Launching a TV Program Catch-up Service – Nippon Television Pt 1

The history of video distribution in the television, newspaper and internet media industries has not been a smooth one, from the dawn of the industry to the present day. There is a history of unknown challengers, the “Video Addicts”, overcoming various trials and errors and failures. In this series of articles, our interviewer Tsuchiya will look back over the history of various challengers over 12 articles.

THE MULTI-TIERED OTT MODEL: GIVING AUDIENCES THE POWER OF CHOICE

When launching an OTT service, one of the first major decisions you must make involves determining how you will monetize your content.

While some older, more established revenue models continue to be popular choices for OTT content providers, a few newer options are becoming increasingly prominent.

By leveraging a multi-tiered OTT revenue model, you can leave this decision up to your audience and give them the flexibility to choose how they want to pay for your content.

Read on to learn more about different monetization models, and the benefits of the multi-tiered approach.

COMMON MONETIZATION MODELS

Ad-supported video on demand (AVOD), subscription video on demand (SVOD), and hybrids are some of the primary revenue models commonly used by OTT content providers today.

Here’s a brief explanation of how these models differ:

  • AVOD. Viewers receive access to free content in exchange for watching ads.

    • Among some of the best-known ad-supported video services are YouTube, Pluto TV, Crackle, and many publisher sites, such as Conde Nast and Vice Media.
  • SVOD. Within this model, viewers pay a subscription fee in order to watch content.

    • Subscriber-supported video services make up the largest segment of the OTT universe and include some very big players, like Netflix, Amazon Prime Video, HBO Now, and Showtime. But SVOD also is home to hundreds of other providers, like Hallmark Movies Now and WWE Network—as well as a plethora of very small, niche providers, such as Curiosity Stream and Crunchyroll.   
  • Hybrid. Some OTT services have begun to adopt a hybrid approach—providing both a free, ad-supported service and a premium subscription offering. This creates a soft transition for converting an audience over to a subscription model. Providers can take this strategy a step further by offering tiered subscription models and gating certain content so that only users who are willing to pay a premium can access it.

    • Hybrid offerings are getting a lot of attention as the cost of content continues to soar, with smaller services looking to programmatic advertising as a potential incremental revenue stream. In APAC, telco PCCW has had success with its Vie OTT service, offering consumers a large selection of lower-value content that’s ad-supported, as well as more premium content on a paid subscription basis. In The United States, CBS All-Access and Hulu are good examples of a truncated hybrid model—offering a service based on a subscription PLUS advertising, or a higher priced subscription package with no advertising. As the name suggests, hybrid models can be quite flexible.

Both AVOD and SVOD come with their own unique benefits and challenges. For those viewers who cannot or will not pay to consume video content, the traditional AVOD option remains a popular and successful monetization model. AVOD allows for precise user-level targeting based on a wide array of attributes and online behaviors—making it an increasingly attractive option for advertisers. AVOD is also a good option to drive audience acquisition and combat subscription fatigue. For services with more established audiences, SVOD offers a more linear, predictable stream of income. SVOD is also an ideal business model for smaller services with tightly focused content and a willingness to gradually build their audience over time.

OTHER MONETIZATION MODELS

Today’s OTT service providers seek flexibility in their go-to-market approaches, and want to experiment with additional revenue models, including:

  • TRANSACTIONAL VIDEO ON DEMAND (TVOD). This model allows users to sign up for or download the service at no cost, but requires the purchase of content on a per-title basis. TVOD is popular for long-form movie content or live pay-per-view (PPV) content, such as sporting events and other live events, like concerts. Apple and Amazon, for example, offer customers the option to buy or rent titles, while WWE, UFC, and professional boxing are all using PPV extensively.

  • AUTHENTICATED VOD (AUTHVOD). This model often requires users to log in using credentials from another platform, service, cable (TVE), or cellular subscription in order to access content. For this reason, AuthVOD is valuable when coordinating with partnerships or managing multiple properties or branded services. However, AuthVOD can also refer to a free, ad-supported service that requires a viewer to create a login to view. The benefit to the end viewer is the ability to do things like make “watchlists” of content and “pause and resume” across devices. The benefit to the service provider is the ability to know more about the end viewer for marketing and advertising purposes.

BENEFITS OF A MULTI-TIERED PRICING MODEL

Offering a multi-tiered pricing model lets content owners give audiences the flexibility to choose which package works best for their viewing needs and cost limitations. By providing your audience with the power to decide how they want to pay for your content (and how much), you can make your OTT service engage more viewers—and optimize your revenue by leveraging more points along the demand curve.

This evolution from the high-priced, stacked-with-channels model into more custom-build viewing seems quite natural—as we’re currently witnessing the golden age of video entertainment. Today’s viewer has a lot of options to choose from, is more price sensitive, and is willing to pay for the content that he or she is passionate about. Many of the most popular channels are major networks; however, the bulk of the paid services consumers are willing to pay the most for are niche. Therefore, multi-tiered pricing will give more freedom and flexibility to the modern viewer in choosing a video service.

BRIGHTCOVE BEACON

At Brightcove, we see the value of a content owner being able to price and package their content in different SVOD tiers. In partnership with Accedo and Cleeng, we’ve added our new Multiple Package SVOD offering to Brightcove Beacon, which empowers our customers to provide varied levels of access to their content through different subscriptions. These multi-tier subscription capabilities add sophistication to our market-leading solution at no additional cost for our customers.

With this feature, Brightcove customers will be able to offer vertical or horizontal subscription tiers. Vertical tiers allow customers to sell separate subscriptions for different types of content, which they can bundle as they wish. For example, they can offer one bundle for movies and one for sports content. Horizontal tiers are broken out by volume of content—often referred to as Gold, Silver, or Bronze packages.

If viewers do not have access to a particular asset, they will receive a message that they aren’t entitled to that content and be prompted to click through to the associated purchase page for the asset in question—driving upsell opportunities.

In today’s crowded OTT marketplace, content providers must build and scale their offerings with their target viewer’s interests in mind. As today’s viewers value choice and seek an attractive, relevant value proposition, the multi-tiered OTT revenue model is an exciting new option for service providers to consider.

HOW TO LAUNCH AND GROW YOUR OTT SERVICE

Today, more video is being consumed online than ever before. In fact, according to the findings from our 2018 Global Consumer Streaming Habits Survey, 58 percent of global consumers stream content at least once a week via a connected TV—while 51 percent stream at least once a week on a mobile device, and 50 percent do so on a computer or laptop.

In order to thrive in this increasingly crowded OTT landscape, you must understand your audience well enough to deliver the ideal user experience—with an attractive, relevant value proposition.

Are you ready to be a leader in the OTT space? Download our first OTT Essentials whitepaper, the ultimate guide to launching and growing an OTT service. Read on for a preview of what the white  paper covers; then download the asset for more insights and inspiration on how to provide the optimal user experience—and keep viewers coming back for more.

LAUNCH WITH CONFIDENCE

When launching an OTT service, you must establish your own compelling content and distribution strategy.

Ask yourself the following types of questions to define your strategy—and determine how you will execute on it to achieve the best results:

  • Which genre(s) of content will you offer?

  • Who is your target audience?

  • What is your budget?

  • How will you program an efficient, scalable screen experience on connected TVs, smartphones, tablets, and desktop computers?

  • How will you get your content in front of your target audience?

Once you define your overall strategy, you’ll need to determine how you will monetize your content. Some of the most popular business models used by OTT content owners are ad-supported video on demand (AVOD), subscription video on demand (SVOD), and the Hybrid approach, which involves providing both a premium subscription offering and a free, ad-supported service. When deciding which model works best for your business, you should consider factors such as your content catalog, audience’s location, and marketing budget.

DRIVE AUDIENCE GROWTH AND PROFITABILITY

Once you have an established network of viewers, you’ll need to continually work to grow your audience. And, in order to do so, you must understand different OTT churn metrics and how to reduce your churn rate. After all, it doesn’t matter how many new users you acquire if they churn early or often. As a best practice, you should compare your churn rate with your conversion rate on a monthly basis. Using this data, you can determine where to focus your efforts: acquiring new users or retaining current ones.

As audiences around the world become increasingly accustomed to a premium, TV-like viewing experience, it’s also crucial that you incorporate new functionality into your service on a regular basis. By doing so, you can keep your viewers engaged—empowering you to drive revenue and profitability. Whether you decide to enable advanced casting or incorporate live channels into your service, be sure to conduct regular A/B testing to develop a solid understanding of what is and isn’t working when it comes to your viewer’s experience.

WHEN A VIDEO CRASHES THE PLAYER AFTER 19 SECONDS

In any complex software, bugs exist, and when working on a large project you encounter them on a regular basis. The more memorable and interesting ones are the ones that have a simple cause, presenting in unusual and sometimes bizarre ways. This bug started with a single video causing a player to crash. This is by itself not that rare a report, however, the following details definitely stood out:

  • It only happened with a single specific video
  • It only happened on Android (but only on certain versions of Android)
  • It always crashed the player exactly 19 seconds into playback

The video itself was being served to Android devices using HTTP Live Streaming, Apple’s standard for fragmented video delivery based on the m3u playlist format. For content protection, AES-128 with PKCS#7 padding was used. This is generally referred to as HLS Encryption (or “HLSe” for short). Other formats available for the content, such as MPEG-DASH, didn’t present the issue, neither did HLS with FairPlay DRM (or even no drm). The issue was even more specific than “this video”, it was “this video, with HLSe”

Luckily for testing purposes this bug was easy to reproduce in Google’s ExoPlayer demo app, and with a respectable selection of test devices on-hand, it didn’t take long to get error codes and stack traces out of logcat for various major Android versions. The specific errors varied depending on the version of Android on the device, but they all shared a common theme; notably that there was some issue decrypting the media in one of the video segments. The primary exception, and the most interesting “Caused by” exception further down the stack trace, were all variants of these two (differing in wording among the Android versions tested):

java.io.IOException: Error while finalizing cipher
        at javax.crypto.CipherInputStream.fillBuffer(CipherInputStream.java:104)
        at javax.crypto.CipherInputStream.read(CipherInputStream.java:155)
        at com.google.android.exoplayer2.source.hls.Aes128DataSource.read(Aes128DataSource.java:96)

Caused by: javax.crypto.BadPaddingException: error:1e06b065:Cipher functions:EVP_DecryptFinal_ex:BAD_DECRYPT
        at com.android.org.conscrypt.NativeCrypto.EVP_CipherFinal_ex(Native Method)
        at com.android.org.conscrypt.OpenSSLCipher$EVP_CIPHER.doFinalInternal(OpenSSLCipher.java:568)
        at com.android.org.conscrypt.OpenSSLCipher.engineDoFinal(OpenSSLCipher.java:385)
        at javax.crypto.Cipher.doFinal(Cipher.java:1476)

Diving deeper here, code-wise, is a bit of a rabbit hole. The core cryptographic code is written in C and is pretty intimidating if you’re not used to it. Luckily, that “caused by” has a nice readable type, notably javax.crypto.BadPaddingException, so that helps us narrow down the issue further; the problem is with the padding. As per the specification from Apple, the padding algorithm being used in HLSe is PKCS#7, which is described in RFC-5652 Section 6.3:

6.3.  Content-encryption Process

   The content-encryption key for the desired content-encryption
   algorithm is randomly generated.  The data to be protected is padded
   as described below, then the padded data is encrypted using the
   content-encryption key.  The encryption operation maps an arbitrary
   string of octets (the data) to another string of octets (the
   ciphertext) under control of a content-encryption key.  The encrypted
   data is included in the EnvelopedData encryptedContentInfo
   encryptedContent OCTET STRING.

   Some content-encryption algorithms assume the input length is a
   multiple of k octets, where k is greater than one.  For such
   algorithms, the input shall be padded at the trailing end with
   k-(lth mod k) octets all having value k-(lth mod k), where lth is
   the length of the input.  In other words, the input is padded at
   the trailing end with one of the following strings:

                     01 -- if lth mod k = k-1
                  02 02 -- if lth mod k = k-2
                      .
                      .
                      .
            k k ... k k -- if lth mod k = 0

   The padding can be removed unambiguously since all input is padded,
   including input values that are already a multiple of the block size,
   and no padding string is a suffix of another.  This padding method is
   well defined if and only if k is less than 256.

If you’re anything like me, that description is a little hard to picture in your head. So here’s a few examples (all padding to a 16 byte block size):

  • 88 7c 46 66 9a 2f a2 59 4d 1e would be padded with 06 06 06 06 06 06
  • 63 would be padded with 0f 0f 0f 0f 0f 0f 0f 0f 0f 0f 0f 0f 0f 0f 0f
  • f5 5c 6b 13 cf 54 f8 45 c1 ca 67 ec 50 20 12 would be padded with 01

Simple enough then; in plain English, the value of the padded bytes is the number of bytes being padded, up to the block size being used.

Armed with an understanding of how the padding should work, and an error indicating incorrect padding, the next step was to check the code handling the padding for the video. The service in question is written in Go, which doesn’t have an implementation of PKCS#7 in its standard library, so the service has it’s own implementation. Here it is:

PKCS7Pad(in []byte) []byte {
    padding := 16 - (len(in) % 16)
    for i := 0; i < padding; i++ {
        in = append(in, byte(padding))
    }
    return in
}

Short and simple… and no obvious mistakes. There are even unit tests which seem to assert exactly the behaviour we’re expecting. So perhaps we need some more clues. It was at this point a detour was taken to compare what our code was producing to other implementations. Luckily the AES-128 encryption applied to HLSe segments is applied to the entire segment file, rather than just to parts of the file contents, as can happen with other content protection schemes. Producing alternative encrypted segments was easily done with OpenSSL, and we could use our dynamic media packager to get a non-protected copy of segments to encrypt. With a segment downloaded in both clear, and AES-128 encrypted, an alternative encrypted segment was generated using the following command:

openssl aes-128-cbc -K $KEY -iv $IV -in clear.ts -out alt_protected.ts

Doing this revealed a new and interesting piece of information, the output of the encryption from OpenSSL was exactly 16 bytes larger than the output from our Go app (ie. one block). Perhaps the issue wasn’t in the padding, but some strange edge case where a final block wasn’t being added. Reviewing the Go code again with this new piece of information in mind, the following conditional started to look suspicious:

// If this block does not match the AES block size we need to pad it out
if bytesRead != aes.BlockSize {

At face value, the algorithm simply reads data from the input buffer in chunks of length equal to the block size. It then checks how many blocks were read and pads to 16 bytes if necessary. Finally it passes the 16 byte buffer into the cipher and streams the output to an output buffer. So realistically, we only expect this conditional to trigger on the final block, because that’s the only one that will need padding. After some back and forth, something started to become obvious; there’s a scenario that isn’t explicitly being handled…. what if the final block is equal in length to the block size? The Go code will simply do nothing, asserting that no padding is required. To be sure, let’s check the spec again:

the input shall be padded at the trailing end with k-(lth mod k) octets all having value k-(lth mod k), where lth is the length of the input.

So if k is the block size, and lth is the length of the intput, then a block of length 16 would need 16-(0 mod 16) bytes of padding. 16-(0 mod 16) equals 16… So actually this is supposed to have an entire block of padding at the end, with the value of each padded byte set to 16! Finally, a lead! Our Go code isn’t spec compliant!

Skipping forward somewhat through testing a patch against the same content presenting the issue, we finally get working playback past the 19 second mark in the video! Ultimately the fix was to rewrite the flawed conditional to instead pad the last block regardless of how many bytes were read. This resolved the issue once and for all!

In summary, all the odd characteristics of this bug report stemmed from the the unlikely reality that out of all the content we’ve tested with our system, this is the first time that a video (stored as a fragmented mp4, muxed into transport stream segments) has resulted in a segment having a length (in bytes) that was perfectly divisible by 16. Why 19 seconds into the video? Well the segments are 10 seconds long and it was the third segment with the incorrect padding. Why did the crash only occur on some versions of android, and seemingly no other devices? Well it seems like the majority of implementations are resilient to this mistake. The older versions of Android were susceptible, but more modern versions could handle it.

With all questions answered, and the bug fixed, there’s nothing left to cover except a few lessons learned:

  • Use existing, battle-tested implementations of standardised algorithms whenever possible.
  • If you do end up implementing one yourself, you need to be pedantic with the spec. Missing an edge case will cost you!
  • Even the really fun and weird bugs can have boring solutions.

THE SOCIAL VIDEO MASTERCLASS FOR BUSINESS

Scroll through any social network today, and it is quickly apparent that social media—and maybe the internet as a whole—belongs to video. By 2022, research suggests that 82% of global internet traffic will come from video. Billions and billions of those video views are coming from social media. Everywhere you look, content that used to be shared in a blog post or text post is now being shared in video format. And it’s no wonder—videos perform better and are more engaging than text-only or image posts across all the major social networks.

So how do you get a slice of that engagement for your brand? We’ve done months of research on what makes some videos perform better than others.

VIDEO ON TWITTER

Twitter is well-suited to audience awareness and engagement—especially if it relates to current events—so leverage brand stories and your most timely content. It’s also a fantastic network for brands who want to take a stand. Consider Gillette’s “We Believe” video ad—it generated 13 million views the first day it went live on Twitter, and was closing in on 30 million views within a week.

VIDEO ON FACEBOOK

Facebook is home to a totally different type of video content than Twitter. Users engage with videos of their families, causes they support, cute animal videos, and carpool karaoke. Keep in mind the type of content you’ll be surrounded by in this context, and produce videos that are innately shareable, down-to-earth, and personal.

VIDEO ON LINKEDIN

Video has taken LinkedIn by storm, and it’s a particularly valuable audience for B2B marketers. Think about it—45% of LinkedIn users are upper management, meaning they’re the decision-makers you want to target! Videos on this channel should provide professional value to the viewer: help them become better at their job in some way, whether it’s a video that shows them how to be a power user of your product, or a video that explains best practices in your industry.

VIDEO ON YOUTUBE

You didn’t think we were going to skip YouTube, did you? YouTube is now the second-most trafficked website in the world after Google, and it’s an excellent tool for being discovered through search (no accident, considering it’s owned by the world’s largest search engine). Long-form content is a natural fit for YouTube, since the average viewer sticks around for over eight minutes. Aim for a friendly, conversational tone and consider putting some of your company’s most engaging personalities in front of the camera. It should be fun to watch!

LIVE STREAMING ON SOCIAL

Live streaming is the next frontier for social media marketers. Some key best practices that apply across the board are:

  • Tailor your production level to the content. The most casual live streams can be just you and a mobile device. The most extreme involve broadcast-level set-ups.

  • Engage your viewers with specific calls-to-action. Example: A simple “Hit ‘like’ if you agree” can send your reaction numbers sky-high with minimal effort.

  • Stream for at least ten minutes. Most live streams pick up new audience members as they go, meaning you’ll miss out on viewers if you cut the stream short.

HOW HENNGE CREATED MORE VIDEO CONTENT WITH FEWER RESOURCES

If you are in charge of marketing or sales promotion, you are likely to face problems such as how to make use of leads that have stopped being followed up on, or production resource issues, but HENGE’s practical example shows that these problems can be solved by successfully introducing video marketing. The company focused on a new approach method, and without using any special technology or hiring new staff, they succeeded in reducing the number of “dead leads” that were piling up, mass-producing high-quality content, and automating lead qualification. How did they achieve this?

ISSUES: ACCUMULATING “DEAD” LEADS, LACK OF RESOURCES

HENNGE is developing various digital marketing measures with the aim of acquiring new inbound leads. In addition, in order to acquire more leads, they are also simultaneously implementing outbound measures such as cold calling. For the leads they gathered, sales representatives would quickly arrange appointments for initial visits, but after the initial visit, leads that were deemed to have a low probability of becoming projects were rarely followed up on. Due to the nature of the product, the percentage of leads that became projects was around 10%, and in fact, 90% of the leads were left unused and accumulated as “dead leads”. The company, which was aware of the issues and possibilities in this situation, turned its attention to a new approach method that combined video content and MA tools.

Measure 1: Utilizing existing content

In this situation, the company’s attention was drawn to the seminars it held several times a month. Hiroaki Mizutani of the company’s Cloud Sales & Marketing Division says, “The idea came from the simple concept that if we recorded the seminars and made the minimum necessary processing as video content, wouldn’t it be much easier to mass-produce content than to create white papers and web content? In fact, once we had decided on this policy, we were able to quickly put together a large quantity of content with a small amount of resources.” Because the seminars themselves were well-planned and well-developed for customers, they were able to produce a large quantity of high-quality content by making effective use of them, and at the same time, they were also able to solve the problem of human resources.

Measure 2: Automate distribution and accumulate insights


Once they had built up a library of recorded seminar content, HENGE needed to get it to the right audience. When considering a platform for distributing videos, the company’s main requirement was that it should be able to link with the MA tool “Marketo”. The company had also introduced Salesforce.com for CRM, so they also placed importance on being able to link with that. “If you just want to distribute videos, then a free video distribution platform will do, but by tracking who has watched how many videos and storing that data in a database, you can use it to your advantage in various activities. We looked for a platform that would make this possible and also allow us to develop it quickly.” If too many resources are taken up by sales activities, it will have an impact on the closing rate for high-quality deals. Therefore, a new dedicated inside sales team was set up to re-approach the 90% of leads that had been abandoned, and the MA tool “Marketo” was introduced as a system that would enable them to approach customers at the time they needed. In addition, by using videos, they are not only tracking each lead’s web browsing history, but also the viewing history of the video content they have mass-produced this time, such as “who has watched how much? they are able to determine when, to whom, and with what kind of conversation to approach each lead. The company places particular importance on the length of time spent watching the videos. Based on the hypothesis that leads who spend a certain amount of time watching the videos are highly interested in the service and have a strong desire to purchase, they prioritize making calls to leads who have watched more than 50% of the videos they have provided.

By tracking who has viewed what and storing this data in a database, it becomes possible to advance various activities in a favorable way.

Hiroaki Mizutani
General Manager, Cloud Sales & Marketing Division, HENGE Corporation

RESULTS: REDUCTION IN UN-FOLLOWED LEADS, AND TRIPLING OF INSIDE SALES TELEMARKETING SUCCESS RATE

Mr. Mizutani explains the benefits of this system: “When we call leads who have watched our videos, we get a good response from them from the very beginning of the conversation. The conversation flows more smoothly, and because the hurdle for sales activities is lowered, it becomes easier to get appointments, and our telemarketing success rate, which was 5% before, has risen to 15%.” After introducing Brightcove’s Video Marketing Suite (VMS), the company says it has gained value and satisfaction from being able to visualize who has viewed what, the ease of use of the UI and the time and effort saved on video uploads, the ability to categorize videos by content, and the ease of creating gallery pages. Those in charge of marketing and sales promotion tend to face problems such as how to make use of leads that have stopped following them and production resource issues, but the HENGE case study shows that these problems can be solved by successfully introducing video marketing.