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Summary

According to Ovum's 2015/16 ICT Enterprise Insights – Media survey, more than three-quarters (77–78%) of Internet streaming TV and video service providers highlighted faster time to market and higher operational efficiencies to enhance profitability as their two primary business priorities for 2016. Furthermore, in a highly fragmented multiscreen video services segment, premium media asset owners (broadcasters and digital service providers) need to efficiently manage quality of service (QoS) and quality of experience (QoE) for individual audiences on multiple devices. With operating margins under pressure, premium media asset owners are being pushed to ensure a seamlessly integrated digital user experience at a lower cost (according to 76% of respondents). The need to maintain healthy multiscreen video services profitability and provide an uninterrupted QoE – a pivotal differentiator in the online video space – has paved the way for AT&T's acquisition of Quickplay Media from Madison Dearborn Partners (announced in May 2016). Ovum believes that Quickplay's assets will not only support the expansion of AT&T's personalized TV and video experience, but also effectively lower its multiplatform total cost of ownership (TCO) – that is, the cost associated with launching new OTT services and managing them on a day-to-day basis.

Quickplay's horizontally diversified managed services portfolio reduces multiscreen video services TCO by up to 70%

The multiscreen video services content supply chain is complex, and it is slowly becoming capital intensive, with higher investment on first look and the shift by broadcasters and digital service providers to securing original programming digital assets to reduce churn. Rising content acquisition costs and the exponential increase in newer Internet-enabled media devices (smartphones, tablets, and consoles) and wearable devices supporting SD, HD, and UHD (4K/8K) video are presenting further challenges for enterprises focusing on multiplatform premium rights monetization. Next-generation TV and video distribution and engagement needs include the following:

  • Scalable, orchestrated, and agile media preparation workflows.

  • Real-time metadata indexing and configuration to meet changing business requirements (i.e. addition of new content consumption screens).

  • Flexible third-party integration with internal, external, and content supply chain-based systems (digital rights management, recommendation engine, content delivery networks, and linear delivery channels).

  • Robust device and user management, analytics, and reporting.

  • Management of multi-format content ingestion, acquisition, and packaging (includes encoding, contracts administration, royalty processing, and rights limitations).

As large premium media asset owners aggressively launch new personalized linear and nonlinear TV and video services, managing multiple offerings while lowering opex requires a managed services partner such as Quickplay. Quickplay's multi-tenant, cloud-based platform enables a tightly integrated, highly scalable distribution workflow (across key areas of content acquisition, media processing, enrichment, merchandizing, distribution, and secure playback) to deliver premium content on all devices and networks.

Although it has traditionally focused on tier-1 premium media asset owners in North America (e.g. Bell Canada and Rogers Communications), the company has aggressively expanded its footprint in Asia and Latin America, securing reference accounts such as HOOQ.

The acquisition of Quickplay will not only support AT&T's next-generation Internet streaming TV and video services portfolio, which includes DIRECTV Now, DIRECTV Mobile, and DIRECTV Preview, but also expand its "tailored video anywhere" vision into non-media sectors such as education, healthcare, and government. At the core of Quickplay's platform is its software-defined headend (SDH), a common software layer that virtualizes the underlying hardware and networking components that make up its flagship platform service. The platform's highly scalable architecture, packaged into a service operations framework, will drastically reduce opex for AT&T due to open source configuration, ease of third-party plug-ins, and standardization of media workflows. Finally, as profitability slowly becomes pivotal in the highly competitive multiscreen video services segment, managed services providers with open APIs and flexible third-party integration with existing internal and shared systems will witness strong demand due to economies of scale and scope.

Appendix

Further reading

"Platform-based services are fast becoming prime differentiators in the media transformation era," IT0006-000293 (June 2016)

"Virtualization and orchestration of the content value chain are vital for digital transformation," IT0006-000289 (June 2016)

"IBM's Ustream acquisition indicates that video is becoming the 'core' of digital audience engagement," IT0006-000285 (March 2016)

Author

Kedar Mohite, Senior Analyst, Media & Broadcast Technology

kedar.mohite@ovum.com

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