Network strategies are underpinned by many aspects. It starts with consumer adoption of online and mobile video in droves. It continues with local caching and content delivery network initiatives meant to offload stress from metro loops. And it continues with accommodating what happens after all of that traffic is aggregated back to the core network. It’s safe to say that video distribution is the single-most pressing driver when it comes to upgrading networks of all arenas for the digital age.
“We launched our first data center in June 2013,” explained Clint Heiden, chief commercial officer at EdgeConneX, in an interview at ITW. “Back then, there were only eight peering points for video. In 2014, we opened 20 more data centers; bringing the video peering point number up to 29. That tells you much about how this market has grown.”
Heiden uses the example of the location in Phoenix, which effectively moved video distribution there locally from the previous edge in Los Angeles. EdgeConneX, which counts many of the large content companies as customers, said that until that happened, many companies had no sense of where the Internet edge actually started and stopped.
“When we got to Phoenix, our customers went from 50 GB to 100 GB of offloaded traffic in just three months. The content was bottlenecked up to Los Angeles, so when a local point was opened, all of our customers saw their traffic doubled, across the board. And, the MoS score went up 30 percent. And throughput went up 40 percent. And we found that as you give consumers a better experience, they consumed more.”
The “edge” is a little-understood concept, Heiden added. In order for the edge to be extended to a local market, peering points have to be established—not just connections from a remote peering point into a data center. “The content and the eyeballs have to be brought together in the same location,” he explained. “To qualify as moving the edge, you have to be able to serve 50 percent of a region’s eyeballs with 80 percent of the Internet’s content, from a local peering connection.”
Two years ago at the ITW show, a large social media company—one which may or may not have been featured in an Academy Award-winning movie—told Heiden that 80 percent of its content-serving issues were international. In other words, accommodating video wasn’t a big enough problem in its markets that it needed more than eight peering points. Now, it has a need for an escalating number of peering points domestically, because video traffic is growing exponentially on its platform.
And that will continue to drive growth in the edge data center space.
“Content is growing so fast, and video is growing so fast—our data centers are typically full before they open,” Heiden said. “And the edge has become so hot. We have seen a half-billion dollars total in this, either through direct investment or customer purchases.”
In addition to things like cable network DVRs, 4K Ultra HD streaming, gaming, video integration into social networks and so on, enterprise video is driving demand too. Consider healthcare and applications like telehealth. But, the reality is that almost every company is implementing some kind of video strategy.
“Chase thought they were a bank five years ago,” Heiden said. “Today, they’re investing a half billion in Chase.com to become a content company. And in fact in 10 years every company in the world will be a content company.”
While changes at the video edge are ongoing, the core and long-haul networks have a big part to play in the video ecosystem as well. Accordingly, Rangu Salgame, CEO for the growth ventures and service provider group at Tata Communications, said that supporting media is one of the important pillars of the company’s wholesale telecom strategy.
Today, over 24 percent of the world’s Internet routes travel over Tata Communications’ network, and its video network in specific covers more than 300 media hotspots in 125 cities globally. At ITW, it announced a video network partnership with China Telecom Global to enable and manage media content for customers in China and globally. The partnership, which began with the delivery of the 2015 World Figure Skating Championship from Shanghai to Japan earlier in the year, means that China Telecom Global will use Tata to carry all of its live sporting events.
“Mobile video consumption is growing at an exponential rate with a robust growth trajectory expected in the next five years,” said Pengcheng Fan, vice president of product development at China Telecom Global. “Through our new video network partnership, China Telecom Global can provide seamless connectivity for our media and entertainment customers across China. The partnership is defined by connectivity to key global destinations, premium quality and industry leading SLAs. We are excited about this partnership as it helps to further differentiate our service offerings in the market.”
It’s one of the first fruits of Tata’s recently launched media ecosystem, which combines traditional video contribution services with IP-based connectivity. The ecosystem enables seamless management of content as a cloud-based managed service and supports global media distribution requirements, over-the-top (OTT) and mobility applications.
“There are two big shifts happening in the media space,” Salgame said in an interview. “For one, television is dramatically changing from a consumption standpoint and linear TV is less of a focus for them, except when it comes to live events. Consumers still spend time watching live sports, so that’s critical for operators that want to monetize their linear offers.”
Also, because the consumption of entertainment content is increasingly non-linear as more viewers are opting for services like video on demand and OTT, the way content is delivered is changing.
“Netflix pioneered the idea of OTT, and no one has looked back,” Salgame said. “In an industry where media is going over the top, we now have a need for global content strategies—content is produced on one end of the world and watched on the other.”
For instance, there are more NBA fans outside of the U.S. (mostly in China), than there are inside. By the same token, plenty of Indian, Mandarin and Spanish content is consumed stateside.
“So globalization, nonlinear, windowing going away—all of this means that it’s about accessing any content, any time, on any devices,” Salgame said. “So we invested in building a video distribution network to broadcast video over fiber as an alternate efficient HD transmission means instead of satellite.”
And finally, on the mobile front, new research has forecast that mobile data traffic, generated by smartphones, feature phones and tablets, will approach almost 197,000 Petabytes by 2019, equivalent to over 10 billion Blu-ray movies.
According to Juniper Research, video traffic over smartphones will increase by nearly eight times between 2014 and 2019. Video currently accounts for around 60 percent of global IP traffic and, in some developed markets, this proportion is likely to exceed 70 percent in two to three years.
“Certainly, video is forming an ever-greater proportion of network traffic,” said research author Nitin Bhas.
The research also estimates that the average monthly data usage by smartphone and tablet users will double over the next four years. And, the daily media consumption by mobile users will continue to rise, bolstered by the rise in 4G adoption and factors such as HD video usage.
In 2014, data traffic generated by smartphones, feature phones and tablets in the Far East and China exceeded that of North America for the first time.
But, don’t look for all that traffic to break mobile networks—wireline will have to pick up the demand here too. Only 41 percent of the data generated by these devices will be carried over cellular networks by 2019, with the majority of mobile data traffic offloaded to Wi-Fi networks, Juniper said.
Overall, wholesale partnerships will continue to be a critical part of the video transmission ecosystem as more and more innovation drives the marketplace forward.
“Operators are looking at 4K Ultra HD, at new types of augmented reality and 3D cameras and at other types of content, while they’re coming to grips with the next generation of opportunities,” Salgame said. “The question is, how do I capitalize on this, and how do I create value for myself and my customers beyond access. This is a fundamental shift that we’re enabling for our partners.”
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