In September, MUSO, a London based company that collects data from billions of piracy infringements every day, scanned the highest trafficked 250 global piracy sites and found that 82% of the piracy traffic is being proxied through Cloudflare. This is an astonishing number and when compared to other network providers, no other provider had over a 2% share.

For those that track the network provider space these findings probably aren’t too surprising since Cloudflare has a history of allowing piracy sites, along with terrorist organizations, to use their services. The disappointing news is that MUSO routinely informs Cloudflare about copyright infringing content on these sites, but doesn’t see them shutting off the websites. This is a clear violation of the first clause in Cloudflare’s AUP which states, “By agreeing to these Terms, you represent and warrant to us… (iii) that your use of the Websites and Online Services is in compliance with any and all applicable laws and regulations.”

MUSO says other network providers like AWS and Microsoft act on notifications and takedown requests and remove sites from their service resulting in MUSO only seeing a small number of piracy sites on other these providers. In fact, the numbers are so small that AWS and Microsoft fall under the “other” bucket on the list, below 0.6% of all piracy traffic. If you want to see a snapshot of the top 25 piracy sites from MUSO, you can see them here.

For clarity on the methodology, MUSO took the top 250 highest trafficked piracy sites in September 2021, which represent 40% of global piracy traffic. They look up the network provider for each site, group them by traffic and then look at the volume. These figures don’t measure the piracy streams and downloads of the content within these sites, they reflect the traffic to the sites themselves. MUSO’s digital content database covers 196 countries, millions of measured devices and billions of piracy pages continuously tracked and is used by clients including Sony, AMC, Bloomberg and many others in the broadcast, publishing, film and software industries.

Based on the data, there’s a very clear pattern here. Cloudflare has a huge share of traffic from the top 250 global piracy sites running through its network and benefits financially as a result. There is no way to know how much revenue they make from these piracy sites, but with such a large share of traffic, it’s substantial.

As content providers strive to make the streaming viewer experience more personalized and friction-free, the role of API-enabled microservices is growing rapidly. But, just like the complex interactions that occur under the hood of your car, many probably don’t think much about the APIs that make feature-rich services possible. After all, they just work, until they don’t. And it doesn’t take much to frustrate subscribers who can switch to another provider with the click of their remote or a command to Alexa or Siri. Without APIs, streaming media services would not exist. There are three broad phases of a typical streaming media experience where APIs are essential:

• Phase 1 – Login and selection: When the viewer opens the app, their saved credentials are checked against a subscriber database and they are automatically authenticated. Information stored in their user profile is then fetched, allowing the app to present a personalized carousel of content based on the subscriber’s viewing history and preferences, including new releases and series the viewer is watching or has watched recently. This involves a recommendation engine responsible for delivering the thumbnail images of recommended content for the subscriber. APIs must accomplish all of this in seconds.
• Phase 2 – Initiating playback: Once the subscriber has selected their content and pressed “play,” a manifest request is generated, providing a playlist for accessing the content. This may involve interactions with licensing databases and/or advertising platforms for freemium content, all handled by APIs.
• Phase 3 – Viewing experience: During playback, APIs manage multiple aspects of the experience, including serving up ads. In some cases, these ads may be personalized for the subscriber, requiring a profile lookup. If the subscriber decides to switch platforms midstream—say from their big-screen TV to their tablet—APIs come into play to make that transition seamless, so the content picks up right where it paused on the other platform.

API calls are occurring throughout playback, tracking streaming QoS to optimize performance given the subscriber’s bandwidth, network traffic and other conditions. Additional information, such as whether the subscriber watched the entire movie or bailed out partway through, may be delivered back to their profile to further refine their preferences (Most content providers only count a program “watched” once the subscriber has reached some percentage of completion). That’s just a high-level view—in practice, there may be hundreds or thousands of API interactions, each of which must occur in milliseconds to make this complex chain of events happen seamlessly. If just one of these interactions breaks down, the user experience can quickly go from streaming to screaming.

With APIs being so critical to the user experience there are many potential points of failure. The wrong profile may be loaded. The recommendation engine may not serve up the suggested content thumbnails. The manifest request could fail, triggering the dreaded “spinning wheel of death,” preventing content from loading. Ads may hang up, disrupting or even blocking playback completely. Some of these API failures are merely annoying—but others are in the critical path, preventing content delivery.

In addition to APIs essential for playback functions—manifest calls, beaconing for QoS, personalization, etc.—other APIs play crucial roles for business intelligence. APIs that gather data on user engagement, such as percentage of completion of content, are important for analytics that inform critical decisions impacting content development budgets and advertiser negotiations. This data is also used for subscriber interactions outside the platform, such as email touches to encourage subscribers to continue watching a series or alert them to new content matching their preferences. Continually keeping a finger on the pulse of subscriber behavior is crucial for business decisions that create a sticky service that builds subscriber loyalty. APIs make it possible.

Given the role APIs play, ensuring their performance, reliability and security should be a priority for streaming media providers. The first step is recognizing their importance and understanding which APIs are in the critical path. These may need a higher degree of protection, such as having backups for them. Delivering critical APIs from the edge, from endpoints closer to the subscriber, can also help maximize both their reliability and their performance. Another good practice is keeping your APIs on separate hostnames from your content (api.domain vs. domain/api), allowing each to be tuned for optimum performance and reliability. Making sure your content delivery network has robust security features is also important, as APIs are an increasingly common vector for cyberattacks, which is why you are seeing more CDN vendors offering API protection services.

With consumers demanding a continuous supply of new streaming features and capabilities, APIs will only become more numerous and more critical to business success. So it only makes sense to pay as close attention to how your APIs are architected and delivered as you do to your content.

Since AT&T closed its purchase of Time Warner, Viacom merged with CBS, Disney acquired Fox’s studio and key cable networks, Discovery took over Scripps Networks and Amazon looking to acquire MGM, content consolidation has been the main focus in the industry. With so many OTT services for consumers to pick from, alongside multiple monetization models (AVOD, SVOD, Free, Hybrid), fragmentation in the market will only continue to grow. We all know that content is king and is the most important element in a streaming media service. But with so many OTT services all having such a good section of content, the next phase of the OTT industry will be all about the differentiation of quality and experience amongst the services and the direct impact this has on churn and retention.

The fight for eyeballs will be primarily fought over the quality of the user experience, and each of these consolidated players will now own a rich and diversified content portfolio. This can suit all sorts of business models such as everything to everyone or more niche targeted content for specific audiences. CEOs of these OTT services and most of the media, tend to focus on the volume of subscribers. For example, Discovery CEO David Zaslav told CNBC recently “There’s billions of people out there that we could reach in the market.” Most of the attention has focused on how the Discovery-WarnerMedia deal could reach 400M subscribers, Netflix growing beyond its 200M+ global subscribers or Amazon Prime beyond its 175M. Many are multiplying number of subs per month, x ARPU, x total households in a region and huge numbers start popping out and rousing the financial markets.

However, these numbers being quoted aren’t truly representative of the real opportunity in the market. I would argue that combining companies, brands and content on excel sheets is a far cry from effectively reaching out to billions of potential customers with a high QoE needed to keep them from jumping to a competitive service. Whilst secondary to content, streaming services need to keep a keen eye on their technology and what competitive advantages they can offer to reduce churn. One such differentiation for some is the volume of content they are offering with support for HDR. By deploying HDR capabilities, media companies could impress their audiences with a richer breadth of color and deeper contrast within HD content, which is still viewed far more than 4K content. Amongst third-party content delivery networks, many tell me of all the video bits the deliver, less than 5% are in 4K. This makes HDR even more important to support within HD content.

HDR has been on the roadmap for a lot of content owners but historically has been held back largely due to device support. Rendering performance of HDR formats is different on devices, backward compatibility is a mess, APIs are pretty bad and content licensing agreements sometimes allow only for a specific HDR format. While HDR has been a struggle over the last few years, we are finally starting to see some faster adoption amongst streaming media services. For example, last month, Hulu added HDR support to certain shows and movies within its streaming catalog. Most streaming platforms now offer a portion of their video catalog with HDR support and thankfully most TV sets sold are now HDR ready thanks to support for the HEVC codec. But whilst consumption on smart TVs is significant, HDR is largely excluded from consumption on laptops, tablets, and mobile phones. And that is where you will find the ‘billions of people’ mentioned before. For many of us, our phones and tablets have the most advanced and capable displays that we own, so why restrict HDR delivery to the Smart TV?

Contrary to popular belief, HDR is achievable on 1080p and independently of HEVC with MPEG-5 LCEVC, as I previously detailed in a blog post here. LCEVC can add a 10 bit enhancement layer to any underlying codec including AVC/H.264 thus providing the possibility to upgrade all AVC/H.264 streaming and make it HDR capable, without the need for HEVC. LCEVC is deployable via a software upgrade and therefore quick rollouts could take place, rather than the usual years needed to get hardware updates into a meaningful number of devices. The opportunity to drive up user engagement and ARPU with premium HDR delivery to more of our devices could be a key advantage for one or more of the OTT services in our space. I predict that over the next two years, we’re going to see some of the fastest rate of HDR adoption across all streaming media services and we should keep an eye on what measurable impact this can have on the user experience.

Kaleil Isaza Tuzman, the former CEO of KIT Digital who was found guilty of market manipulation, wire fraud, defrauding shareholders, and accounting fraud was sentenced on September 10th to three years probation by the judge in the case. This is astonishing as the prosecutors had sought a sentencing of 17-1/2 to 22 years in prison. The judge also ordered three years of supervised release.

U.S. District Judge Paul Gardephe sentenced Kaleil to only probation, saying the 10 months Kaleil spent in Colombian prisons was so horrible it would put him at little risk of committing further crimes. “The risk associated with sending Mr. Tuzman back to prison, the risk to his mental health, is just too great,” Gardephe said. “While in many other cases it has been my practice to sentence white-collar defendants for these sorts of crimes to a substantial sentence, in good conscience I can’t do that here.”

It’s sad state of affairs in our legal system when someone who defrauded investors, lied, cost many employees to lose their jobs and was found guilty on every charge, gets probation. Reading through some of the legal filings, there appears to be more to the story though on what might have impacted his sentence. In a Supplemental Sentencing Memorandum filed on July 7th of this year, it says:

“While incarcerated and during the five years since his release from prison, Kaleil has repeatedly provided material and substantial assistance to the Anti-Corruption Unit of the Colombian Attorney General’s Office, which ultimately resulted in the indictment of a number of government officials in the Colombian National Prison Institute known as “INPEC” (Instituto Nacional Penitenciario y Carcelario)—including the prior warden of La Picota prison, César Augusto Ceballos—on dozens of charges of extortion, assault and murder.” So one wonders if he got a lighter sentence due to information he was providing to the Colombian government.

On the civil side, Kaleil is still being sued by investors in a hotel project who accuse him of stealing $5.4 million and in May 2021, a similar suit was filed in U.S. federal court, asking for $6 million.

For a history of what went on on KIT Digital, you see read my post here from 2013, “Insiders Detail Accounting Irregularities At KIT Digital, Rumors Of A Possible SEC Fraud Investigation“.

Right now, almost anyone has access to some sort of video streaming platform that offers the content they value at a satisfactory video quality level, most of the time. But the novelty factor has long worn off and most of the technical improvements are now taken for granted. Of course viewers are increasingly demanding in terms of video quality and absence of buffering, and losing a percentage of viewership due to poor quality means more lost profits than before, but consumers are starting to care about more than just the basics.

Just like in many other industries (think of the car or fashion industries) consumer demands – especially for Generation Z – are now moving beyond “directly observable” features and sustainability is steadily climbing the pecking order of their concerns. To date, this importance has mostly been for physical goods, not digital, but I wonder whether this may be a blind-spot for many in our industry? Remember how many people thought consumers would not care much about where and how their shoes were made? Some large footwear companies sustained heavy losses due to that wrong assumption.

Video streaming businesses should be quick to acknowledge that, whether they like it or not, whether they believe in global warming or not, that they have to have a plan to reach the goal of net-zero emissions. The relevance of this to financial markets and customer concerns about sustainable practices are here to stay and growing. About half of new capital issues in financial markets are being linked to ESG targets (Environmental, Social and Governance). Sustainability consistently ranks among the top 5 concerns in every survey of Generation Z consumers when it comes to physical goods and one could argue it’s only a matter of time before this applies to digital services as well.

Back in 2018 I posted that the growth in demand for video streaming had created a capacity gap and that building more and more data centers, plus stacking them with servers was not a sustainable solution. Likewise, encoding and compression technology has been plagued with diminishing gains for some time, where for each new generation of codec, the increase in compute power they require is far greater than the compression efficiency benefits they deliver. Combine that with the exponential growth of video services, the move from SD to HD to 4K, the increase in bit depth for HDR, the dawn of immersive media, and you have a recipe for everything-but-net-zero.

So, what can be done to mitigate the carbon footprint of an activity that is growing exponentially by 40% per year and promises to transmit more pixels at higher bitrates crunched with more power-hungry codecs? Recently Netflix has pledged to be carbon neutral by 2022, while media companies like Sky committed to become net zero carbon by 2030. A commonly adopted framework is the “Reduce – Retain – Remove”. While many companies accept that they have a duty to “clean up the mess” after polluting, I believe the biggest impact lies in reducing emissions in the first place.

Netflix, on the “Reduce” part of their pledge, aim to reduce emissions by 45% by 2030 and others will surely follow with similar targets. The question is how can they get there? Digital services are starting to review their technology choices to factor-in what can be done to reduce emissions. At the forefront of this should be video compression, which typically drives the two most energy intensive processes in a video delivery workflow: transcoding and delivery.

The trade-off with the latest video compression codecs is that while they increase compression efficiency and reduce energy costs in data transmission (sadly, only for the small fraction of new devices compatible with them), their much-higher compute results in increased energy usage for encoding. So the net balance in terms of sustainability is not a slam dunk, especially for operators that deliver video to consumer-owned-and-managed devices such as mobile devices.

One notable option able to improve both video quality and sustainability is MPEG-5 LCEVC, the low-complexity codec-agnostic enhancement recently standardized by MPEG. LCEVC increases the speed at which encoding is done by up to 3x, therefore decreasing electricity consumption in data center. At the same time, it reduces transmission requirements, and immediately does so for a broad portion of the audience, thanks to the possibility of deploying LCEVC to a large number of existing devices, and notably all mobile devices. With some help from the main ecosystem players, LCEVC device coverage may become nearly universal very rapidly.

LCEVC is just one of the available technologies with so-called “negative green premium”, good for the business and good for the environment. Sustainability-enhancing technologies, which earlier may have been fighting for attention among a long list of second-priority profit-optimization interventions, may soon bubble up in priority. The need for sustainability intervention is real, and will only become greater in the next few years, so all available solutions should be brought into play. Netflix says it best from their 2020 ESG report, “If we are to succeed in entertaining the world, we need a habitable, stable world to entertain.”

In a previous blog post, [Unpacking the Edge Compute Hype: What It Really Is and Why It’s Important] I discussed what edge computing is—and what it is not. Edge computing offers the ability to run applications closer to users, dramatically reducing latency and network congestion, providing a better, more consistent user experience. Growing consumer demand for personalized, high-touch experiences is driving the need for running application functionality to the edge. But that doesn’t mean edge compute is right for every use case.

There are some notable limitations and challenges to be aware of and many industry analysts are predicting every type of workload will move to the edge, which is not accurate. Edge compute requires a microservices architecture that doesn’t rely on monolithic code. The edge is a new destination for code, so best practices and operational standards are not yet well defined or well understood.

Edge compute also presents some unique challenges around performance, security and reliability. Many microservices require response times in the tens of milliseconds, requiring extremely low latency. Yet providing sophisticated user personalization consumes compute cycles, potentially impacting performance. With edge computing services, there is a trade-off between performance and personalization.

Microservices also rely heavily on APIs, which are a common attack vector for cybercriminals, so protecting API endpoints is critical and is easier said than done, given the vast number of APIs. Reliability can be a challenge, given the “spiky” nature of edge applications due to variations in user traffic, especially during large online events that drive up the volume of traffic. Given these realities, which functions are the most likely candidates for edge compute in the near term? I think the best use cases fall into four categories.

A/B Testing
This use case involves implementing logic to support marketing campaigns by routing traffic based on request characteristics and collecting data on the results. This enables companies to perform multivariate testing of offers and other elements of the user experience, refining their appeal. This type of experimental decision logic is typically implemented at the origin, requiring a trip to the origin in order to make the A/B decisions on which content to serve to each user. This round-trip adds latency that decreases page performance for the request. It also adds traffic to the origin, increasing congestion and requiring additional infrastructure to handle the traffic.

Placing the logic that governs A/B testing at the edge results in faster page performance and decreased traffic to origin. Serverless compute resources at the edge determines which content to deliver based on the inbound request. Segment information can be stored in a JavaScript bundle or in a key-value store, with content served from the cache. This decreases page load time and reduces the load on the origin infrastructure, yielding a better user experience.

Personalization
Companies are continually seeking to deliver more personalized user experiences to increase customer engagement and loyalty in order to drive profitability. Again, the functions of identifying the user and determining which content to present typically reside at the origin. This usually means personalized content is uncacheable, resulting in low offload and negative impact to performance. Instead, a serverless edge compute device can be used to detect the characteristics of inbound requests, rapidly identifying unique users and retrieving personalized content. This logic can be written in JavaScript at the edge and personalized content can be stored in JavaScript bundle or in a key-value store at the edge. Performing this logic at the edge provides highly personalized user experiences while increasing offload, enabling a faster, more consistent experience.

Privacy Compliance
Businesses are under growing pressures to safeguard their customers’ privacy and comply with an array of regulations, including GDPR, CCPA, APPI, and others, to avoid penalties. Compliance is particularly challenging for data over which companies may have no control. One important aspect of compliance is tracking consent data. Many organizations have turned to the Transparency and Consent Framework (TCF 2.0) developed by the Interactive Advertising Bureau (IAB) as an industry standard for sending and verifying user consent.

Deploying this functionality as a microservice at the edge makes a lot of sense. When the user consents to tracking, state-tracking cookies are added to the session that enable a personalized user experience. If the user does not consent, the cookie is discarded and the user has a more generic experience that does not involve personal information. Performing these functions at the edge improves offload and enables cacheability, allowing extremely rapid lookups. This improves the user experience while helping ensure privacy compliance.

Third-Party Services
Many companies offer “productized” services designed to address specific, high-value needs. For example, the A/B testing discussed earlier is often implemented using such a third-party service in conjunction with core marketing campaign management applications. These third-party services are often tangential to the user’s request flow. When implemented in the critical path of the request flow, they add latency that can affect performance. Moreover, scale and reliability are beyond your control, which means the user experience is too. Now imagine this third-party code is running natively on the same serverless edge platform handling the user’s originating request. Because the code is local, latency is reduced. And the code is now able to scale to meet changing traffic volumes and improving reliability.

One recent example of this was the partnership between Akamai and the Queue-It virtual waiting room service. The service allows online customers to retain their place in line, while providing a positive waiting experience and reducing the risk of a website crash due to sudden, spikes in volume. The partnership was focused specifically on providing an edge-based virtual waiting room solution to handle traffic during the rush to sign up for COVID vaccinations. The same approach could be used for any online event where traffic spikes are expected, such as ticket reservations to a sought-after concert or theater event, now that these venues are poised to open back up.

Conclusion
These examples highlight how important it is to understand and think carefully about what functions make sense to run at the edge. It’s true that some of these use cases may be met by traditional centralized infrastructures. But consider the reduction in overhead, the speed and efficiency of updating functionality, and the performance advantages gained by executing them at the edge. These benefit service providers and users alike. Just as selecting the right applications for edge compute is critical, so it working with the right edge provider. In this regard, proximity matters.

Generally speaking, the closer edge compute resources are to the user, the better. Beware of service providers running code in more centralized nodes that they call “the edge.” And be sure they can deliver the performance, reliability and security needed to meet your service objectives, based on the methodology you choose, while effectively managing risk.

The edge compute industry and market for these services is an evolving landscape that’s only just starting off. But there is a growing list of use cases that can benefit now from edge compute deployed in a thoughtful way. We should expect to see more uses cases in the next 18 months as edge computing adoption continues and companies look at ways to move logic and intelligence to the edge.

It’s back! I am happy to announce the return of the NAB Show Streaming Summit, taking place October 11-12 in Las Vegas. The call for speakers is now open and lead gen opportunities are available. The show will be a hybrid event this year, with both in-person and remote presentations. See the website for all the details or contact me with your ideas on how you want to be involved.

The topics covered will be created based on the submissions sent in, but the show covers both business and technology topics including; bundling of content; codecs; transcoding; live streaming; video advertising; packaging and playback; monetization of video; cloud based workflows; direct-to-consumer models, the video ad stack and other related topics. The Summit does not cover topics pertaining to video editing, pre/post production, audio only applications, content scripts and talent, content rights and contracts, or video production hardware.

Please reach out to me at (917) 523-4562 or via email at anytime if you have questions on the submission process or want to discuss an idea before you submit. I always prefers speaking directly to people about their ideas so I can help tailor your submission to what works best. Interested in moderating a session? Please contact me ASAP!