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Monetizing networks

Television is clearly entering a new phase. The widespread growth and global adoption of smartphones, tablets and improved mobile access have forever changed our video consumption habits. Over the course of just a few years, watching TV has leapt from the living room into the palm of our hand. This always-accessible video experience, which follows us everywhere we go, is driving the increase of Internet traffic with exponential force.

In this increasingly mobile world, video subscriptions delivered via OTT services have assumed the spotlight and are fully embraced by viewers around the world. The continued success enjoyed by these new service providers is posing critical challenges to traditional network owners and third-party services as the revenues they generate are outweighed by the costs of the investment needed to deliver them.

Our devices will only keep getting smarter, and the amount of content we consume only continues to increase. Add to this viewers’ rising expectations for stellar picture quality with online video, and you have the perfect storm of demand and delivery.

These disruptive trends are true game-changers for our industry. Service providers are now facing a challenge to find new methods of monetization, not only in terms of acquisition and the processing of high-quality content, but also in the way they support the efficient delivery of large volumes of video, media and audio content across multiple platforms to multiple devices.

With such challenge comes great opportunity, and no other player within the media value chain is in a more ideal position to grow his or her business in this changing landscape than the network operator. Only the operator has the level of user awareness and control over quality necessary to garner the type of future experience viewers will grow to expect.

Leveraging your network

According to Ericsson’s latest Mobility Report, published in June 2013, network traffic is being dominated by video, and such traffic is expected to grow by a rate of 60 percent annually through 2018. At such a growth rate, investing in backbone alone is no longer a sustainable model for operators to scale for the amount of bandwidth needed. These trends beg for intelligent caching systems to offload all types of network traffic. Indeed, the analyst group Informa Telecoms & Media predicted last year that the CDN marketplace will be worth approximately €3.47 billion by 2017, with video the largest contributor to commercial CDN growth.

To date, CDN systems have been largely absent from mobile networks, and content delivery systems for fixed networks have been siloed, providing separate platforms for the caching of managed and unmanaged content. As the global viewer shift towards broadband mobility continues its inevitable growth, network operators need to become increasingly aware of the importance of developing an all-inclusive approach that encompasses the entire content delivery and distribution system from content to viewer.

Through extensive examination of the market, there are four key components of a system that every operator needs: a CDN for the caching of managed content, transparent Internet caching (TIC) for the caching of unmanaged/OTT content, content acceleration and prioritization for decreased latency and delivery of premium quality content, and service exposure for the ability to rapidly create value-added services. When these components are unified, the result is a system that provides control, agility, efficiency and service velocity that enables new types of monetization needed today and in the future.

Tapping into the value of quality

There are several opportunities for monetization that arise from the quality of experience that stems from a unified approach to content delivery. The ability to guarantee the quality of content delivered is in itself a proposition that is immensely valuable to both viewers and content providers. Content acceleration and content prioritization are two more valuable abilities that operators bring to the table.

For instance, sometimes when viewers watch content, they experience increased load times, or latency. This is problematic because viewers will often abandon the content they were trying to watch or the transaction they were trying to make if they are forced to wait for even a second. This has a rebound effect on the content provider or retailer. Just a fraction of a second increase in load time can decrease a site’s traffic and ad revenue significantly. However, through collaboration with the operator, the provider’s content could be accelerated, providing a better user experience for viewers and greater revenue for the content provider.

Ericsson has also found through its annual global TV viewer research into TV viewer behaviors, representing the views of more than 400 million viewers around the globe, that quality is the service viewers are most willing to pay for. If a content provider wanted to offer a new premium level of content (Blu-ray, 4K, etc.) and monetize it, they would need to guarantee that quality. Only through collaboration with the operator can the content provider prioritize that content to ensure a quality level of delivery. Prioritization doesn’t diminish or squeeze any existing path, but rather creates an additional accelerated path, like a content toll road. This valuable ability can both raise the profile of the provider’s brand and be enjoyed by viewers at a premium.

Operators already have these opportunities (content acceleration, content, prioritization and the ability to guarantee quality of experience) within their existing networks; they simply need to apply a unified content delivery approach in order to increase their ability to channel the value of such abilities for greater monetization.


Based on ConsumerLab studies, Ericsson has found that personalization is one of the most important elements of viewers’ ideal TV experience. Network operators already have an intimate relationship with viewers (fixed network operators at a household level, and mobile network operators at an individual viewer level), and it is an area that can be leveraged rapidly to generate a greater and more personalized user experience.

The value of location as a monetization method is of crucial importance, with more than 800,000,000 GPS-enabled devices already being used across the globe. Location is largely brokered by aggregators. These aggregators acquire the data and sell it to the provider at a commission, which enables location-based services to flow through the network and to viewers. But for the security of viewers, the data that operators share with location brokers isn’t granular enough for many of the sought-after consumer applications, such as retail geo-fencing, for example. If, however, an operator could offer this service directly, the provider can acquire more sophisticated location data, which can significantly serve the type of location-based apps viewers crave.

Operators can also monetize their networks through specific and targeted advertising, which not only benefits the operator and advertiser, but also provides viewers with more relevant, meaningful and convenient experiences. Advertising via operator collaboration is not limited to a basic banner or pre-roll, but rather comes in the form of saved user steps such as recommendations, intelligently generated search terms and the offering of relevant links. This form of targeted advertising generates increased subscriber satisfaction with the experience, and thusly with the provider and/or advertiser’s brand.

Changing the game

As the shift toward mobility progresses, the moment to deliver an efficient and flexible unified CDN will become ever more pressing. Operators must learn to adapt to this changing landscape while leveraging their unique values to overcome the complexities within the industry today and realize new and more secure revenue streams for the future.

Simply delivering content will no longer be the mark of a successful CDN. A CDN must now be synonymous with immediate delivery of guaranteed HD content at a highly efficient rate. Today, the industry is increasingly recognizing the importance of this, shifting KPIs from basic network performance toward the quality of the experience itself.

A unified CDN (delivery control of both managed and unmanaged content, across both fixed and mobile networks) enables operators to maximize the ability and value of their own network. This reinforced infrastructure complements the traditional global CDN by adding awareness, intelligence and control that spans the entire length of the media value chain. Through this system, operators will gain not only the ability to differentiate their service from the on-demand packages currently available today, but also the ability to offer significant value that both subscribers and providers are willing to pay for.

Lisa Skelton is head of marketing, TV Content Delivery, Ericsson.