The movie “Everything Everywhere All at Once” is not a documentary about the demands of media consumers around the globe. But it could be. The growth of streaming services throughout the last decade—accelerated by the global pandemic—has had a huge impact on the video distribution marketplace. And it’s not done yet.
More than 80 percent of U.S. households have at least one subscription streaming service, according to media research services firm MRI-Simmons. And the number of households using multiple services has reached more than 60 percent, according to Parks Associates.
In July 2022, Nielsen announced that streaming usage surpassed cable to claim the largest share of television viewing for the first time. Streaming represented a record 34.8% share of total television consumption in the US, while cable and broadcast came in at 34.4% and 21.6%, respectively.
While the streaming field is still dominated by established names like Netflix and Amazon Prime, the number of streaming services available to consumers continues to grow. Content owners are launching their own platforms and offerings from deep-pocketed technology companies such as Apple and Google are gaining footholds. While many of these platforms provide just on-demand content, a growing number of services are moving into offering live TV and cable channels, too.
What does this mean for the teleport operators to which content owners outsource the distribution of their high-value product? It means adapting at a speed they could never have imagined two decades ago and re-engineering their businesses to reliably and profitably deliver everything everywhere, all at once.
In a recent report – It’s Alive! How Innovation Enables Teleport Success in a Changing Video Distribution Market – WTA asked its media-market members how the business had changed, what that change required of them, and what they think is ahead. They told us:
Ever-changing End-user Demands are Driving Rapid Change
Customers today need networks to deliver every form of content in every way to their end-users as markets evolve. As a result, technology solutions are multiplying, prices are declining and contract durations are shrinking. Customers demand the launch of new channels in a matter of days. The pressure is on to manage capex downward and match opex to revenue while driving innovation forward. Best quote: “They want things that weren’t available five years ago. And some of the things they want, they don’t even know, but they want the system to be flexible enough that it can deliver these in the future.”
Software is Replacing Hardware along the Delivery Chain
Virtualization of hardware into software, and the rapid adoption of the cloud, are equipping operators to rise to the challenges of change. With this transformation, however, comes rising complexity in a market where transmission runs the gamut from satellite to CDNs to mobile networks. Best quote: “When we had physical assets, we could spend $50,000 on a particular unit. Then you need to make sure you use it enough to justify the cost. Now, in the cloud, it’s pay-as-you-go. You can spin up or spin down the channels as needed. We used to have a lot of equipment for OU. Now we can pay as customers use them. It enables us to be more competitive in the market.”
The Teleport Workforce Must Adapt to New Realities
The declining need for RF expertise is matched by exploding demand for IP and cloud skills. Engineers can find themselves stranded with administrative overhead to handle the cascade of change and need automation and reorganization to make the most of their skills again. Sales teams must learn to sell a broader range of capabilities and adapt to new customer demands at speed. Best quote: “They’ve had to learn. They’ve had to adapt and become proficient in all the latest and greatest technologies and platforms, including the public cloud. We’ve had to cross-train folks in engineering and cross-train in operations to stay efficient.”
Satellite Will Continue to Deliver Value but may Compete more with Ground Segment
The one-to-many economic advantage of satellite will continue to deliver value in media. To capture that value, satellite operators will continue to verticalize their operations, potentially putting greater competitive pressure on teleports. But their success in this complex business is by no means assured. Best quote: “Teleports need to adopt the right technology, have a good platform around it and use it in a dynamic fashion,” a technology provider executive said. “That’s what the satellite operators are doing, and if the teleport operators don’t do that, the satellites will take it over themselves.”
Predicting the Future is Getting Harder
Some companies are engaged in sophisticated planning exercises trying to envision their market and services five and ten years into the future. For others, planning horizons are shrinking instead, as flexibility and agility become the keys to survival. Best quote: “The evolution of broadcast delivery has changed how we manage our vendors, and how our vendors manage us. Sometimes, we provide the whole end-to-end solution. Sometimes, we are part of the end-to-end delivery. And sometimes, we are a small part—just the interface between larger parts of the ecosystem. But we are still part of a critical delivery mechanism.”
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Robert Bell is Executive Director of the World Teleport Association, which conducts research into the teleport and satellite industry and offers a Teleport Certification program to service providers. "It’s Alive! How Innovation Enables Teleport Success in a Changing Video Distribution Market" is available for free to members and for sale to non-members at https://www.worldteleport.org/store/viewproduct.aspx?id=20925249. He can be reached at: rbell@world
