Level 3 Comments On The Future Of HTTP Based Streaming

Over on the StreamingMedia.com discussion lists, a big debate has been raging over whether or not HTTP based streaming and services like Smooth Streaming are cheaper for content delivery networks to deploy. Earlier in the week I wrote a post saying that today, it's not cheaper to deploy and for content owners, doesn't cost them any less than other forms of delivery. With both Microsoft and Apple making a strong push for HTTP based streaming and Adobe hinting since the beginning of the year that they will provide support for it before too long, there's no question that HTTP based streaming will play a big
role in the future of video delivery.

While I spoke to a couple of CDNs about their HTTP deployments for both Apple and Microsoft's platforms, Level 3 was willing to give out some additional details for the blog and I did a quick Q&A with Mark Taylor, the Head of Media Product and Strategy at Level 3. Here are his thoughts on HTTP based streaming and some of the positive signs Level 3 is seeing with their deployments.

Question: Is HTTP based streaming cheaper for Level 3 to deploy and manage today when compared to FMS and WMS services?

Yes. There are three areas where it is more cost effective for a CDN.

Firstly, we have no software integration on any of our edge servers with the new HTTP streaming solutions. For significant new versions of proprietary streaming protocols, that do not use HTTP, this integration is a significant amount of work for our development teams. We effectively have to fold the new technology into our own ecosystem. There are a lot of things we have to build to turn the streaming vendor's code, a framework really, into a functional service. And even when we have the code built we have to go through rigorous regression testing before we can roll it out onto the thousands of servers throughout our network – we clearly have to be completely satisfied that no existing customers will be impacted negatively. Contrast that with the new HTTP-based streaming technologies where we need do almost nothing; maybe a few tweaks to our existing caching code in order to improve efficiency. And of course nearly every time there is a new feature or a code upgrade we need to go through the same cycle again.

Secondly, it is simpler and more efficient for our operational teams to manage. There is less complexity and we don't need to build any new management tools. Managing one technology is clearly easier than managing many technologies that all essentially do the same thing.

Thirdly, CDNs do not pay any traffic/bandwidth/volume related fees to the HTTP streaming software vendors.

Question: Do you envision being able to offer customers a lower price for HTTP based streaming services in the future?

As online video continues to grow towards TV sized audiences, we need to be in a position to provide an incredibly scalable and highly efficient infrastructure. For all the reasons mentioned above, we believe that HTTP delivery offers the best path for that. Being able to concentrate our own R&D efforts on continuing to reduce the cost of bit delivery, without being distracted by deployments of other code, is important. Being able to have the most effective and efficient operational team with extraordinarily deep technical expertise is also important. However, the whole industry has lived for many years with competing technologies. Right now we are not planning to differentiate our pricing. But we will lobby hard for the entire industry to embrace what we think is the best delivery technology for all of us. And at some point, it may become necessary, or someone may want to exploit the difference in cost as a differentiator, so it will be something that we continue to monitor closely.

Question: HTTP based streaming takes a lot of the guesswork out of a CDN trying to figure out what percentage of proprietary streaming servers to deploy on their network. What direct impact does that have on a CDN's cost?

It's all about efficiency. Having, say, 10,000 servers "worth" of capacity in a CDN network capable of delivering any bit for any customer is the most efficient approach to capacity management. In that environment you can develop tools that track usage growth across your network and augment appropriately when needed. It's a science we know well as a network operator – this sort of simplicity was part of the reason IP replaced many other networking technologies at the core of our network. Contrast that with having those same 10,000 servers worth of capacity sub-divided into six different delivery technologies. Firstly, the pool of capacity for each individual technology just got cut dramatically. But your capacity planning just got a whole lot harder. Now you also have to deal with the complexity of changes between technologies. This isn't simply a traffic management issue any more. It becomes a market adoption issue, a battle between competing technologies that we need to monitor and forecast. So, it is more expensive for us. But also traffic spikes or events are harder to deal with which leads to potential difficulties for our customers. If it was a trivial matter to re-purpose servers, from one delivery technology to another, then dealing with those spikes would be easier. But it isn't trivial.

Question: What demand are you seeing for HTTP based streaming services and how educated are content owners with the pros and cons of each?

We are seeing huge demand for adaptive bit rate technologies in general NOT just the HTTP based ones. Media companies are excited about the potential for improved quality and end user experience that adaptive bit rates offer. Their driver isn't necessarily related to the actual delivery technology in most cases. However, the biggest media companies do recognize all of the issues I mentioned above. Because, don't forget, they have to build it themselves as well. CDNs rarely deliver 100% of anybody's traffic. So while our customers may not experience the issues to the degree the very largest CDNs do, they are well aware of them.

Question: What's needed in the market for content owners to adopt HTTP streaming in greater numbers? Do they understand the total cost of ownership?

They need to experience that ease of set up and ongoing management for themselves. Our experience has been dramatic. We were up and running with the two newest HTTP streaming technologies in weeks. It takes months for a large CDN operator to set up an equivalent non-HTTP solution. But, I think this is well understood by all the software vendors in the industry. I believe it will evolve there anyway, within the next 12-24 months, without the content owners making any explicit technology choice.

Question: Delivering reporting based on HTTP streaming is much more difficult since the streams are based on chunked encoding. How will CDNs manage that change?

This is a very good question. And this explains why we just re-engineered our content analytics and reporting platform. We expected a massive increase in the volume of data that we would have to collect, collate and make available to our customers – so we built that on a completely new platform. What we are now doing is collaborating with our customers and the software vendors to figure out how best to make this data available to them – how best to present it and mine through it. We don't want to overwhelm our customers with that data. But we need to understand clearly what business decisions our customers are making with that data. This is so new that we are all still working that through. But it is an incredibly vital part of this change in our industry. We may have a more efficient technology for the CDNs. We may have a far better user experience for our customers end users. But we also need to ensure we can manage our network and that our customers can make appropriately informed business decisions that enable them to be as profitable as they can be. Reporting is central to that.

Question: MBR and HTTP based streaming is all suppose to be about delivering better video quality at a cheaper price. Will this enable content owners to truly make more money from their content over time?

It is certainly a part of enabling them to do so. And it is extremely important and probably long overdue. But at least as important, if not more so, are advertising technologies and advertising work flows. The potential exists for far higher quality advertising. Different forms of advertising. Better targeting of advertising. Better campaign management across online and other forms of advertising. All these things are aimed at increasing CPMs (or whatever form of measurement you want to use for ad dollars) for on line advertising. Advertising effectiveness needs to improve significantly before we reach the TV audience sizes online I mentioned at the start.