Live from the OTT D2C Frontline: Part 1

Live from the OTT D2C Frontline: Part 1

By Olie Baumann, Head of Innovation, MediaKind February 24, 2022 | 5 min read
D2C, Direct to Consumer, DTC, Media

Media brands of all types and sizes are looking to build stronger and deeper connections with their audiences in the face of mounting competition from streaming services, social media channels, and even sleep. Building direct-to-consumer (D2C) services has become a hot ticket to engaging audiences with rich and often exclusive content while lifting the lid on a whole new range of opportunities for content monetization. Last year, Deloitte reported on the need for brands across all sectors to build out their D2C presence to directly interface with customers, pointing out that media companies are already in the late stages of this transformation and competing directly with standard broadcast or content providers.

Building out an OTT D2C service is one of the preeminent ways brands can keep their audiences loyal while increasing the value of their content. The MediaKind 2021 Sports D2C Forecast found that almost all the 40 sports rights-holders surveyed understood the importance of going D2C to reach their fanbase directly. However, you only need to ask one of MediaKind’s engineers to realize that building a D2C streaming service for sports rights-holders, franchises, brands, and event organizers can often be incredibly intricate, delicate, and multifaceted.

In this blog, I’ll explore some of the main challenges, considerations, and takeaways for brands looking to build a successful D2C service. And look out for part two of this blog over the coming week, where I’ll explore the latest technological innovations and evolutions in the D2C space.

No ‘One Size Fits All’ Approach

While the appeal of using the public cloud for broadcast and streaming media is now generally accepted, the market comprises a very wide range of organizations, all at different stages in their adoption of the cloud, and therefore with varying needs. A game distributor running a two-week e-sports tournament, for example, would have very different prior experience and requirements to a traditional sports league with on-prem production and distribution solutions seeking to add a cloud-based streaming platform to their offering. One size doesn’t fit all, and tailoring a cloud-based solution to the needs of the customer is a prerequisite.

A complete D2C solution can include everything from camera back-haul to the app on consumers’ devices. In between these two ends of the chain there are several building blocks. These include production, contribution network and interconnect to deliver produced content into the cloud, live transcoding and packaging, storage and transcoding of VOD assets, CDN, the TV platform enabling content discovery and subscriber management, and the client applications which need support and an ever-increasing number of devices. Customers may already have several of these elements in place, with some being on-prem and others already running in the public cloud with a cloud service provider (CSP). The commercial relationships media businesses have with a CSP may initially be driven by the geographical location of data centers (proximity to production or distribution). However, over time, once contribution interconnects and CDN hand-offs are established and back catalogs are stored on one cloud provider, it becomes increasingly difficult to transition to a competing CSP.

Solution Flexibility is Key

Being able to offer a solution with the systems and workflow the customer requires on their chosen cloud platform is often essential. For some customers, where they purchase a service comprising a public IP address to stream their content to and a URL to get the packaged ABR output, a full SaaS workflow is perfect. For other customers with an existing subscriber base of many set-top boxes or software applications deployed on multiple platforms, it is not. In such cases, great care must be taken to manage all the interfaces and ensure that those subscribers experience a seamless transition to the new platform.

D2C service deployment is made a lot easier through an end-to-end solution that covers production, streaming, and audience engagement. In these scenarios, the technology vendor manages the SDK, streaming platform, and encoding, making it easier to control the end-to-end workflow. This, in turn, guarantees a great end-user experience. It also streamlines the lifecycle management of the device or application, allowing changes in encoder software to be tested with the client SDK before being delivering into the customer’s production environment for example. This not only mitigates the risk of any upgrades disrupting the overall workflow, but also allows new features and functionalities to be realized and operational more rapidly.

Challenges in the cloud

The cloud wasn’t initially conceived for media applications; indeed, it is only relatively recently that general purpose compute has been capable of meeting the real-time demands of broadcast quality audio and video encoding. The main challenges of operating a D2C service in the cloud are delivering your streams into it and monitoring what’s in there. Understanding the responsibilities within the cloud also becomes hazed when shifting to a multi-vendor, managed cloud service. Operating alongside third parties in a data center managed by the third party means you need to understand where the boundaries are in terms of support.

A new approach to cloud-based deployments that makes constructing OTT D2C services far simpler is through managed cloud applications (MCAs) -something my colleague, Richard Mansfield, has written about in length in previous blogs. Building a D2C service through an MCA means the vendor runs its software on the customers’ cluster. This offers an incredible amount of flexibility for the customer, such as the ability to choose their own CSP, and utilizes their existing public cloud investments and credits that are available through purchases such as Office 365.

When using this approach, we always need to be aware of who owns responsibility for when certain things go wrong. Without that clarity, it’s very difficult to understand where the boundaries lie and who is culpable for errors within the cloud service. We have come to appreciate a more collaborative relationship between software vendors, like ourselves, and cloud providers in identifying and fixing customer affecting issues. This in turn changes the contractual way in which we work when the cloud contract belongs to the customer yet is operated by MediaKind.

Tackling media in the cloud

Understanding the shift towards software-based applications also changes how you derive your service level agreement (SLA) for software. For example, when selling encoding software on an appliance for installation on-prem, MediaKind holds itself to a period of outage, measured in seconds. If a channel goes ‘off-air’, we guarantee that channel is swapped to another “spare” box and back on-air within that period. So, a customer’s fail-over time is measures against their SLA – that model doesn’t apply directly in the cloud. In the cloud, the term availability is used to describe what percentage of time a service is up (often quoted as “number of nines” e.g. 99.99% is “four nines”. For media workflows, particularly for ephemeral, event-based services, this availability is hard to quantify. What does availability mean for a media service? How does that translate to a contractual agreement? Service availability is dependent on many components with different responsible parties – for example, if we don’t get an input, we can’t give an output.

These are just a few examples of how established ways of doing things in the public cloud don’t always fit like-for-like within media workflows and, conversely, established ways of managing media workflows are sometimes less applicable in the cloud. They require close collaboration and continued partnerships to establish the best ways of working and helping our customers take new D2C services to market in rapid time, rich with features and add-ons. As the D2C market continues to flourish, the nuances of developing and operating D2C streaming platforms will be resolved, leading to faster deployment times and more awesome and compelling services.

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