--Netflix-Class Services Can Be Built Overnight and Delivered Cheaply
--Verizon Attacks the Scaling of Internet Video Delivery
--Management and Security so Content Owners Can Track Assets Verizon, with its global network reach, is setting out to revolutionize the delivery of digital videos to the home, which is likely to trigger a global response from telcos everywhere, trying to follow suit in their own territory.
Verizon has developed the ability for anyone with content rights to create a Netflix type of online video service overnight. Instead of needing an application to be written for each and every device before it can play on them, this service will take content delivery and make it a cloud application, likely to need only a browser in order to play the content. The company says that it has multiple backbone lines across the globe delivering video at between 40 Gbps and 100 Gbps for this service.
Verizon has lined up best-of-breed technology suppliers, including Technicolor for content creation and post-production knowhow, Motorola for media transformation and digital workflow, Alcatel-Lucent for content delivery and unicast adaptive streaming and Hewlett-Packard for high-end ProLiant servers.
Faultline said a few weeks back, reporting from the IPTV World Forum in London, that wholesale CDNs were going to be all-the-rage, and that many of the suppliers there were targeting the space. Well, Verizon has gone one better, and brought three years of effort, the involvement of hundreds of employees and what by telco standards is a meager budget of $370 million to bear on something more than a CDN. This is an all-singing, all-dancing management suite and network that will change media distribution on the Internet and in the process attract the major TV broadcasters, and even some of Verizon's rivals, causing them to put more and more assets onto the Internet in more and more places.
Right now the US national broadcast networks--Fox, ABC, CBS and NBC--all build their own major Web portals, but their content could be distributed through hundreds of partners on the Web, except for one thing--once that content is out of their hands, how do they know that it won't be stolen, pirated, and generally used, but not paid for, in any number of ways?
One answer to that has been the creation of specialized services such as Hulu and Hulu Plus by broadcast network owners, which keeps such content under the networks' direct control--but eventually they would love this to be like physical DVDs--with inventory controlled, yet distributed widely, not only around the US, but around the world to thousands of retailers, with delivery, transcoding, and encryption all taken care of and delivered as unicast streams to consumers on any device imaginable. A sophisticated management system for such an undertaking is a must, given the complex content distribution rights they each have for their content.
Overnight, Verizon solves two problems by introducing such a service--it can vie for business with customers like Hulu and Netflix, offering them a route to market in return for cash. At the same time it would then take a great video weight off its core Internet lines, distributing them instead to secure appliances servers all over its network for last-mile access delivery by the network, which controls the consumer's broadband line.
So day one this goes up against Akamai and other CDNs, and although Verizon does not describe the internal network architecture to its digital media services system, this will create great deals for some of the innovators in their field of CDNs and video transcoding for supply contracts with Verizon.
But the implications and the rivalry don't stop there. Verizon is trying to manage every aspect of the process, so videos ingest into the system via the Web; workflow management to deliver orders (video streams) to Web retailers and on to customers; security and delivery of packages in the appropriate DRM and format for a given device; fault tolerant mirrored central servers for the US in southern California and northern Virginia; a metadata management scheme so that content owners can pick their own metadata, and then choose which search engines to expose this to.
We are making the assumption that the management of transcoding should take place as close to the edge of the network as possible--Verizon doesn't want multiple copies of the same content travelling over and over again across its network, so some form of local storage and local transcoding has to be assumed or else a different screen resolution on a device means delivering it to that region all over again.
This is why it is so important that content businesses can get a transparent report of where its assets lie in the network at any point, and how much of the content has been consumed--Verizon talks about SKU reporting (reporting of stock keeping unit codes) and about a unicast delivery service as part of the overall media platform, and this not only includes delivery, but packaging--so which combination of cross promotions and other video assets will travel together with the content--and this will extend to advertising.
Verizon says that its advertising platform will include real time and localized ad insertion and advertising placement analytics, even down to personalized advertising delivery. This is a hugely ambitious play to carry video over the Internet as an advantage, not a liability.
Verizon removed the cover on all of this at the NAB Show in the US this week and said that already four of the top five US TV networks were trying the system out and that it additionally has service trials with Turner Broadcasting, Hearst Magazines and The Associated Press. It also insisted that rivals such as cablecos and existing services such as Netflix are openly invited to become customers.
At first glance, this is a major US telco offering a video management service like Brightcove, but in truth this is the company's answer to the massive increase in video traffic which will create a separate network inside the Verizon network, segregating that traffic. In the words of Verizon technology VP Stuart Elby, "Video travelling over the Internet is going to suffer in quality, we are going to hit a capacity wall. We wanted to introduce this service before our customers hit that wall."
Another thing this is going to affect is how we search for commercial video on the Internet. Companies like TiVo, Rovi and NDS have all made major plays to help pay-TV operators create search indexes in the cloud, much of which relates to having reliable metadata available for search engines. Verizon customers will be able to decide which search vendors have access to its metadata to find its content, which could provide significant video leverage against the likes of Google.
Verizon says its digital media service is the first of its kind and will automate previously manual workflow processes associated with formatting, managing and delivering digital media to virtually any device or platform on a large scale. As a result, content owners and digital retailers will be able to more effectively produce, manage and distribute premium programming to consumers when, how and where they want to view it.
Verizon says that the majority of the patent-pending technology was created by its own staff, with only some additional technology brought in from its list of technology partners. So far about 200 Verizon developers have worked on the project, in addition to hundreds of other non-developer staff.
The service, under development at Verizon for nearly three years, is currently in a second beta with nine charter content-creation companies. It will be available for commercial release sometime in July, said David Rips, president of the Verizon division that's overseeing the project.
This report first appeared in Faultline.
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