Content Owners Say Amazon Is Considering A Live OTT Streaming Service

Over the past few months, multiple content owners have told me that Amazon has been quietly asking them about licensing content for a live streaming service. While none of the content owners want to go on record, or will discuss how far along Amazon is with their plans, other companies involved in the video ecosystem also confirm that Amazon is looking at potentially offering a live OTT video service of some kind.

Considering Amazon already offers an on-demand Prime Video streaming service, it’s would not be surprising that they would also look at the economics of offering live content, just like every other OTT provider is probably doing. But what makes this Amazon story even more interesting is that Amazon recently agreed to acquire Elemental Technologies, a company that offers a cloud-based platform for ingesting, encoding, protecting and packaging live linear streams. While Amazon has already confirmed they plan to integrate Elemental’s live linear platform into their AWS platform and offer it as a service, acquiring Elemental will also give Amazon their own in-house platform needed to make an Amazon branded live OTT service possible.

This also might explain why Amazon would pay so much for Elemental, with rumors of the sale price valuing Elemental at $500M. (Note, I haven’t been able to confirm the $500M number is accurate) In 2012, Elemental disclosed they did $21M in revenue. In 2013, revenue grew to $32M and in 2014, revenue was projected to be over $50M. Insiders say Elemental is on a run rate to do close to $100M in 2016. So if the rumors of Amazon valuing Elemental at $500M are correct, Elemental is getting about 5x projected 2016 revenue, a rather high valuation, unless Amazon is also placing value on them for other reasons, like the ability to power their own live OTT service.

Those I have spoken with haven’t disclosed how far along Amazon is with regards to a live OTT service and it’s possible Amazon is simply looking at the economics of the business, which would involve them talking with content owners about costs. That alone is no proof that they plan to bring a live OTT service to the market anytime soon, but the purchase of Elemental adds to the intrigue and it could be that Amazon is doing more than just thinking about a live OTT service.

Conviva Unveils Industry Portal Benchmarking QoE Metrics For Video

Conviva has released their Industry Data portal, which provides analysts and the general public access to video quality and engagement metrics by quarter, by region, by content type and by device. The Industry Data portal provides access to quality and engagement data for streaming video, which was only previously available to a small group of insiders. Unlike traditional audience measurement estimates provided by Nielsen or comScore, Conviva’s portal focuses on quality and experience metrics—such as video startup times by region, the average bitrate by device, and the rebuffering ratio by content type—across device categories of desktop, wifi, tablet, and connected TV devices.

Screen Shot 2015-10-02 at 12.00.03 AMThe source of the data is comprised of Conviva’s global intelligence network and includes data from premium media companies including HBO, ESPN, Viacom, CBS, Sky, Foxtel, and Yahoo. This information can be used to assess performance of Internet delivered video for benchmarking purposes, for geographic expansion, or for evaluation of the success of an OTT offering. Conviva has made it simple for analysts and others to download the data so that business analysts might draw high-level insights into the performance of streaming videos. Conviva gave me some additional details on the data collected and the methodology:

  • Methodology — processed data for the quarter using Conviva’s real-time Big Data platform
  • Data — will have historical data as well as those for the most recent quarter-end
  • Anonymized and segmented by device, region, and content type
  • What’s being measured — Quality of Experience, Engagement and Audience metrics, including VST, exits before video start, re-buffering ratio, playtime, bit rate distribution
  • Source of Data — all companies within Conviva Global Intelligence Network, including premium media companies such as HBO, ESPN, Viacom, CBS, Sky, Foxtel, Yahoo
  • Periods — quarterly starting from Q4 2014 (should be available soon — Q1 2015 is there now) to the present
  • Devices — Conviva separates the data by desktop, mobile – wifi, mobile cellular, tablet wifi, tablet cellular, TVs/TV devices

The data which Conviva provides to paying customers is much more in-depth, which applies to all dimensions stated above. From an aggregation perspective, Conviva wanted to provide actionable, insightful information about QoE for the OTT industry, which is info that many OTT providers don’t share on their own. There is some good data in their portal that you can check out at

Amazon Sticks It To The Competition: Will Stop Selling Apple & Google Streaming Boxes

Amazon has announced they will stop selling streaming boxes and devices from Apple and Google including Chromecast, Nexus Player and Apple TV. Marketplace sellers are no longer allowed to list new streaming boxes/sticks from Apple and Google and current products will be removed for sale on October 29th. Amazon says they have made the decision to stop listing these items for sale since they don’t currently run Amazon’s Prime streaming service and that Amazon wants to “avoid customer confusion”.

While that sounds like a weak excuse on Amazon’s part, we don’t know all of the details and it could be that Apple and Google won’t allow Amazon on their devices. If that’s the case, it makes sense that Amazon would fight back by pulling Apple and Google devices from their store. Amazon makes very little money on devices that cost $35 and $99 dollars, so the decision isn’t based on revenue. It’s a strategic decision on Amazon’s part. But it does hurt Amazon’s customer experience as one of the main reasons I shop at Amazon, is due to their selection. Having less inventory is a bad thing for Amazon overall.

While some have suggested that this will impact sales for Apple and Google, it really won’t. With Apple having their own stores, and Chromecast being sold in every store imaginable, consumers won’t have a hard time getting them. Makes it a bit of an annoyance for someone like me that shops at Amazon, but if I really want an Apple TV or Chromecast, my local Staples will have them, as well as many other stores.

But this is an interesting development to watch because if this is really about avoiding “customer confusion”, does Amazon plan to stop selling Smart TVs that don’t support Prime streaming? What about Blu-ray players? How far is Amazon going to take this? My guess is that Amazon only cares about devices made by Apple and Google and those will be the only devices that are impacted. If that’s true, it means this isn’t about avoiding confusion at all, it’s simply Amazon flexing their power against their competitors. But the real question we all want to know the answer to is if Amazon made this decision on their own, or if Apple and Google forced their hand. I’m sure something will leak out at some point and we will hear more details behind this decision.

Updated 10:17pm ET – One of the two companies mentioned reached out to me to after I published to tell me that they are not blocking Amazon from being on their box. They won’t allow me to quote them or say which of the two companies it is, but it appears this is purely a decision driven by Amazon alone.

iOS 9 “Picture-in-Picture” for iPad: Easy To Use And Easy To Build

Haystack TV PiP 1“Picture-in-Picture”, the iPad only feature that comes with the iOS 9 update on newer iPads, is a new multitasking tool that requires minimal effort to integrate on existing video apps. This is also the first time Apple is introducing true multitasking on iOS, and it is unlocking exciting new opportunities and use cases for app developers. I’ve just started seeing some content owners take advantage of it and it looks as if it will quickly become a standard feature.

For users, using PiP is seamless. It works automatically without requiring any activation. While in an app, simply press the home button and the video will minimize to the bottom corner of the iPad screen. You can then expand the size of the video box and move it around and reposition it. This is a significant new feature especially for video streaming apps. In talking with Haystack TV, a video news platform, the company has already taken advantage of PiP where news clips will now play continuously while users are multitasking outside of the app. For example, users can check their email while watching the news or even search the web for more background information on a particular news clip that’s playing in PiP mode.

For iOS developers, the integration is easy if you use AVPlayerViewController or WKWebView. As long as the user has the video playing full screen, the support for PiP is available without requiring further development. Keep in mind that with all implementation, developers will need to set the media AV session to AVAudioSessionCategoryPlayback to enable their app to run in the background. For those using AVFoundation, the process could be a little more complex and may call for a AVQueuePlayer to ensure video clips continue to play sequentially in PiP mode. You would also need to make use of the AVPictureInPictureController to handle the controls and state changes for starting and ending PiP. It requires a little more work but should not create too much of a roadblock.

This new iPad-only feature essentially mirrors how users are using their home TVs – watching video on the big screen while also utilizing a second screen to browse or interact with others on social media. According to an Accenture report, 87% of consumers use more than one device at a time. Bottom line, it’s a feature that could significantly improve user experience while not requiring too much effort to build.

Next-Gen Video Needs Next-Gen Audio: But at What Cost to License?

Over the past few weeks, everyone in digital media circles has been talking about the HEVC/H.265 video coding standard including who’s adopting it, how much it will cost to license and what the launch of the Open Media Alliance might mean. The spotlight on video has burned so bright that next-gen audio has not been covered at all. This relative obscurity is unwarranted, however, given both the complementarity of these two next-gen technologies and the imminence of important standards-based decisions.

There have been dramatic technological improvements in audio ready to be broadly deployed and adopted to support the advanced video features about which everyone is talking. As consumers flock to update their home theaters, and also their mobile devices, the pressure is on to deliver something that also sounds fantastic. And 3D audio delivers that perfect complement to 4K UHD content.

Using 3D audio, sound sources can be placed in virtual locations. This allows audio to sound as if it is coming from any direction—such as from behind, above or below a listener—regardless of the location of the speakers. Proponents of 3D audio describe it as an “immersive technology,” and for anyone who has experienced it, it seems almost unreal, clearly a step-change in user experience.

As with any new technology, a “Beta vs. VHS” watershed moment for adoption is likely to happen. For 3D audio, that moment could be a decision expected this fall concerning “ATSC 3.0” by the Advanced Television Standards Committee. By way of background, the ATSC is a global nonprofit whose membership includes broadcasters, electronics manufacturers, broadcast equipment makers, regulators and related experts. ATSC ushered in the era of digital television, and its new standardization process is being watched closely by many industry observers for TV and beyond. Its 3.0 audio and video selections will potentially be deployed in billions of devices and content titles over the next decade. For video, the main contender is HEVC. For audio it’s up for grabs, with MPEG-H 3D Audio and AC-4 vying for adoption. Another technology, DTS had been in contention as well, but it has been withdrawn from ATSC consideration.

The ATSC’s decision on audio is expected to occur in October, and a host of technical issues are being debated and carefully evaluated concerning, among other things, readiness for adoption. But as anyone familiar with standards would tell you, however, it’s not only about technical features and readiness for adoption. A major issue to be discussed and debated by the ATSC and certainly by industry relates to intellectual property rights and to licensing. The business model supporting a large number of innovations in the audio and video industries consists of sophisticated R&D outfits investing heavily in creating improved generations of technology (and, of course, patenting the resulting inventions), and then licensing those technologies and intellectual property to industry adopters.

The Dolby AC-4 technology is standardized through ETSI and Dolby has submitted a licensing declaration to ETSI. Just last week Dolby published some details on their program and pricing. To get some more details about all of this, I spoke to the experts at Black Stone IP who track the audio licensing market very closely. Elvir Causevic and Ed Fish from Black Stone IP told me that from their review of ETSI declarations, “it appears that Dolby is the only one with patents covering AC-4 technology”. This is consistent with Dolby’s history, where they traditionally have all, or nearly all, of the patents required for their technology. The announced licensing rates at high volume, for the entire system (plus software, support, etc.) is at $0.15 for mobile devices.

As concerns MPEG-H 3D, this Audio standard was developed by the ISO/IEC Moving Picture Experts Group (MPEG), and the normative requirements were formalized as the MPEG-H 3D Audio Main Profile. Black Stone IP recently published a research report utilizing publicly available data, including available patent and pricing information, to arrive at an estimate of what licensing the MPEG-H 3D Audio Main Profile will cost.

Black Stone IP says that for MPEG-H 3D Audio, the implementation of the full standard in its “Main Profile” requires incorporation of six underlying standards, meaning that licenses may be needed from numerous patent holders and even patent pools in the U.S. and around the world. Those six standards are HE-AAC, MPEG- Surround, SAOC, USAC, MPEG-DRC, and finally the specific “new features” unique to MPEG-H, such as “higher order ambisonics.”

Black Stone IP has estimated that the aggregate MPEG-H 3D Audio Main Profile per-unit royalty payment, for a low-volume product, in the 500,000-unit-shipment range, could be in the range of $2.92 to $3.62. In the case of higher-volume products, in the 75-million-unit range, estimated payments would be expected to be lower, varying in the range of $0.44 to $0.80, as detailed in the table below. Black Stone IP mentioned that they could not exclude the possibility of some MPEG-H 3D Audio Main Profile patent holders asking for content-related service fees (not to be confused with “content fees,” which it has not seen being proposed).

Screen Shot 2015-09-24 at 9.12.59 AMRecently, two of the three MPEG-H Audio Alliance licensors, Technicolor and Fraunhofer, announced a program license for their patents “based on a comparatively small but still powerful subset of the MPEG-H 3D Audio standard,” with pricing from $0.15 to $0.99, depending on volume, and no content-related services fees. It is not clear to Black Stone IP, however, which features and tools from their category “MPEG-H New Features” or other underlying standards are included in this license pricing, despite a careful study of the announcement and publicly available materials. While this issue may be cleared up in future announcements, there will be natural concerns as to which features may be avoided from the implementation and what will be the feature set and quality of what is left. In its analysis, Black Stone IP counted over 2,000 individual company patents and patent applications that have potential applicability to MPEG-H 3D Audio Main Profile, across dozens of companies, some of which very sophisticated IP licensors.

Comparing Video Licensing Costs and Audio Licensing Costs
Consider video IP licensing costs for HEVC. One patent pool, led by MPEG-LA, has announced a single rate of $0.20 per unit for all devices and regions. A second pool, HEVC Advance, announced a range of pricing, with lowest cost of $0.50 for mobile devices in Region 1 markets, and $0.25 in Region 2 markets. Other patent holders not in the two existing pools have yet to make public announcements on their requested HEVC licensing rates.

With estimated MPEG-H 3D Audio main profile licensing at a cost of $0.44 – $0.80, at best, for high volume, one can see that implementors should pay close attention to, and consider potential licensing costs of, audio in parallel with technical evaluations of 3D audio.

3D audio is transformational and critical for wider adoption of next generation consumer devices, and may, in fact, influence the timing of adoption of video as well. Many consumers consider audio an important factor in the hardware system they purchase for the playback of video. As the ATSC and the entire media industry consider which audio technology should be paired with HEVC for the new generation of home theater and other applications, it seems evident that a fine balance needs to be struck between the commercial quality that consumers now require and the pricing of intellectual property licenses that will be needed depending on solutions chosen.

According to Elvir Causevic, Black Stone IP’s CEO, “while industry attention all summer has focused on the next generation video standard, the ATSC’s decision in October will be an important moment for the next generation audio technology that is key to the home theater consumer experience. As with any standard, IP licensing costs and predictability should be a critical part of the assessment.” I will try to provide a follow up post next month after the ATSC makes their decision. For more on this topic, check out Black Stone IP’s recently published reports.