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Podcast Episode 2 is live!. This week Mark Donnigan and I discuss: Poor Video Advertising Experiences; Growth of AVOD Services; Potential Content Roll-up in 2022 with Starz, AMC, ViacomCBS. (www.danrayburnpodcast.com)

We cover how the industry gushes about video advertising growth, without really addressing the problems around personalization, measurement, formats and low CPM rates. We also discuss the growth of AVOD services and question how many can exist when they are offering essentially the same thing — a bundled offering of free networks with a lot of old movies and TV shows and syndicated programming. We also debate which content companies might get acquired in 2022 including Starz, AMC and ViacomCBS.

Companies and vendors mentioned: Tubi, Pluto TV, Starz, AMC Networks, ViacomCBS, TikTok, Noggin, Comcast, Sony Pictures, MLB TV, Amazon IMDb TV, Roku, Sinclair Broadcast Group, Samsung TV, LG, Amazon, MGM.

Executives mentioned: Darren Lepke, Stephen Condon, Yueshi Shen, Andy Beach.

Another year down, another year of many poor video advertising experiences for consumers. As an example, CBS Sports (and many others) auto-play two videos, on the same page, AT THE SAME TIME! How is a viewer supposed to watch and listen to two videos concurrently? Common sense says that’s a bad idea.

We’ve also seen way more pop-up ads in 2021 when it comes to overlays. And many times, the overlay ad on the website covers up part of the pre-roll ad in the video window. Dueling advertisements?! And yet for the most part, the streaming media industry doesn’t discuss these ad problems. Instead, many simply gush about all the growth in AVOD, without really addressing what matters most – personalization, measurement, formats, lack of CPM growth.

In 2007 I wrote a post entitled “The Five Biggest Technical Issues Hurting The Growth Of Online Video Advertising” and sadly, 13 years later, the industry is still struggling with these issues. In 2009, I wrote a post entitled “Is There A Shortage Of Online Video Advertising Inventory?“, highlighting the fact that viewers were getting the same ad delivered to them over and over again. And yet 11 years later, for many of the games I watched this year on MLB.TV I got the same ad inserted into the stream more than 25x during a single game. And that’s when the ad worked because almost 30% of the time, the ads didn’t trigger properly at all. In 2020, I wrote how I watched 43 videos on YouTube across 3 different channels and got a Microsoft Teams pre-roll commercial 28x, and a State Farm commercial 15x. Video advertising issues from as long as ten years ago are still many of the same issues we are struggling with today.

Ad platforms, ad exchanges, content aggregators, publishers etc. almost never share any actual data around what CPMs are and where they are trending, based on the type of ad, type of content and platform. They also don’t discuss any real details around ad personalization, percentage of ads skipped, best adoption of ad formats on specific platforms, ads that don’t trigger properly, ads formatted wrong based on device/platform or all of the other technical issues we have as an industry. Instead, it seems people just want to talk about the “growth” in AVOD, without even sharing many metrics around how growth is defined.

As an industry, we need real data shared so we can discuss video advertising problems, work towards solutions, set proper expectations and have a way to measure success, based on actual methodology. Without the industry coming together to do that in 2022, the new year is going to continue to bring a lot of poor video advertising experiences for us all.

I’m excited to announce the launch of my new weekly podcast. Curating the streaming media industry news of the week that matters most, in 30 minutes. Unvarnished, unscripted and providing you with the data and analysis you need, without any hype. With co-host Mark Donnigan. www.danrayburnpodcast.com

This week we discuss the problem with Nielsen’s reporting and how the industry should define churn and retention; the importance of HBO Max and Disney defaulting to a single video stack; how some vendors are overestimating their valuations; and why Roku and Google’s dispute isn’t over.

Companies and vendors mentioned: Roku, Google, Disney Streaming Services, Hulu, HBO Max, NFL, ESPN, Amazon, NFL, YouTube, WarnerMedia, Discovery, Nielsen, SiriusXM, Vudu, Hive, Firstlight Media, Vimeo, Mux, Hopin, Brightcove, Fastly, Panopto. Executives mentioned: Joseph Inzerillo, Jonathan Stock, Rick McConnell, Mike Green, Nathan Veer, Doug Castoldi.

Note: The podcast has been submitted to all the platforms, might take time to show up. Few audio blips in Episode 1 we’ll have worked out for the next show.

With Thursday Night Football broadcast exclusively to Amazon next season, one has to wonder what the impact could be to ISP networks. I’ve heard Amazon has the desire to stream in 4K, but will Amazon’s CloudFront CDN along with the many third-party CDNs they plan to use be able to handle 4K video at scale? And what volume of traffic is expected? Will the stream max out at 1080p instead?

If I understand the deal correctly, Amazon’s exclusivity doesn’t extend to local markets, so viewers will still be able to get the game OTA in local markets. Some will still opt for that route over streaming which will impact the volume of streams, but to what degree is unknown. I know some companies are already working with Amazon doing traffic studies and estimates of what it’s going to take from a network standpoint, but it’s something the industry should start looking at and discussing as we’ve never seen this type of distribution deal for the NFL’s content.

Some may point to the Super Bowl as guide of what we can expect, but that’s not a good comparison since the majority of people watch the game on TV. The 2021 Super Bowl peaked at 5.7 million “viewers per minute”, which puts the actual concurrent simultaneous streams count lower than that. It’s going to be interesting to watch how Amazon approaches the season from a capacity standpoint across CDNs and ISPs and while I can’t share some of the numbers they are already discussing with CDNs, they are quite large from a capacity standpoint.

Once considered just part of the “nuts and bolts” of application infrastructure, APIs have moved swiftly into a leading role in driving digital experiences. For the CDNs that handle this API traffic, this is creating high expectations for performance and reliability, as well as expanding security challenges. The worldwide focus on digital transformation is driving increased adoption of microservices architectures and APIs have quickly emerged as a standard way of building and connecting modern applications and enabling digital experiences where connection speeds are measured in milliseconds.

We use these services—and the APIs that enable them—every day, within all applications. Things like interactive apps for weather, news and social media; transactional apps like those for commerce and banking; location services; online gaming; videoconferencing; chat bots…all rely on APIs. With new microservices coming online daily, expect the proliferation of APIs to continue. Indeed, recent surveys revealed that 77% of organizations are developing and consuming APIs and 85% indicated that APIs are critical to their digital transformation initiatives.

API traffic has some specific characteristics that can make them tricky to manage. Transactions are small and highly dynamic, yet they can also be quite compute-intensive. They are sensitive to latency, often measured in milliseconds, and prone to spikes. These realities, together with the proliferation of APIs, create some significant challenges for delivering content and services. APIs also represent the most common attack vector for cyber criminals. It has been reported that 90% of web application attacks target APIs, yet API endpoints are often left unprotected due to the sheer number of APIs and the limited resources available to police them. The challenge of policy enforcement is especially complex in organizations with several autonomous development teams building and deploying across hybrid cloud environments.

Organizations expect API response times in the tens of milliseconds, particularly for public-facing APIs that are critical to user experience. This can be difficult to manage given the highly dynamic nature of API traffic, which is often compute-intensive and difficult to cache. Many APIs are in the critical path for applications and if they are not delivered, it can render the application unusable. That explains why 77% of respondents in a recent survey pointed to API availability as their top deployment concern. Ensuring that availability can be challenging because API traffic volumes tend to come in waves or spike quickly when an end-user request triggers a series of requests to third-party services. Large online events can also drive up request volumes, creating even greater availability challenges.

Any or all of these issues can significantly impact applications. When public-facing APIs aren’t delivered within fast response times or have poor reliability, the user experience suffers. And if APIs are not secure, they represent serious cyberattack vulnerabilities. The potential results, with equal a poor user experience, leads to a loss of revenue and damage to brands. To minimize that risk, companies should start with the fundamental step of API discovery. After all, you can’t manage, secure and protect what you can’t see. With developers launching new APIs left and right, it is likely that there are many undiscovered API endpoints out there. So it’s critical to discover and protect unregistered APIs and identify errors and changes to existing APIs.

Content owners also need to think about where application functionality is taking place. While public clouds have emerged as the “go-to” for all kinds of application workloads, they do present some limitations when it comes to handling API transactions. One leading cloud provider achieves response times around 130ms (measured using Cedexis Radar – 50th percentile – Global community), yet many microservices require API response times of less than 50ms. Edge computing offers an attractive alternative to the cloud. Moving application functionality to the edge benefits from closer proximity to end users, minimizing latency and maximizing performance. Making the edge an extension of your API infrastructure can also help unify your security posture, improving operational efficiency. Load balancing traffic at the edge can improve availability while simplifying management. And moving computing to the edge can improve scalability, allowing customers to serve users globally with more network capacity. Additionally, executing code at the edge gives developers the ability to move business logic closer to users, accelerating time to value.

Of course, like cloud providers and CDNs, not all edge compute platforms are equal. It’s important to look at how many points of presence there are, how globally distributed they are and the proximity to users. Does their network allow you to easily deploy microservices in multiple edge locations? These factors have a direct impact on latency. You also want to make sure the network is robust enough to handle the spikes that are common with APIs. Finally, is the network secure enough to mitigate the risk posed by bad actors targeting API endpoints? The API explosion is far from over. That reality presents a compelling case to view the edge as the logical extension of your organization’s API infrastructure, ensuring your users get the experience they expect, whenever and wherever they want it.

In September, MUSO, a London based company that collects data from billions of piracy infringements every day, scanned the highest trafficked 250 global piracy sites and found that 82% of the piracy traffic is being proxied through Cloudflare. This is an astonishing number and when compared to other network providers, no other provider had over a 2% share.

For those that track the network provider space these findings probably aren’t too surprising since Cloudflare has a history of allowing piracy sites, along with terrorist organizations, to use their services. The disappointing news is that MUSO routinely informs Cloudflare about copyright infringing content on these sites, but doesn’t see them shutting off the websites. This is a clear violation of the first clause in Cloudflare’s AUP which states, “By agreeing to these Terms, you represent and warrant to us… (iii) that your use of the Websites and Online Services is in compliance with any and all applicable laws and regulations.”

MUSO says other network providers like AWS and Microsoft act on notifications and takedown requests and remove sites from their service resulting in MUSO only seeing a small number of piracy sites on other these providers. In fact, the numbers are so small that AWS and Microsoft fall under the “other” bucket on the list, below 0.6% of all piracy traffic. If you want to see a snapshot of the top 25 piracy sites from MUSO, you can see them here.

For clarity on the methodology, MUSO took the top 250 highest trafficked piracy sites in September 2021, which represent 40% of global piracy traffic. They look up the network provider for each site, group them by traffic and then look at the volume. These figures don’t measure the piracy streams and downloads of the content within these sites, they reflect the traffic to the sites themselves. MUSO’s digital content database covers 196 countries, millions of measured devices and billions of piracy pages continuously tracked and is used by clients including Sony, AMC, Bloomberg and many others in the broadcast, publishing, film and software industries.

Based on the data, there’s a very clear pattern here. Cloudflare has a huge share of traffic from the top 250 global piracy sites running through its network and benefits financially as a result. There is no way to know how much revenue they make from these piracy sites, but with such a large share of traffic, it’s substantial.

As content providers strive to make the streaming viewer experience more personalized and friction-free, the role of API-enabled microservices is growing rapidly. But, just like the complex interactions that occur under the hood of your car, many probably don’t think much about the APIs that make feature-rich services possible. After all, they just work, until they don’t. And it doesn’t take much to frustrate subscribers who can switch to another provider with the click of their remote or a command to Alexa or Siri. Without APIs, streaming media services would not exist. There are three broad phases of a typical streaming media experience where APIs are essential:

• Phase 1 – Login and selection: When the viewer opens the app, their saved credentials are checked against a subscriber database and they are automatically authenticated. Information stored in their user profile is then fetched, allowing the app to present a personalized carousel of content based on the subscriber’s viewing history and preferences, including new releases and series the viewer is watching or has watched recently. This involves a recommendation engine responsible for delivering the thumbnail images of recommended content for the subscriber. APIs must accomplish all of this in seconds.
• Phase 2 – Initiating playback: Once the subscriber has selected their content and pressed “play,” a manifest request is generated, providing a playlist for accessing the content. This may involve interactions with licensing databases and/or advertising platforms for freemium content, all handled by APIs.
• Phase 3 – Viewing experience: During playback, APIs manage multiple aspects of the experience, including serving up ads. In some cases, these ads may be personalized for the subscriber, requiring a profile lookup. If the subscriber decides to switch platforms midstream—say from their big-screen TV to their tablet—APIs come into play to make that transition seamless, so the content picks up right where it paused on the other platform.

API calls are occurring throughout playback, tracking streaming QoS to optimize performance given the subscriber’s bandwidth, network traffic and other conditions. Additional information, such as whether the subscriber watched the entire movie or bailed out partway through, may be delivered back to their profile to further refine their preferences (Most content providers only count a program “watched” once the subscriber has reached some percentage of completion). That’s just a high-level view—in practice, there may be hundreds or thousands of API interactions, each of which must occur in milliseconds to make this complex chain of events happen seamlessly. If just one of these interactions breaks down, the user experience can quickly go from streaming to screaming.

With APIs being so critical to the user experience there are many potential points of failure. The wrong profile may be loaded. The recommendation engine may not serve up the suggested content thumbnails. The manifest request could fail, triggering the dreaded “spinning wheel of death,” preventing content from loading. Ads may hang up, disrupting or even blocking playback completely. Some of these API failures are merely annoying—but others are in the critical path, preventing content delivery.

In addition to APIs essential for playback functions—manifest calls, beaconing for QoS, personalization, etc.—other APIs play crucial roles for business intelligence. APIs that gather data on user engagement, such as percentage of completion of content, are important for analytics that inform critical decisions impacting content development budgets and advertiser negotiations. This data is also used for subscriber interactions outside the platform, such as email touches to encourage subscribers to continue watching a series or alert them to new content matching their preferences. Continually keeping a finger on the pulse of subscriber behavior is crucial for business decisions that create a sticky service that builds subscriber loyalty. APIs make it possible.

Given the role APIs play, ensuring their performance, reliability and security should be a priority for streaming media providers. The first step is recognizing their importance and understanding which APIs are in the critical path. These may need a higher degree of protection, such as having backups for them. Delivering critical APIs from the edge, from endpoints closer to the subscriber, can also help maximize both their reliability and their performance. Another good practice is keeping your APIs on separate hostnames from your content (api.domain vs. domain/api), allowing each to be tuned for optimum performance and reliability. Making sure your content delivery network has robust security features is also important, as APIs are an increasingly common vector for cyberattacks, which is why you are seeing more CDN vendors offering API protection services.

With consumers demanding a continuous supply of new streaming features and capabilities, APIs will only become more numerous and more critical to business success. So it only makes sense to pay as close attention to how your APIs are architected and delivered as you do to your content.