Cost cutting in OTT

by Thijs Lowette

This article is part 10 of the "21 Thoughts on Video Streaming in 2021"-series.

Matthijs Langendijk (Lead Smart TV at 24i) sees us cutting costs in his 2021 thought.

2021 continues the unprecedented growth that was kicked off in the past year. With people having a lot more hours to fill, keeping them entertained and engaged will definitely be one of the main goals for this upcoming year. Offering a seamless watching experience across all of their favourite devices will be one of the main focus points in keeping your audience engaged.

But, with all that extra watching, costs for things like CDN traffic have also risen a lot. So I expect a lot of focus on cutting costs in the upcoming year as well, for example with the use of newer encoding standards and per-title tailored bitrates.

I think cost cutting is the reality for too many companies in the COVID era.

But how? By sacrificing features (or resources)? Or by leveraging new technologies to become more efficient?

I'm not convinced that new technologies will save us money in 2021. Why? In the current market, video streaming services "have" to combine video codecs like H.264, VP9, HEVC and/or AV1. These streaming services can't go all-in on one video codec. In the future we can probably drop H.264 (and save on storage costs), and perhaps go all-in on one video codec, but won't those savings be compensated by 4K and 8K qualities? Encoding costs also go up with modern video codecs like HEVC, VP9 and AV1.

I do believe in an AV1-like per-title encoding future. In this future, all platforms support the same, modern video codec, and encoding profiles are optimized per title. I also believe we'll see a lot of progress towards this future in 2021.

So how will companies cut costs in 2021? I don't know, but if I have to guess:

  • Buy instead of build, and cut down on internal resources, because they think buying is cheaper than building.
  • Build instead of buy, and cut down on external expenses, because they think building is cheaper than buying.
  • Drop features/services from their product/company where the ROI doesn't make sense.
  • Reduce budgets – perhaps also innovation budgets. :(

PS. Matthijs writes at https://medium.com/@mlangendijk92.