CDN Video Traffic Update: Higher Demand for VOD Content and Software Downloads, Offset By Loss Of Live Sports

Over the past week I’ve spoken to nearly every major CDN, many ISPs, as well as dozens of content owners to get an accurate sense of the traffic growth they are seeing for live and on-demand video streaming. Based on those I talked to, overall traffic growth specific to video on third-party CDN networks was up between 12%-20% in March, when compared to February. Video on demand traffic and game downloads are up, as one would expect, but overall video traffic growth isn’t higher as some might think, due to the loss of live sports.

While the media is quick to use all kinds of numbers when talking about the growth of streaming, use cases like video conferencing and multiplayer gaming has little to no impact on the CDNs. It’s important to know which services use third-party CDNs, what technology they are using and which online services deliver a lot of the content themselves.

Zoom and other web collaboration services are designed as one-to-few solutions, not one to many, like webcasting based offerings that use streaming media technology. The majority of services like Zoom don’t use CDNs to deliver their video. Sometimes they rely on third-party CDNs for the caching and acceleration of APIs or other pieces of content that are very small in size, but that doesn’t drive much in the way of additional traffic to CDNs. [Side note, this morning Zoom said it’s daily meeting participants went from 10M in December to 200M in March.] And when it comes to multiplayer gaming, third-party CDNs don’t deliver any of that video. None of that video goes across their network.

CDNs do deliver software downloads of games like Fortnite and Call Of Duty and CDNs are seeing a big growth in that traffic. To put it in perspective, a two-hour movie streamed at 4.5Mbps takes up just over 4GB of data. The last COD update on the PS4 in February was 51GB in size, the one before that was 53GB in size, and the COD 1.18 update that rolled out on March 27th was 11.5GB in size. The last three updates combined were over 115GB of data, for just one game. That’s equivalent to watching 29 movies, at two hours each, encoded at 4.5Mbps. This is why when CDNs like Akamai and others report earnings they always mention that “software downloads” was the big driver in the media vertical.

This isn’t to say that third-party CDNs deliver all of these game downloads. Many ISPs utilize virtual servers from the game companies/platforms to help deliver the content inside their networks, but some third-party CDNs certainly do benefit. It should be noted though, this is not “video” traffic, it’s software. So for all the media reports saying “streaming” is the biggest driver of growth for CDNs, many times that’s not accurate. “Gaming” is a use case, it’s not a “type” of delivery. Talking to ISPs in the U.S., March 10th was the largest day of traffic on their networks so far, even surpassing any traffic they have seen since then. ISPs told me that Xbox One and PS4 game download traffic was up “40%” on average that day, with one ISP saying the traffic was up “62%” on the 12th.

When it comes to video streaming, traffic is up across all of the third-party CDNs I spoke with, but it’s not up by that much, due to the loss of live sports streaming. More people are watching video during the day, both VOD movies and TV shows as well as live news, but the traffic at night looks similar to a month ago. I’ve seen some reports that talk about the peak hour of usage on ISP networks, but that’s talking about all traffic on their network, not just video streaming. For video streaming, the peak hours are 7pm-11pm Eastern Time and Sunday night is the busiest night of the week. CDNs I spoke with told me that a week ago, Sunday night traffic was up, but not by much. ISPs I spoke with said traffic was up 7%-10% on average, specific to streaming.

Some have suggested that the launch of Disney+ in Europe will be a large surge of traffic for the many third-party CDNs that Disney is using, but that new traffic for Disney’s service was already baked into CDNs projections for “new” traffic growth in March and April. So while that is new traffic, it’s not traffic that’s specifically being generated by what’s currently going on in the world. I’ve seen numbers saying that video streaming was up anywhere between 26%-80% in March, but note that a lot of the growth, whatever the accurate number is, comes from Netflix and other services that deliver most, and in some cases like Netflix, all of the video themselves. So while usage is up for Netflix and others, third-party CDNs don’t benefit financially from that growth.

According to Nielsen, (who’s data should not be quoted as the Bible as it’s missing a lot of measurements), Netflix and YouTube made up 49% of all content streamed to TVs the week of March 16th. Even if their numbers are off a bit, it’s safe to say we all know that Netflix and YouTube combined, usually take up about 50% of viewing hours or more. And 100% of that video traffic is delivered by Netflix and Google themselves. So when the media throws out all kinds of numbers around how fast video is growing, for those tracking the CDN market, it’s important to note that the growth of DIY companies usually has little to no impact on the revenue growth of third-party CDNs. The key is too look at the growth of video services from Hulu, ESPN+, Disney+, CBS All Access, Showtime, Sling TV, Fubo and many others who rely on third-party CDNs. Although some, like Disney and others, are already building out their own DIY efforts.

So what does this mean for third-party CDNs in 2020 from a business growth standpoint? Overall, the CDNs will see some nice traffic growth from new services launching like Disney+, Quibi, Peacock and consumers signing up for other already established OTT services. They will also benefit from larger game downloads but it should be noted that game developers have already said that these downloads will get smaller going forward. As an example, see this thread from Infinity Ward that talks to their intentions to “keep future updates from being this large” and to “minimize” their size. This follows in the footsteps of Apple and many others who have continued to cut their size of their software updates by a big percentage every year.

The downside for third-party CDNs is that live sports streaming on the Internet doesn’t exist and we have no real indication of when it might start again. None of the CDNs I spoke with said they had enough details yet to know what the impact would be to their business over the course of the year. How quickly sports comes back, and which leagues don’t, is anyone’s guess. If live sports don’t come back until Q4, the CDNs will have missed two quarters of live sports streaming traffic, which will impact the growth of their overall revenue numbers. I’m not saying they won’t grow at all, they will, but the rate of growth is what’s in question. The loss of some live sports traffic will be able to be made up in the form of additional traffic from VOD movies and TV shows, but live streaming of sports typically happens at a higher bitrate and users watch for longer periods of time, both of which contribute to more GBs delivered overall. I’ve seen a few people say things like, “the loss of real-time video delivery will be more than offset by increased traffic in VOD,” but that is NOT guaranteed at all and there is no data to back that up.

The other unknown is when people go back to work, which OTT services could get delayed in their launch and what the world looks like in another month or two. The delaying of the Olympics isn’t a big deal for any CDN, as it won’t have a material impact on their company from a revenue standpoint. Some CDNs I spoke with also suggested another potential scenario. When people do go back to work and things start to try and get back to some normality, many people will want to do more outside, spend time seeing others, visit places they haven’t been able to get to and potentially, spend less time in front of their TV. So some of the growth we are seeing now may not spill over into future months and the usual traffic they see on their network when things are back open, may have a lot more peaks and valleys and more unpredictability. There are bunch of unknowns right now, but the good news is, CDNs will benefit from the increased demand for video streaming, the question none of us yet know, is what that demand will look like for the rest of the year.

Side note: I just completed my media CDN pricing survey for Q1 2020. Please contact me if you’d like details on how you can get access to the raw data, minus customer names.

Starz President and CEO to Conduct Fireside Chat at NAB Show Streaming Summit

I’m pleased to announce that Starz President and CEO Jeffrey Hirsch will sit down with me for a fireside chat at the NAB Show Streaming Summit in April. We’ll discuss the premium cabler’s transition to the digital world through OTT and mobile apps, the priorities and insights on how a platform strategizes its domestic and international expansion, from the diversification in meeting subscribers/viewers to data and analytics on what makes specific content successful.

Registration is open and you can get a discounted pass for $695, if you register before March 22nd. If buying 3 or more tickets, contact me for a group discount code. #streamingsummit

First Streaming Summit Keynote Announced: Jeremy Legg, CTO, WarnerMedia

I’m excited to announce the first keynote for the NAB Show Streaming Summit, taking place April 20-21. Jeremy Legg, CTO, WarnerMedia will discuss his experience with building a streaming video platform in the ever-evolving media landscape, industry trends, the importance of user experience, future proofing, and predictions in media. Full conference program will be live next week! #streamingsummit

Live Updates: Testing Super Bowl Stream Across a Combo of 50+ Apps/Platforms

10:47pm ET: And that’s a wrap! Congrats to the FOX Sports team for a great overall Super Bowl streaming experience. Very minor issues, as is the case with all live events online. Interested to see the numbers tomorrow, I’m guessing 3-3.5M simultaneous.

8:30pm ET: So far on the iPad/iPhone, the Super Bowl stream is looking great on the Hulu, Fubo TV and FOX Sports app with startup times of around a second, on WiFi. 4G still good, with startup of about 3 seconds.

8:17pm ET: The Sling TV Super Bowl stream on iPad gives me a message of “NFL Football is not currently available”, yet it shows it as an option for viewing. Don’t know if it’s a local blackout issue, but problem currently unknown. Update 8:58pm ET. I have restarted the iPad and now the Sling TV stream is working.

7:09pm ET: The Super Bowl stream is looking good so far on Fubo and DAZN on Roku, Apple TV, Amazon and Fire TV. Fubo won’t let me get the 4K stream though, message says my LG OLED TV doesn’t support it, which it does.

6:58pm ET: You can also use the NFL app to stream the Super Bowl, there is an option to skip authenticating or signing up for an account. Streams looks good, but it’s not the 4K version.

6:55pm ET: At kickoff the Super Bowl stream is looking good on FOX Sports, Hulu and Sling TV on Roku, Apple TV, Amazon and Fire TV. I’m seeing latency of 12-25 seconds. But sound volume is all over the place. Hulu on Roku I have to turn my TV up to 50, FOX on Roku only 20.

6:19pm ET: If you want the 4K stream of the Super Bowl it’s only on Amazon Fire TV and Roku in UHD/HDR and AppleTV 4K in UHD/SDR. (Apple does not support HDR @ 60fps). So no 4K on Xbox or PS4.

4:08pm ET: I expect the Super Bowl stream to have a delay when compared to cable TV of anywhere between 10 seconds to 60 seconds depending on the device/platform. And for all those that will complain, it’s not a big deal, it’s a free stream. Latency is not a big deal, until betting happens.

3:27pm ET: FOX Sports says the Super Bowl HD stream will max out at about 7.5Mbps and 20Mbps for UHD. No international broadcasters are taking the 4K feed, FOX Sports has rights for U.S. and Territories only. 

3:20pm ET: If you have any Super Bowl streaming issues with the video or apps please put them in the comments on this post (or email me dan@danrayburn.com) and I’ll send directly to FOX Sports tech team. Make sure you update the device OS and then update whatever app(s) you’re using. Most problems can be fixed simply by doing that. In your comments put ALL details; device, model number, device OS, app, app version, internet connection.

2:40pm ET: I’m running Charles to take a look at how the Super Bowl streams are being delivered, which looks to be across third-party CDNs including Fastly, Verizon Media, Akamai and Limelight Networks. [Updated: Amazon Cloudfront as well] Feel free to send me any logs or traceroutes if you like. FOX Sports looks to be ready.

2:30pm ET: Here’s what the 4K badging will look like for the 4K stream. Select that option if you have at least 25Mbps and your TV and streaming hardware supports 4K.

2:27pm ET: I’ll be testing the Super Bowl stream across 50+ apps/platform combo on Apple TV, Roku, Xbox, PS4, Fire TV, iPad, iPhone, Samsung Galaxy Tab, smart TVs from LG, Vizio and Samsung. Follow this blog post for updates. Below is my setup so far with more to come.

  • Connection: Verizon FiOS currently getting 77Mbps down.
  • MacBook Pro (Mid 2015)
    OS 10.13.6
    Safari Version 13.0.5 (13608.5.12)

Running all latest apps from FOX, Sling TV, Hulu, Fubo, YouTube, DAZN and AT&T on these phones/tablets:

  • iPad 10.2” (2019)
  • iPhone 11 Pro (2019)
  • Samsung Galaxy Tab A 10.5″ (2019)

Here’s the specs for the TVs and streaming boxes: (more to come)

  • LG 55” TV 4K (Model OLED55C9AUA)
    Software Version 4.71.05
    FOX Sports App (not available)
    Sling TV App 2.8.34 Player Version 5.4.2
    Hulu Live App 6.5.9
    Fubo TV App (not available)
    YouTube Live App 1.0.22
    DAZN App 2.50.8
    AT&T TV Now App (not available)
  • Amazon Fire TV Stick 4K (Model E9L29Y)
    Software Version OS 6.2.6.8 (NS6268/2315)
    FOX Sports App v3.23.20 (15140) Prod
    Sling TV App 5.4.7.266 Player Version 6.17.9
    Hulu Live App 97EAA109P3.6.203
    Fubo TV App 4.23.1
    YouTube Live App 1.5.64.0
    DAZN App 1.63.2
    AT&T TV Now App 3.0.20202.02122
  • Apple TV 4K (Model A1842)
    Software Version 13.3.1 (17K795)
    FOX Sports App 3.23.2
    Sling TV App 3.0.1.115 Player Version 5.4.0.101
    Hulu Live App 828 Build 42
    Fubo TV App 4.3.2
    YouTube Live App 1.5.0
    DAZN App 2.2.1
    AT&T TV Now App 1.0.0 Build 1
  • Roku Ultra 4K (Model 4670X)
    Software Version 9.2.0 (4807)
    FOX Sports App 3.23 Build 12658
    Sling TV App 6.7 Build 215
    Hulu Live App 6.25.4
    Fubo TV App 3.8 Build 2001211353
    YouTube Live App 1.0 Build 91000019
    DAZN App 3.0
    AT&T TV Now App (not available)

UPDATED: Verizon Ditches Cable Bundles and Contracts, Offers New “Mix & Match” Options With No Surcharges and Sports Network Fees for NEW Customers Only

[Updated Jan 11th: While not mentioned by Verizon, if you are a current Verizon customer you can’t make any changes to your account via phone. You have to use the Verizon website, which is HORRIBLE and tries to add new set-top-boxes and even assign me a new phone number, when I already one. You also can’t continue to use cable cards, which isn’t mentioned anywhere. The press release also says there are no fees on top of the costs, other than tax, but they are fees still for each cable box and for a router.]

Thanks to the impact of all the OTT services in the market and the number of options consumers have for getting their video fix, Verizon announced they are doing away with FiOS bundles and contracts, and allowing customers to pick and choose options for TV, internet and phone.

As a current customer of Verizon’s triple-play bundle for FiOS, I pay $109 a month, before taxes and fees. Under the new plan, I would pay $110 a month before taxes and fees. So initially the pricing is the same with no savings. But Verizon has also announced that all of the new “Mix & Match” options have “no added surcharges, no broadcast or regional sports network fees.” Verizon will charge only state and local tax on top of the new options. Removal of all the surcharges and sports network fees would save me $31.38 per month. And if you also happen to be Verizon Wireless customer, there is also an option to save $10 or $20 per month, depending on your plan, by joining Verizon’s Mobile+Home Rewards program.

Under the new “Mix & Match” options, customers can pick from 100 Mbps, 300 Mbps or Gigabit internet, costing from $39.99 per month up to $79.99 per month. TV options include $50 per month for 125+ channels, $70 per month for 300+ channels or $70 per month for 425+ channels. You can also add a landline for $20 a month.

Verizon is also offering a YouTube TV option for $50 a month. So if you wanted live TV via streaming, plus 100Mbps Internet connection, your cost would be $90 a month, before taxes. Note though that YouTube TV has a limit of 3 simultaneous streams from one account, so if a family of 3 or more all needs to watch content at the same time, you’d run into a limitation.

Verizon’s change towards triple-play bundling is just another example of how OTT continues to disrupt the pay TV market and provide more options for consumers. While the flexibility and no contract tie in is a good thing, for those not taking pay TV to begin with, Verizon’s news doesn’t lower their costs. And as most live streaming services continue to raise pricing each year, don’t expect OTT services to go down in price at any point. Content is expensive to license and produce, so we should expect to see additional price increases ahead.