with Stephane Bourque, CEO of Incognito Software
Demand for over-the-top video is growing quickly and ISPs are looking for ways to make sure they can deliver a high quality of service to users. Stephane Bourque, CEO of Incognito Software, and FierceOnlineVideo Editor Josh Wein recently discussed some of the considerations ISPs face in delivering online video, such as the prospect of more OTT providers, the adoption of 4K streaming and the wait-and-see approach ISPs are taking to net neutrality in the U.S.
FierceOnlineVideo: How do you expect the over-the-top video landscape to change in 2014? Will we see new services introduced?
Bourque: I expect the OTT landscape will change dramatically this year. I think we'll see several new players get into the space with several new types of offerings. The public is ready for something a little different. We saw Sony jump into the game recently. I think this is just the tip of the iceberg. There will be a lot of different companies, different types of content libraries and more for subscribers to choose from than what they can today.
FierceOnlineVideo: Is there something different about the U.S. that makes other geographies more attractive or easier to introduce over-the-top services?
Bourque: Around the world, you have the benefit of large local or culturally local libraries available. You have a lot of content that is available within the region that's not Hollywood based or European based. You have a lot of local content that's not readily available and could probably be monetized very easily as an over-the-top library, whether it's local talk shows, news or sporting events.
FierceOnlineVideo: What are the trends around bandwidth demands related to video? How does an ISP come up with a best guess for bandwidth demand?
Bourque: If you look at the history of the Internet, at first email was king. Then social networking outpaced email. Video came in to the background, slowly outpacing email. If you look at the current numbers, probably more than 70 percent of all Internet traffic is video based, and it's clear video will generate pretty much all traffic over the next few years. ISPs are focused on delivering a high quality of service for video and audio streams and making sure latency won't hurt the viewing experience. With all these new over-the-top services, we're getting more and more traffic. These networks that were built a few years ago are starting to get saturated. Providers are starting to see slowly but surely they're getting congestion conditions on their network. That doesn't mean the experience suffers immediately. But it's a red flag the providers must avoid because the likelihood of a consumer experience suffering is greatly increased. They need tools to run "what if" scenarios. "What if" you have three concurrent streams into the same home? "What if" Netflix updates and attracts more subscribers, streams more HD movies and consumes more traffic? What happens to my network during that period? Where should I put my expenditures to support the agreements I have with my subscribers and make sure there are no problems?
FierceOnlineVideo: How are your customers thinking about over-the-top 4K/Ultra HD video?
Bourque: I don't think it's a 2014 problem for any of the ISPs we've spoken to. They are all seeing it. The set manufacturers finally have sets available at reasonable prices and will probably start driving content. It should be a growing concern in 2015 and 2016, for sure. The good thing is some technology will come to the rescue to help these providers. Things like DOCSIS 3.1 will allow someone to deliver two or three 4K streams at a time to the home. 4K or UltraHD is not a concern today. By the end of 2015, we should see exactly where this is going.
FierceOnlineVideo: What effect has the recent D.C. Circuit's ruling on the FCC's Open Internet order had on the way ISPs approach these questions and how do you expect it to play out in the next year or two?
Bourque: ISPs have built their business on net neutrality so they're kind of stuck. They need to keep customers on their side and monetizing traffic may cause some backlash. We've seen that right now with the revelation that the NSA has been looking at the traffic for so long now. If you start monetizing traffic, it means you're also monitoring the traffic, and I think people will be a little wary of someone looking at what they're doing like that. So ISPs will need to modernize their networks but at a reduced cost. The way to do this is to use the proper tools and monitoring and so they can know that when they upgrade the network, they are doing it at the right time for the right reasons. They can't spend millions of dollars guessing about how to improve network performance.