Webscale Streaming with 5G: Industry Ecosystem, Regulation Challenges and Global Opportunities

~~Speech in the Business & Innovation Symposium of SIGGRAPH Asia 2019

Nicole T. I. Chan, Taiwan

Webscale Streaming with 5G

Good afternoon everyone, I am Nicole Chan from Taiwan. It’s my honor to be here to discuss about Webscale Streaming with 5G.

Within next 10 minutes, I will not only talk about 5G but also focus on how OTT service, especially SVOD, (subscription video on demand), reshapes the industry ecosystem and regulations with 5G.

And the content will cover from the different views of broadband, global opportunities, new business models, and government regulatory.

Broadband

Let’s start with broadband.

Information and communication technologies (ICTs) are what termed an infrastructural service and broadband infrastructure is the fundamental to all the Digital Economic Services, including OTT services.

Broadband is the fundamental

New services come with new transmission technologies.

Back to 20 years ago, there is no OTT service on 2G network, or we should say, there was no mobile internet at all. Even to the 3G network, it is about voice and text. OTT service comes with 4G network, due to the transmission speed and capacity are both improved.

4G/LTE has made a big impact on consumers’ ability to reliably stream their favorite programs from pretty much anywhere.

What about 5G?

With 5G, there’s much more to deal with.

The 5G System offers many features e.g. Mobile Broadband connectivity with high bitrates and low latency, network slicing, distributed and mobile edge computing, that have the potential to augment the quality and efficiency of Audio/Video streaming services and to enable newly emerging services beyond traditional 2D video of TV and online services like 360VR, 6DoF (6 Degrees of Freedom) VR, Augmented Reality and Mixed Reality applications. The combination of 5G system features with state-of-the-art and emerging media services promises new technical and commercial opportunities.

5G Media Streaming

Since I am not a technical person and we have learned from the two previous speakers’ presentations, I won’t address much on the technical details. Just let’s get a rough picture of it.

The new 3GPP 5G Media Service Architecture (5GMSA) intends to offer a simpler and modular component integration model enabling services with different degrees of cooperation between Third Party content and service providers, broadcasters and Mobile Network operators and will enable the high-quality and value-added services and content to be efficiently delivered over 5G networks in cooperation with Mobile Network operators.

In short, the new architecture supports unicast downlink media distribution and uplink streaming.

5G Media and Entertainment

In the 5G era, Media and Entertainment will be a very important separated 5G vertical, it includes Contribution and Distribution of all media and entertainment and unicast, multicast and broadcast sit horizontally supporting all verticals.

Video Everywhere

According to IHS Markit’s Digital Orbit research, “The 5G era is set to drive the next wave of growth in video streaming.” And among all the activities, video streaming will be the first activity that U.S. consumers will increase their usage due to the arrival of 5G. Even ahead of video calling, social media, mobile gaming, virtual reality and augmented reality.

As a result, the deployment of 5G will help cause video usage to grow to 70% of mobile network traffic in 2022, up from 47% in 2015. IHS Markit also declared that the Killer App for 5G in the US will be video streaming.

Global Opportunities

Revolutionizes not just video but the entire ecosystem of connected devices. Let’s move to the Global Opportunities.

Key Opportunities and Impact

From Ovum’s point of view, the 5G KEY Opportunities and Impact on Media an Entertainment are: New Advertising Formats and Measurement, Empowered Gaming Experience, Virtual Environment as New Media Channels, A New Sensory Dimension to Entertainment, and In-Car Entertainment.

Key 5G entertainment ecosystem players

With 5G, it is possible to a sweeping transformation of the content industry into a platform business model.

There will be 4 major entertainment ecosystem players: 5G Network Operators, Content Owners and Distributors, Cloud Gaming Providers, and Games Platform Services and AR/VR Content Producers..

New Business Models

It’s about a new model for TV production, distribution and consumption. Mobile media consumption has been a big part of broadband. 5G technologies will enable the creation of new services and business models.

According to NPD Group, Video streaming accounts for more than 80 percent of all data traffic on smartphones. The average smartphone user consumed a total of 33.5 GB of data (mobile cellular and Wi-Fi combined) for streaming video content on his or her smartphone in Q4 2018, up from 24.6 GB in Q4 2016.

While this boost can be largely attributed to the increase in adoption of OTT video services, such as YouTube and Netflix, this couldn’t have happened without the smartphone hardware and network enhancements we’ve seen in the past couple of years.

In Cisco’s Mobile Visual Networking Index (2017~2022), it mentions about by 2021, video will make up 78 percent of all global mobile data traffic.

Once-in-a-generation shift

The last once-in-a-generation shift in entertainment took place in the 1980s. Cable TV took over the dominance from network television. And it’s time for OTT steaming service to break the dominance of Cable TV.

IHS Markit once forecasted that in 2022, OTT video subscriptions will surpass pay-TV subscriptions. But it happened sooner than people had expected.

According to the Motion Picture Association of America (2019), the number of streaming subscribers around the world (613 million) surpassed the number of cable subscribers (556 million) last year. And we can see that Disney+ has already attracted over 10 million subscribers in the first day when the service just launched.

VOD Business Model

Currently, there are 4 types of VOD business model. They are: Transactional (Pay Per View), Subscription, Advertisement-supported video on demand, and Hybird.

＊TVOD: Transactional. (Pay Per View). iTunes, google play, amazon instant video, You Tube

＊SVOD: Subscription. Netflix, Hulu Plus, HOB Go

＊AVOD: Advertisement-supported video on demand. YouTube, Hulu,

＊Hybird: You Tube

Data Business

From 4G, we see the ecosystem has been shifting to data economic.

Brian Roberts, the chief executive of Comcast, said he had been getting ready for the shift to streaming since 1997, when he and other executives had dinner with Bill Gates. “Bill says, ‘Someday you’ll have a bigger data business than a TV business,’” Mr. Roberts said.

Monetization

At Asia Video Summit hosted by AVIA on 8 November which was just last month.

VOD streaming services are now grappling with the burning question of monetization with no clear consensus on what the best model is.

Some people consider that revenues today are evenly split between advertising and subscription in the freemium model, but believes subscription would be the more important of the two in the future. Others would insists that advertising would be the key to unlocking consumer growth and loyalty.

No matter which way it goes to, better understanding of viewers’ behavior, localization and customization of content were required

Meanwhile, integration of technologies such as artificial intelligence, machine learning, cloud, voice search, augmented reality (AR) and virtual reality (VR) amongst others are required to accelerate the video industry’s transformation.

Regulatory

Let’s move to regulatory matter.

Regulators / Digital

This slide shows us a clear picture that how different the regulators and digital companies are.

Regulators are more concerned about orders but flexibility are preferred and more welcomed.

Regulation Paradigm Shift

“We are now living in a world of digital opportunities and with those opportunities comes a new set of challenges, requiring a new set of regulations.”

The regulatory paradigm shift will play an important role in boosting the digital economy.

‘Fifth-generation regulation’ includes common principles such as innovation, efficiency and collaboration to overcome today’s common barriers such as interoperability, quality of service (QoS), sharing of data and security.

What is collaborative regulation?

Collaborative regulation includes: (1)effective and regular coordination and interactions; (2)sharing of knowledge, experience, and resources; (3)exploration of synergies; (4)identification of possible regulatory overlaps; and (5)development of means of collaborative approaches to policy and regulations. Moreover, there is a need for enhancing collaboration between national government agencies on the one hand, and regional and global organizations on the other hand.

Collaborative Regulation

From my personal point of view, there are some of the most pressing issues the industry faces today, such as business models, advertising, human capital, news and policy, When I was the Minister in the Government, “how innovation in the world of online streaming video for curated content can be damaged by unwise regulation” is one of the most important issues need to be addressed. And proposals for greater regulation — some quite extreme — are also circulating in the region, and that there was a great risk of over regulation.

It is critical for regulators to collaborate with all relevant stakeholders in order to stay closer to the curve of technology and industry developments. Collaborative regulation is the key to unlocking digital transformation as there’s no single government agency would able to deal all the issues in Information society and Digital Economy. The accountability among government agencies and stakeholders should be working together to define mechanisms for cooperation.

Content Regulation

For content regulation, Light touch approach is preferred.

It has been wildly discussed among regulators form different Countries at IIC or IRF.

Some leading subscription video-on-demand services across ASEAN have come together to announce the creation of a self-regulatory Subscription Video-on-Demand Industry Content Code to safeguard consumer interests. The providers include Astro, dimsum, Fox+, HOOQ, iflix, Netflix, tonton, TVB and The Walt Disney Company Southeast Asia.

The Industry Content Code sets out principles to ensure that content offered on these participating platforms is authentic, free from hate speech, hate crimes, pornography, and other forms of inappropriate content. They also pledge their best efforts to provide consumer control features or other measures to ensure that content delivered is age-appropriate for relevant family members of the users in ASEAN.

One More thing

Before I end up my presentation, there’s one more thing that I would like to share with you.

Mindset Transformation

Technology and innovation often move faster than the key regulations. It is important to adopt the trend of Introducing the private ordering (co- and self-regulation) in order to transform the mindset from government to governance.

It’s all about mindset transformation.

Thank you for the attention !