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Optimizing OPEX Through Unified Solution

[email protected] © Tata Elxsi 2019 1

OPTIMIZING OPEX THROUGH UNIFIED SOLUTION

K Sarvanraja Nadar, OTT Practice Head, Tata Elxsi

Optimizing Opex through Unified Solution


CONTENTS

ABSTRACT ...................................................................................................................................................... 3

Introduction .................................................................................................................................................. 4

Challenge: Diversification of ServiceS with Opex Optimization.................................................................... 4

Unified Solutions Key Enabler for TCO optimization .................................................................................... 5

Centralized VoD Processing ...................................................................................................................... 5

Unified Back End Systems ......................................................................................................................... 6

Global Application Development Center .................................................................................................. 9

Conclusion ................................................................................................................................................... 11

ABOUT Tata Elxsi ......................................................................................................................................... 12



ABSTRACT

Media & Entertainment industry is continuously facing changes at a high pace. The consumer preference is increasing towards ON-Demand over schedule viewing. This continues to put pressure on traditional providers (Satellite & Cable), as lesser consumers believe their traditional TV providers can offer them all they need. The Increase in consumption of ON-Demand content leading to mergers and acquisitions, traditional providers entering into OTT Service delivery and Media Production house taking contents direct to consumers. Acquisitions bring in duplication of the systems and resources. In most cases, traditional providers create new systems to meet new business requirements, which perform similar functions with the latest technologies, leading to high Opex. As competition is growing in the industry, it becomes important for organizations to optimize the Opex in the best possible way without interrupting the business offering. Whether you are Traditional broadcast and cable operator, you have acquired multiple services providers in different regions or you are entering into full OTT Service from a companion OTT App, this white paper outlines three strategies that will enable Technology and Business leads to reduce to OPEX,

while preparing successful OTT Offerings.



INTRODUCTION

Merges and Acquisitions are inevitable considering the competitive marketplace and dynamic changes in the consumer consumption trends. Expanding into emerging business is important for sustainability but huge investments and drastic changes in the existing systems and platforms are difficult to make. Hence, it is obvious to start isolated systems to start an emerging business, which once grown creates huge outflow in Opex considering the duplication in the resource, similar functional systems. Emerging business grows to a commendable consumer scale and competition forces operators find ways to optimize the Opex. It becomes important for technology and strategy groups to look into synergies in the platforms, service offerings and possibility of unification of commonality and similar functional areas. This can carry more than 30% financial savings of the prevailing Opex outflow.

CHALLENGE: DIVERSIFICATION OF SERVICES WITH

OPEX OPTIMIZATION

The ascent of advanced media players, for example, Netflix, Amazon, Apple TV, Roku, and Boxee, etc. are

testing the customarily kept up matchless quality of the TV as the fundamental diversion center.

Online media utilization has demonstrated gigantic development in the course of recent years, the

expansion in the number of mobile devices is making it simpler for customers to get to music and video

content anywhere, anytime.

Driven by this trend, typically a PayTV provider offers companion OTT app, which is not true in terms of

OTT, wherein consumers use their PayTV accreditations to access content directly from the Content

providers or just Catch-Up service as value-added service. While a separate OTT service offering exists by

same Content/PayTV provider, build as separate business or through strategic Acquisitions. Like

MultiChoice in Africa, offers DSTVNow OTT companion app and has ShowMax as OTT app or A&T, Warner

has independent OTT apps in the market.

Figure 1: Media Industry Trends



These bring their own challenges like each app will have its own ecosystem on which is running. Hence,

there will be multiple platforms performing similar functions, duplicate workflows for content ingestion

and service offerings. This leads to lot of duplication of the customer’s insight data, difficulty to analyze

and target accurate monetization model.

Different teams functioning similar roles and

responsibilities, on independent systems causing

resource and workforce duplications.

Increment in the devices through which the OTT

application can be viewed has caused the interest

for all the OTT applications accessible on these

devices. This results in operators to build different

teams to address a multitude of devices, increasing

the Opex to reach the customer volume.

UNIFIED SOLUTIONS KEY ENABLER FOR TCO

OPTIMIZATION

Centralized VoD Processing Extending OTT service through the Centralize Video Processing, which can address both Broadcasting

needs and OTT needs, will help reduce the Opex.

To offer the Linear Channels can typically be feed from the existing encoder of the Broadcasting systems

into OTT video processing solution for transcoding it into multiple profiles for OTT Service distribution.

The Cloud-based OTT Transcoding solution helps to maintain the Opex based on the growth. In addition,

it offers the benefits of auto-upgrade and ready to scale.

The service provider who owns the broadcasting content can integrate the OTT video processing with its

existing Media Asset Management system for ingesting contents as VoD. In the OTT Client, it can be

programmed to treat these contents either as an Episode based VoD or Catch-Up TV associated with

respective TV channels. Avoid using DVR based solutions to offer Catch-Up TV as such systems increase

the Opex and point of errors. You may not be able to offer DVR on the Linear channel, however, the

consumer trend shows Users prefer On-Demand viewing over scheduled Viewing

For Live event such as sports event offering reusing the same highlights generation setups and interfacing

it to OTT Video processing system will reduce duplicate efforts and Opex.



If you are redistributing the linear content, using automated tools with manual supervision/QC to slice

respective episodes/series will help to convert linear assets into VoD faster and at lower Opex. It can be

used as Catch-Up TV. It will further reduce the Opex in the long run if this workflow is implemented in the

CMS system used to manage and create OTT Service.

Unified Back End Systems Unified Back End System can reduce the Opex up to 30 % to offer OTT services in different business

regions. It brings an integrated approach for Meta Data management, Content Management, Subscriber

management, Analytics, Content Discovery, and Monitoring. Architecting the Back End systems to support

Multi-Tenancy will reduce the overall infra expense.

Figure 2: Cenralize VoD Processing

Figure 3: Centralize VoD Processing with CMS



If operator intent to offer service in multiple regions, with different business models, considering each

region as a Tenant/ Business Unit and logically mapping each sub-system (CMS, OTT Middleware, SMS,

Billing, UI Composer, DRM, Big Data and other ecosystem components) will help to build lean operational

organization and reduce the Infra Opex.

For example, while ingesting content the CMS should have options to select the Business Units /Region

the content service is offered. As content becomes more global, the same system can address different

regions.

As acquisition brings its own challenge, with their own focus and own OTT platform capabilities it becomes

important Group Technology Heads & Technology strategists to heavily involved in assessing and defining

which of these capabilities should be brought together, as an end-to-end solution meeting the business

needs of all the offered service and any new OTT service launch in pipeline.

All platforms that offer similar functions should be unified and re-architected to support Multi-Tenancy.

Single functional workflow with options to select & configure services based on Business Unit/region

should be developed on the best capable, among the existing platform.

Figure 4: Multi-Tenancy Sub System



One of the challenges in this approach is it will require a delta investment to unify and re-architect the

platform. However, analysis says in the long term it has the potential to reduce 30% of the existing Opex,

which is a significant reduction.

Cloud gives the flexibility to manage the platforms from the remote location, while services can be offered

in different regions. This also enables to bring in an outsourced model or building the low-cost offering of

operational activity.

Figure 5: Multi-Tenancy Platform

Figure 6:Indicative figure; It will vary from operator to operator



Global Application Development Center Moving from a device-centric development approach to OS Platform centric approach will bring

substantial savings on the clients’development spending. Based on the business unit the apps will have

service offerings that can be managed through back end systems.

Building Global application development center will enable efficiency in the platform-centric approach.

Which will have common function as horizontal team structure like Product Management, UI/User

Experience, and Testing and DevOps/release management

While the Application Delivery team consists of Core and flex team. Core team focusing on the Common

features across the Business Unit/Region and the flex team adding business unit/Region centric

customizations that will be tested by common Testing team to maintain the common Quality across the

services offering. Supported by DevOps/release management team adhere to single process and bring in

efficiency thus reducing the duplicate efforts.

Figure 7: Global Application Development Center

Figure 8: Global Application Development Center Approach



During the initial stage of such transformation you will observe an increase in the expenses to run parallel

work and migration to new structure. However in the long run it will help reduce overall TCO

All these areas of consideration and its implementations vary from case-to-case and it’s a complex activity,

which needs outsider view to implement efficiently. Hence involving a neutral third-party consulting

organization, having experience from traditional to OTT technology consulting will be beneficial.

Figure 9: Indicative figure; It will vary from operator to operator



CONCLUSION

Traditional media companies are concerned about the existing streaming companies. While these traditional companies compete to sustain in the market, it also opens up opportunities to extend their services by diversifying into media business and explore new revenue streams through mergers and acquisitions. Mergers and acquisitions result in duplication of the frameworks and assets. In most cases, traditional suppliers make new frameworks to meet new business necessities, which require comparable capacities with most recent innovations support. Having the right solution will help the operator reduce Opex which becomes critical to focus and beat market competition. Centralizing VOD creations, Unified backend, and Global development centers will reduce Opex cost significantly. The collaboration could be key to success to establish new ways of operating to roll out the services in this competitive marketplace.



ABOUT TATA ELXSI

Tata Elxsi is a global design and technology services Company. Tata Elxsi works with leading MSOs, content providers and studios to develop innovative services and applications that create subscriber stickiness and drive revenue growth.

This is backed by over 25 years of design and engineering experience and deep specialization in video and OTT engineering and service delivery, a global delivery presence and offshore development centers in India. TEPlay is an all-in-one platform, that relies on fully integrated technological building blocks, thus accelerating the launch of a next-generation OTT platform for Content Owners. It offers SaaS- based pre-integrated OTT Backend components (CMS, SMS, OTT Middleware, Usage Analytics, Content Discovery, UI Composer, Ad Tech Solutions, Whitelabelled Apps) for faster deployment of OTT Services. TEPlay is backed with powerful analytics to improve engagement and make content more discoverable. For more information, please visit www.tataelxsi.com

REFERENCES

1. TV and Media 2017 – Trends and Insights (https://www.ericsson.com/en/trends-and-

insights/consumerlab/consumer-insights/reports/tv-and-media-2017)

2. Rise of On-Demand content – Technology media and communications

(https://www2.deloitte.com/content/dam/Deloitte/in/Documents/technology-media-

telecommunications/in-tmt-rise-of-on-demand-content.pdf)

https://www.tataelxsi.com/

https://www.ericsson.com/en/trends-and-insights/consumerlab/consumer-insights/reports/tv-and-media-2017

https://www.ericsson.com/en/trends-and-insights/consumerlab/consumer-insights/reports/tv-and-media-2017

https://www2.deloitte.com/content/dam/Deloitte/in/Documents/technology-media-telecommunications/in-tmt-rise-of-on-demand-content.pdf

https://www2.deloitte.com/content/dam/Deloitte/in/Documents/technology-media-telecommunications/in-tmt-rise-of-on-demand-content.pdf

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