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Bristol & Exeter House, Lower Approach Road, Temple Meads, Bristol BS1 6QS Phone: +44 (0)117 925 7019 Fax: +44 (0)117 329 1480 Email: [email protected]
R E T H I N K T E C H N O L O G Y R E S E A R C H
“L e a d in g t h e w a y w i t h i n d e p en d en t t h ou g h t a n d n o r e g u r g i t a t e d a n a l y s i s ”
R ETHINK TV -THE R ES EARC H ARM O F FAUL TL INE O NL INE R EP O R TER
Authored by Peter White
Transcasting and the Birth of the Smart IP pipe
How Multicast ABR gives ISPs a chance at displacing the CDN
Companies mentioned in this report: AT&T, Sky, Orange,
Comcast, Liberty Global, Telus, Cogeco, Telefonica etc.
Executive Summary Only
Copyright © 2018 Rethink Research, All rights reserved.
2
Global subscriptions are just beginning – initially in Europe and Latin Amer-
ica - and this technology will ramp over the next two years, particularly in
Europe, which will overtake the US, before a late start to M-ABR in Asia Pa-
cific will see it emerge as the global leading market for Multicast enabled
ABR.
Initially in Europe much of the activity will be among Telcos, as they have
the multicast resources in place to take easy advantage of this technology.
Later, as more cable becomes DOCSIS 3.1 enabled, we will see a surge from
cable, both in the US, Europe and part of Latin America. Cable in China and
India is not expected to embrace this technology in the period of this fore-
cast, mostly due to being on previous versions of DOCSIS or not having two
way cable yet at all.
Typically a telco will tests this technology for 6 months, and then conduct
field trials for another 6 months and then begin to roll it out, so that the pro-
cess to catch up with a rival who has introduced M-ABR will typically take
about 18 months. It can be done sooner and as services emerge which take
advantage of Multicast ABR, we expected some rival operators to catch up
with installations taking well under a year from start to completion.
This will particularly be the case where there is no previous multicast IPTV
and they have used Adaptive Bit Rate from day one. In this instance new
networks can use it for both live streaming, but also for VoD.
TRANSCASTI NG AND THE BIRTH OF THE SMART IP PIPE
Market development and forecast
Copyright © 2018 Rethink Research, All rights reserved.
3
Here is the list of companies our intelligence tells us have some use of
Multicast ABR at present, although not all of them have currently an-
nounced such a shift. In the US it is just Comcast, although we expect
AT&T, Frontier Communications, Telus and Cogeco (in Canada), to an-
nounce something during 2019.
In Europe we understand that Orange and SFR-Numericable are already
using the technology and we are expecting early moves from Liberty
Global (in numerous territories) Belgium’s Proximus, Denmark’s TDC,
Finland’s DNA Oy, Bouygues and Free in France, Unity Media and
Deutsche Telekom in Germany, Telecom Italia, Orange in Poland and
Spain, and Portugal’s NOS and Portugal Telecom and British Telecom, as
well as Sky UK. We would expect all of these to break cover during 2019
with Multicast ABR plans of some description. Telefonica has been talk-
ing about M-ABR for about a year and may go to market with something
it has built itself or compiled from ingredient offerings.
There is similar interest at a smaller number of operators in Latin Ameri-
ca, including América Móvil subsidiaries and while Chinese equipment
suppliers are showing the capability at trade shows, they are really only
in the process of developing M-ABR right now and are mostly just offer-
ing marketing messages.
US tier 1 players are all in extended lab engagements but have shown no
sign of triggering installations as yet.
Which operators are active?
Copyright © 2018 Rethink Research, All rights reserved.
4
The Multicast ABR market will accelerate slowly, initially in Europe, and
then catch fire in North America and Latin America, and finally take off
belatedly in the Far East in advanced Chinese and Asia Pacific markets.
Collectively these markets will be worth $852.2 million annually by 2023.
Revenues will grow fastest over the next two years in Europe, but the US
already has a considerable investment in Multicast ABR at Comcast, and
this will be followed up by other cable and IPTV operations.
By 2023 a handful of Asia Pacific markets will drive potential revenues
there of $408 million in license fees for those providing both Transcast
servers inside the cloud and Multicast Clients, inside the home or at the
edge of the network.
Multicast ABR Forecast
Copyright © 2018 Rethink Research, All rights reserved.
5
The result will mean that CDN providers will miss out on the huge op-
portunity for “live” delivery of sports, music and eSports live video ser-
vices, which are expected to grow close to matching SVoD in numbers of
concurrent streams. CDNs will continue to grow however, due to contin-
ued upswing in SVoD and other VoD video delivery and non-video mar-
kets.
The lack of IP infrastructure in India, including broadband lines and
WiFi, will lead to live DTH multicasting becoming an opportunity there.
In China the primary ISPs – China Mobile, China Unicom and China Tel-
ecom are expected to dominate this market, but to arrive very late to it in
2022.
In Europe multicast is expected to bring in $232 million in revenues an-
nually by 2023, and the US some $150 million. Latin America will lag on
$62 million although is more active right now than say Asia Pacific. This
means we reach 2023 with Asia Pacific taking up 48% of the market by
value, Europe some 27% and the US on just 18%.
Although we anticipate that pricing will be lower in Asia Pacific and in
Latin America, this will lead to Asia Pacific growing into the largest mar-
ket by 2023, with Europe in second place and the US third, with Latin
America bringing up the rear.
One of the things which skews this market is that tier 2 and tier 3 Telcos
who have never got around to installing multicast routers within their
networks. They will be unable to follow suit and be at a huge disad-
vantage, unless they take on the huge cost of upgrades.
Copyright © 2018 Rethink Research, All rights reserved.
6
In our forecast below there are a number of issues to be considered, the
first is that on average each Telco only supplies about 60% of its custom-
ers with Home Gateway routers. Most are prepared to supply 100%, but
offer weak WiFi options, and low grade Home gateway equipment has
led to a strong retail replacement marketplace with advanced features
running ahead of those supplied by telcos. This means that while M-ABR
has the potential to be a 100% roll-out across an entire broadband net-
work, we have forecast it as beginning at 60% of possible end points and
growing from there.
For Cable homes we have looked at DOCSIS 3.1 implementation an-
nouncements and then modeled the operator’s usual rate of uptake of
any new CE technology and assumed that M-ABR would roll out follow-
ing 25% or more of the network being upgraded. Cable also suffers from
60% of home gateways only being provided from the operator. Interest-
ingly when a DTH operator decides to implement an M-ABR strategy,
100% of the set tops it provides are available immediately, although we
have modelled that some would be too old to support a Multicast to
Unicast conversion client.
M-ABR, along with better WiFi chips and a mesh or multi-AP strategy,
will be used by operators to increase their market share of the home
gateway and we have factored a decreasing retail supply into our calcu-
lations, shrinking to either 20% or even 10% of available installations, ra-
ther than the current 40%.
Although mobile eMBMS can be considered a Multicast, we have no con-
fidence that this will be implemented within the forecast period of this
report. eMBMS or LTE Broadcast exists and has been championed by
Methodology
Copyright © 2018 Rethink Research, All rights reserved.
7
Verizon in the US, but very few others have used it. This can facilitate
bringing Multicast all the way to the phone or to the network edge. This
is done by allocating spectrum to each channel, creating an artificial Sin-
gle Frequency Network, and telling all phones how to find the live TV
channel.
Another way to achieve this would be for Mobile Network Operators to
convert the signal into a Unicast at the network edge on a Mobile Edge
Computing server, just prior to the base station. While we think this is a
likely long term scenario, the network edge has first to be built and there
are other Apps queuing for it, and eMBMS has never had huge uptake
within handsets, and we see no reason for this changing soon.
Copyright © 2018 Rethink Research, All rights reserved.
8
Operators must get ready for Multicast ABR, which today is in its infancy with
services only just beginning - or risk losing out on a new revenue stream.
The Multicast ABR revolution will enable video to the home in real time and cre-
ate a “linear concurrency” in viewing live events.
This is a strategic issue for C suite executives in fixed line operators, OTT video
services, ISPs, pay TV operators, and their equipment and software suppliers, and
investors.
• How Multicast ABR allows ISPs to reduce their dependency on CDNs
• How rapidly Multicast ABR will deploy across the globe
• Benefits of Multicast ABR
• Who is early to market in Multicast ABR
• Which business models this makes possible in future
• Outcomes for CDN players
Who should read this report and why?
This report will tell you...
Copyright © 2018 Rethink Research, All rights reserved.
9
We discovered early on that teams of people need to stay in step, so we
never limit the subscription to one person.
The price to buy this report is $2,500 (allowing distribution between 1 - 5
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Rethink TV is our video research team, producing market forecasts, tech-
nology white papers and tracking operator-technology vendor relation-
ships in pay TV, OTT video and have documented the transition of TV
services from the TV set, onto laptops, tablets, phones and smart TVs and
other devices.
Our sister publication Faultline Online Reporter has been Rethinking the
ideas behind TV for the past 20 years. We thought it was time you gave
you a reliable source of business forecasts for the underlying technologies
which have made that transition possible.
Rethink TV also tracks the top 100 paid OTT service providers and their
suppliers, providers monthly updates to their key providers whether that
is Adaptive Bit Rate packaging, encoding, DRM, recommendation sys-
tems, analytics or programmatic advertising systems.
It comprises of two parts:
1) 12 forecasts a year, delivered once a month, related to OTT and video
2) 100 up-to-date profiles on the top 100 operators globally.
Here are some sample titles of reports we have produced recently:
• The Multi-AP WiFi revolution - Forecast to 2023
• How Android TV finally won the set top wars - Forecast to 2023
• Video Analytics chases churn prediction to a $2.3 bn market
View more: https://rethinkresearch.biz/reports-category/rethink-tv/
Rethink TV: Forecasting disruption in video
Copyright © 2018 Rethink Research, All rights reserved.
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RETHINK LEADERSHIP
RETHINK TV ’S MAIN CONTRIBUTORS
Peter White - Principal Analyst
+44 (0)117 329 1480
Thomas Flanagan - Analyst
+44 (0)117 329 1480
Peter White - Co-founder and CEO
+44 (0)117 925 7019
Caroline Gabriel - Research Director
+44 (0)207 450 1230
www.rethinkresearch.biz
Copyright © 2018 Rethink Research, All rights reserved.
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Rethink is a thought leader in quadruple play and emerging wireless and
IoT technologies. It offers consulting, advisory services, research papers,
plus three weekly research services; Wireless Watch, a major influence
among wireless operators and equipment makers; Faultline, which tracks
disruption in the video ecosystem, and OTT video. Riot on enterprise dis-
ruption from the combination of AI/IoT and cloud.
About Rethink Technology Research
Need more information?
Chloe Spring - Head of Marketing
+44 (0)117 925 7019
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Bristol & Exeter House Lower Approach Road
Temple Meads Bristol
BS1 6QS United Kingdom
Tel. +44 (0) 1173 291480 Tel. +44 (0) 1179 257019
www.rethinkresearch.biz
Published August 2018