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China OTT
- 1. Leading the Charge: What can we Learn from China’s Massive OTT deployment? SMPTE 2018 Annual Technical Conference & Exhibition Reza Rassool CTO, RealNetworks
- 2. Today’s Agenda • Update re. RealNetworks in China • Discuss massive OTT growth in China • Discuss regulatory and technical challenges • Discuss unique opportunities in China Exec Summary/Takeaway: RealMedia HD by RealNetworks provided China with the lean codec with clear licensing and high visual quality needed to enable that country’s incredibly fast rollout and uptake of OTT content. TALK:
- 3. Mainstream TV Internet video business 1st Online radio Stations 1st Online Cable TV-like video subscription Ringback tones First mainstream online music service with all major labels “Software as a Service” with turnkey mobile video services for largest US carriers 1-click DVR-like recording for internet videos Http Live Streaming on Android Video player and cloud service to easy move, watch, and share movies Allow consumers easily customize their callers' ringback tone Social casino game to use monthly sweepstakes to U.S. Shipment of RMVB codec of 1.3 billion U. Next-generation streaming media codec, RMHD +20 Years of Innovation. 1995 2000 2002 2004 2007 2011 2013 2014 20151997 2016 2017 2018 SAFR launch Scener launch STORY:
- 4. RealNetworks is strong in China History of RN in China • Established Office in China 2005 • Licensed RealMedia CODEC in 1 Billion devices by 2014 • RMHD, 11th codec version, Huawei OS integration 2015 • RMHD adopted by CIBN 2018 for OTT
- 5. China, Internet and OTT Devices on internet (China) MobileDesktop Laptop TV Tablet Global Internet users Internet penetration of population in China Internet penetration of population in US STATS:
- 6. China’s Subscription OTT Video Market is Booming In 2018, close to 229 million people in China will watch video via a subscription streaming service that bypasses traditional distribution. FACTS:
- 7. Top 3 OTT Operators in China (2018) WINNERS: Tencent iQiyi-Galaxy Youku-CIBN Rank Service Penetration PC Mobile PC Mobile iQiyi 26.71 -5.74 50.8 53.7 126 424.1 421.3 Tecent (Video and all) 363,87 N/A 62.6 N/A 137 N/A N/A Ali Media & Entertainment (Youku) N/A N/A 30 N/A N/A N/A DAU (million) MAU (million) Name Revenue (M US$) Margin Subscribers (Paying)
- 8. • Government regulations from: • MIIT: Ministry of Industry and Information Technology of the People’s Republic of China • SART: State Administration of Radio and Television, established Apr 16th 2018/SARFT • OTT Licenses • SART license on content creation (studios) • SART license on Content aggregation and certification platform (7 total, CIBN has 1) • SART license on Streaming Service operation: (588 in total, both RuiAoShi /CIBN Oriental have 1) • MIIT license on website (Each website must have one /RuiAoShi has it for today365.com.cn) • Typical OTT TV/service Providers • Get service operation license • Connect to at least one of the 7 aggregation platforms • Each license holder should be responsible for keeping all contents checked and certified OTT Regulations in China
- 9. China’s OTT Regulatory Landscape
- 10. China OTT Licenses Directly owned by government
- 11. • Content • ~15k VOD titles • 19 carousel channels • Membership: RMB 360 (US $52) per year • Users • 110 M active devices under regulation • 32 M actives subscribers on his own services CIBN
- 12. • Background • StarsChina was founded in Nov 2013. • A CIBN holding company (CIBN Oriental holds 51% shares of StarsChina) • An emerging company to explore mobile OTT business • Service • Positioned as ‘Mobile inter-action media operator’ • Exclusively runs ‘CIBN Mobile TV’ service for China Radio International. • App covers Android and iOS, services cover VOD and Live • Users (2018) • 430M registered users • 2M daily active users. StarsChina
- 13. • To take the user experience to higher level • To deliver higher video quality as well as save CDN cost • To expand HD video service to wider coverage • Compelling business value to CIBN • Possibility to build a unique ecosystem for new video consumption model CIBN’s Ambitious Requirements
- 14. • Improve Video Quality Without increasing bandwidth or processor requirements. • Smooth streaming performance and reduce latency without reducing video quality. • Reduce CDN costs (Second only to acquisition in OTT costs) • Regain CODEC control (no patent pools or questionable licensing issues) What OTTs Want TALK:
- 15. • Software CODEC • Ease the deployment – Customer simply installs / upgrades software • Integration – OTT can integrate an SDK into their app • Works on Android, iOS, Linux, Windows. Some phones provide native support. • Android SDK • Works on OTT boxes • Works on mobile phones • Works on Smart TVs • Encoder • Runs on Windows for end users or short term trial • Runs on Linux for commercial (FFMPEG library available) What Was Needed? SOLUTION:
- 16. A Software Defined CODEC for a Software Defined Network: • Best balance of quality vs. efficiency • High efficiency: smaller files, faster software encode vs. h.265 and VP9 • High resolution: natively supports 4k, 8k • Low CPU consumption: mobile friendly (8-11% more battery consumption vs H.264 software decoder) • Moore’s Law wins • Greater device coverage RealMedia HD (RMHD™)
- 17. Offers cost reduction and service enhancement vs. AVC. RMHD Compression Performance 1080p
- 18. Offers room for growth to 4K. RMHD Compression Performance 4K
- 19. Low-latency HLS streaming • Leveraging learning from RTSP. Move buffering logic from server to client. • Fast start up • Fast seeking • Low latency • CDN friendly Superior Streaming
- 20. Success of a proprietary video format requires both ecosystem engineering as well as codec engineering. Any questions? Thank You! THANKS!
Editor's Notes
- Good afternoon, my name is Reza Rassool, CTO of RealNetworks Thank you to [HOST] for the kind introduction. In addition to overseeing corp tech strategy, I directly manage: RealMedia - the video codec and product development SAFR – the AI-based computer vision platform
- Today I plan to present: An update on RealNetworks The growth of Over-the-Top television in China The challenges and the opportunities The broad message for you to take away is: OTT is huge in China and growth Real continues its history of innovation – especially in China.
- In the era of 14.4 dial-up modems, RealNetworks invented streaming media. The RTSP protocol was first submitted to IETF in 1996. With Real Audio first and later Real Video CODECs it became possibly to watch TV over the Internet. But nothing was on! It became clear that Real would need to engineer and nurture the entire content ecosystem. The first music streaming service, Rhapsody, was launched in 2002. This is now called Napster – incidentally the only profitable music streaming service. Real also ran and powered many video streaming services. Fast forward to today… Real launch Scener – a new way to watch online, more socially with commentary. Imaging Twitch of OTT TV. Also we launch SAFR – secure, accurate facial recognition. This is a powered by Real’s computer vision technology. Now we don’t just compress video we also extract a deep understanding of the video contents.
- Real faced stiff competition in the US (which later proved to be anti-competitive). However, the brand thrived in China. The RealMedia codec is now largely developed in China.
- So by the numbers… Internet started late in China but China has been moving fast China penetration rate is not as high as west world but consider the population and economy situation, more than half people got on internet is still significant. Everyone is on mobile now. People in China love mobile much more than other devices, this is the same trend as the whole world. China’s Internet usage outpaces the rest of the world. And it is growing with plenty of Compare with the US over the period 2007 to 2016
- Video is part of Tencent, the business status doesn’t publish stand alone. iQiyi went public on Nasdaq late March, so we see clear report.
- Film was removed from the scope when SART established. Film is now a new department to central gov. The regulation in China is complicated, some talking arguments for your reference: It’s not only China which has regulation on OTT video. Regulation in China changes and will keep changing to reflect the policy.
- Each OTT device has only one native service app preloaded. Downloadable 3PP apps are up to users selection from internet but still under regulation. Each OTT service has to connect (thus under regulation) to a streaming service license. Smart TV and Box are both categorized as OTT devices in China. The regulation is required and under direct control by SART. Regulation is bundled to streaming service thus the App but not only the devices.
- CCTV, CIBN, CNTV are now merged into one, people are talking that the three licenses will be merged into one in same way, but no official news by far.
- CIBN is both a regulation platform and a service operator. CIBN is close to Youku, they share users and contents in one way or another, makes the statistics complicated. Generally when we call CIBN we actually mean ‘CIBN Oriental’, which focuses the business on TV screen leaving the mobile apps to StarsChina. There is a re-org happened to CIBN just in the week of May 7th, it is part of CCTV, CIBN, CNTV merging.
- This soft launch is globally the first public streaming service in RMHD. StarsChina is profitable by itself now. Most of its revenue comes from ad and B2B service.
- The MOU event with CIBN was Aug 17th 2017 in Beijing, CIBN office. CEO is Mr. Gong CTO is Mr. Ke CRI CTO is Mr. Wang StarsChina GM is Mr. Xie
- Improve Video Quality To make video look better requires more data which increases cost for storage and network Then the playback requires more powerful processing resources from device Improve Streaming Performance Start up playback faster and smoother requires reducing bitrate Reducing bitrate reduces quality Reduce CDN costs CDN is the second highest cost for most OTTs after content acquisition. Regain CODEC control H.265 is good but patent situation is complicated and risky H.265 patent pools never gave any customer support nor optimization In US, Netflix currently represents more than 1/3 of internet data traffic, bandwidth / CDN cost is significant Top cost of CIBN is content (copyright). But CIBN got CDN license at end of 2017, they are considering to invest more on CDN thus will be more sensitive to CDN cost than before.
- AVC (aka H.264) at 2.5MBps is the current bitrate that CIBN delivers 1080p. By using RMHD we cut 40% bandwidth cost off. HEVC (aka H.265) definitely can do 1080p even 4k, but the cost of higher level chipset is a concern. License fee from HEVC was announces long ago but not started yet in China, which increased the risk of adoption in CIBN. HEVC is a strong technology but we are just better.
- Saving 25% vs. HEVC - tested and support by VMAF score, and VMAF is public (actually open source) for everyone to repeat our test. Facebook tested another next generation video codec AV1 (by AOM, Alliance of Open Media) resulting in 30% saving against HEVC, which seems to put RMHD in the same level of technical advantage.