that the biggest single factor making OTT a viable alternative to satellite transmission at scale is the development and maturation of multicast ABR (Adaptive Bit Rate Streaming). This is mainly because multicast ABR changes the economics, although it can also contribute significantly to latency reduction.

Broadpeak, a French developer of CDN-related technology, was the pioneer of multicast ABR with its nanoCDN, which then led to industry endorsement as Cable Labs enshrined it in its M-ABR Reference Architecture which was also underwritten by the DVB.  The stated aim was to encourage vendor interoperability in avoiding the bandwidth burden of unicasting.

For operators, it avoids having to pay CDN costs for every unicast instance, which would become prohibitive say for a live sporting event streamed to several million viewers. That was the underlying message of the Rethink TV report on Transcasting and the birth of the smart IP pipe, with the subtext How Multicast ABR gives ISPs a chance at displacing the CDN. That forecast the multicast ABR market would reach $852.2 million by 2023, driven initially by Europe largely because of Broadpeak being first to market and having the best version. However, there are signs now of the technology being embraced in Asia Pacific, where the enormous scale means that by 2023 it will be the largest region for multicast ABR in the world.

It is true that when ABR video delivery first burst on the scene over a decade ago it looked like it would be confined to some niche or user generated content and never challenge multicast IPTV enabled by Internet Group Management Protocol (IGMP) at a fixed bit rate. It seemed unlikely it could achieve the required QoS over an unmanaged network at variable bit rates.

But this was to reckon without the relentless progress both in infrastructure and mechanisms for overcoming the lack of guaranteed end to end bit rate, as well as inability to retransmit dropped IP packets. Furthermore, recent proliferation of live streaming, especially premium sports, has exposed both the cost and latency issues associated with unicast streaming.

While the cost savings are clear, Broadpeak and other M-ABR advocates have had to work harder to establish the latency benefits, because at first sight it might seem the process of converting from unicast to multicast and back again might add to total delay. However, this overhead is greatly outweighed by savings achieved in both major contributors to OTT latency, packaging and buffering.

Packaging is the process of converting video files into streams of chunks within larger segments at different resolutions with accompanying metadata for distribution via one of the prevailing ABR formats, such as DASH, to client devices. Broadpeak estimates that packaging typically adds 10 seconds to the latency budget. Then buffering is necessary to cater for varying network delays to packets, adding often as much as 30 seconds. It can be even more at times of peak demand as delays accumulate during playback.

The key to M-ABR reducing both the packaging and buffering delays lies in its overlaying of a managed element to the network by prioritizing the video traffic, much as happens in IPTV networks, while avoiding multiple unicast streams soaking up capacity. Prioritization is feasible because the amount of traffic generated is constant irrespective of number of users, until the point at which the multicast breaks out into unicast streams to the end device at the core network edge.

Firstly, this reduced both the size and number of chunks that would need to be buffered to ensure a smooth playout, which, according to Broadpeak, cuts the packaging delay down from 10 to 2 seconds in a typical OTT scenario. Then the more consistent packet delivery ensured by multicast ABR means that less data needs buffering in the device for smooth playback. Broadpeak estimates this cuts buffering delay from 30 to 2 seconds.

Further latency savings can then be achieved by combining M-ABR with CMAF (Common Media Application Format) and Chunk Transfer Encoding (CTE). CMAF allows smaller chunks, while CTE reduces latency at the head end because chunks can be encoded separately on the fly rather than having to batch a number together. Broadpeak contends that the combination of M-ABR, CMAF and CTE brings total OTT stream latency down to just 2 or 3 seconds, which we think will be hard to achieve consistently at present in real networks. However, it is clear that these technologies are playing a major role in persuading DTH operators the time is right to migrate to OTT.

We have seen for example John Donovan, CEO of AT&T Communications and responsible for the group’s video business, state in December 2018 that the group would launch no more satellites for DirecTV, which would switch over time to OTT, even if in this case no deadline has been set.

Comcast’s Sky has made similar signals in Europe having declared over a year ago that all its content will be available via online platforms. This leaves satellite platforms themselves having to migrate their businesses away from video, which currently accounts for around half of their revenues.

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