Build at Your Own Risk: Why Managed Services for Multiscreen Video Make Sense

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1 Build at Your Own Risk: Why Managed Services for Multiscreen Video Make Sense The trend of consumers watching TV and videos on their mobile devices is gaining momentum. Research firm IDC predicts that by 2016 more than 400 million consumers will use a smartphone to watch TV and movies. This represents a 36% compound annual growth rate (CAGR) from 2011 to Meanwhile, tablet usage for viewing movies and TV will grow at an even faster CAGR of 52% during the same period. As these numbers skyrocket, service providers have opportunities to increase customer engagement with their brand and to drive revenue by offering multiscreen video. However, providing multiscreen video requires extensive resources in capital, operations, ongoing management and technology development. The complexity and investment required raise the question of whether to build a multiscreen video infrastructure in-house or to partner with a managed service provider. In this series, QuickPlay will explore the complexity of deploying multiscreen video services and the advantages of using a managed service model.

2 Understanding and Managing the Cost and Complexity of Multiscreen Video Services Offering multiscreen video services can help communications service providers (CSPs) drive revenue and remain competitive. The high costs and extensive resources needed to deploy these services in-house stem from the complexity of building and maintaining the infrastructure and are often underestimated when planning a build it in-house deployment. While there are numerous benefits to working with a managed service provider such as QuickPlay, CSPs should consider the following six advantages when planning a service launch: 1. Eliminate Capital Expenditures The costs of the hardware, software and other technology needed to deliver multiscreen video can quickly add up. For example, the infrastructure must be built to handle peak loads. That means running and supporting racks of encoders and servers to handle peaks that may represent only 10% to 15% of usage. In addition, CSPs must account for hardware replacement costs on a minimum two-year cycle. This is a challenge for overburdened IT departments tasked with doing more for less. Partnering with a managed service provider such as QuickPlay eliminates capital expenditures, as QuickPlay s platform is built to share and maximize load so CSPs pay only for what they need at all times.

3 2. Reduce Ongoing Operations Costs Delivering multiscreen video poses a number of operational challenges. For example, expanded hardware puts more strain on data center management, including utilities, power and storage. This can place a huge burden on a CSP s internal IT resources and make it difficult to predict on-going expenses. Another consideration in quantifying operations expenses is the specialized personnel needed to provide on-going development in areas such as device support, innovation, security and media operations. QuickPlay Media s managed services take the guesswork out of predicting operations costs, as they do not require CSPs to divert scarce, current IT personnel or hire new media operations personnel. 3. Accelerate Time to Market CSPs cannot afford to spend 18 to 24 months building infrastructure or assembling and integrating all the pieces required to deploy a multiscreen video service that will generate new revenue and increase customer loyalty. These long development cycles can make a new service obsolete before it goes to market. One of the greatest benefits of using a managed service model is faster time to market, as a managed service provider will bring all the infrastructure needed to quickly launch multiscreen video services. QuickPlay Media has brought multiscreen video services to market in as little as 90 days.

4 4. Move from Churn to Revenue Many multiscreen video services start off as churn reduction programs that add value to existing services for more customer stickiness. However, at some point, churn reduction must have a path to revenue. In a market where consumers increasingly expect to access their television services on any screen at any time, charging an additional cost is not an option. CSPs must look for other ways, such as advertising, to monetize their multiscreen video services. QuickPlay Media offers integrated advertising including dynamic ad insertion capabilities to give CSPs a path from churn to revenue. According to IDC, a managed video service not only improves an operator s ability to enter the market more quickly with a compelling and differentiated video offering but also allows an operator to better monetize its video services and offer customers more value compared with video offerings provided by OTT players, particularly when the managed service can enable multiple business models and usage scenarios.

5 5. Improve the Customer Experience CSPs that build their multiscreen video services in-house may find it challenging to keep up with customer demands for new functionality that will enhance their viewing experience, such as: n A high-quality viewing experience on all platforms n DVR capabilities that allow customers to pause, fast forward and rewind videos as well as to seamlessly switch between devices n Content search and discovery tools that make it easy for customers to find content As a managed service, QuickPlay Media gives CSPs the ability to easily add new features and improve the consumer experience without using additional resources. QuickPlay s reporting capabilities also provide insights into consumer behavior, which can further help CSPs improve the customer experience. According to IDC, Some managed video service offerings afford the operator the ability to perform advanced analytics related to the user s experience with the managed video service, which can provide a CSP with valuable insight about the usage experience that can be leveraged to refine the pricing or features of the offering over time. 6. Achieve Greater Flexibility In-house multiscreen builds are often too rigid to quickly adapt to technology trends and consumer preferences. QuickPlay s business is to deliver and manage multiscreen video infrastructure and services, which involves bringing all the integrations needed to support the latest technology developments, including adherence to new and evolving standards. This means that CSPs do not need to upgrade their internal infrastructure to gain new features and support devices as soon as they hit the market.

6 This does not mean surrendering control. According to IDC, Using a managed service doesn t mean losing control. In fact, some managed video service providers offer CSPs the ability to bring the video service in-house at a later date should they wish to run the operation themselves. In addition, selected providers can leverage a CSP s or cable operator s existing video infrastructure investments so these assets don t become stranded or underutilized. CSPs face a number of risks when developing multiscreen video services, such as uncertainty about costs, monetization and technology. By partnering with a managed service provider such as QuickPlay, CSPs get all the resources needed to manage the technology as well as to develop a competitive offer at the lowest cost with room to scale. Interested in learning more about the benefits of partnering with a managed service provider for multiscreen video? Visit buildatyourownrisk to download the IDC Analyst Connection The Case for Service Providers to Use a Managed Multiscreen Video Offering. About QuickPlay Media QuickPlay Media is the only end-to-end managed services provider that handles the most resource-intensive parts of offering premium video and live TV to multiple screens. We remove the burden of doing everything in-house by providing you with all the integrations that are needed to ingest, manage, publish and consume content. This allows you to achieve all the benefits cited above, such as rapid monetization, a faster time to market and reduced development costs. To discover more about how QuickPlay can help you gain a competitive advantage and offer your customers the latest in multiscreen video entertainment, visit or salesinquiries@quickplay.com.