Video and advertising are the most credible drivers for carrier cloud over the next five years, and they may be the most critical even in the long run. They’re also the best hope for early deployment of edge computing. The question is what kind of software and infrastructure video and advertising might end up deploying, and how the deployed stuff might then facilitate other applications of carrier cloud.
One useful way of assessing how carrier cloud drivers might interact is to look at the very near term (2019) versus medium-term (2020-2022) potential for justifying carrier cloud deployments, and see what the most important symbiosis points would be. This year and next, video/advertising represent half the total opportunity drivers for carrier cloud, but for the following three years it represents only about a quarter of opportunity. Three other areas (operator cloud services, contextual and personalization services, and IoT) will each double their influence on carrier cloud between 2019 and 2022. Realizing these mid-term opportunities would be most likely if video/contextual services prepped infrastructure for them.
The requirements for video/contextual services are evolving largely due to the pressure of streaming video in general, and streaming live TV in particular. The classic “what’s on” model of scheduled viewing is still the dominant source of ad revenues, and so if we transition to streaming for live TV we can expect to have to at least sustain if not improve advertising revenues through the shift. This seems to depend on three major factors, content delivery network caching for both programming and commercials, personalization of ad delivery based on all possible monetizable factors, and efficient insertion of ads within the commercial slots.
CDN use in live programming favors edge caching because the fact that programming is delivered on a specific schedule makes it possible to get reasonable estimates of audience size and avoid the classic streaming problem of having a thousand viewers of the same material distributed over just enough time to make efficient delivery difficult. There is some evidence that even time-shifted (cloud DVR or on-demand) viewing of scheduled content is more predictable, and thus makes edge caching more efficient.
Edge caching is beneficial to any form of ad insertion in live video, for the simple reason that it’s difficult to accommodate any time slippage in delivery when you’ve got to fit things seamlessly into time slots. Advertising (commercials), at least in personalized form, don’t run on as dependable schedule as live TV, but there are generally fewer commercials on tap for delivery and it’s not unreasonable to assume that you can cache most of them close to the edge in most metro areas where demand density is high.
Caching near the edge would be a significant driver for carrier cloud and edge computing, because the current trend in CDNs is toward hosted functionality rather than custom appliances. Furthermore, hosted CDN functionality allows operators to allocate a pool of resources to CDN and other carrier cloud applications, creating the potential for that positive leverage I noted earlier. However, it doesn’t mandate either carrier cloud or edge caching, because in theory operators could cede CDN responsibility to the content providers. This doesn’t seem likely if the operators are using CDN to support their own streaming live TV services, though.
Ad insertion raises the question of personalization, our second factor. If ads are selected to fit into predefined programming slots, the selection can consider the specific demographics and interests of each consumer, which means ads can command higher prices. That’s important in an age where the number of commercial minutes per show is already annoying many viewers, inducing them to move to time-shifted viewing or even to abandon live TV in favor of streaming libraries from firms like Hulu, Netflix, or Amazon.
The current state of the art in personalization of ads doesn’t require real-time intervention or perhaps even much specific customization. Anyone in the content delivery chain who has the right to insert ads could provide profile information to facilitate ad selection, and that information would be sufficient to pick the right commercials from an inventory of cached material. Propagation delay in this process wouldn’t be a meaningful factor.
Both advertisers and content providers tell me that they expect to see more precise targeting in the future. One thing of particular interest is linking commercials to current online search and social media activity, and another is linking ads to programming based on the specifics of the content at the time of the commercial insertion. These accommodate the specific interest of a viewer, perhaps stimulated by other ads or by paid product appearances in the content itself. In either case, a more real-time selection of commercials would be required, and this could (but wouldn’t necessarily) promote edge computing. It would surely be a good carrier cloud application.
Ad personalization is obviously a lead-in to what I’ve called “contextualization and personalization”. This collective application involves understanding more about what a user/viewer is doing at the moment as well as demographic or historical factors, and using the combination to anticipate what the user’s wants and interests could be at any moment. Providing for this could cover a lot of ground in terms of data gathering and even event processing, but much of the personalization goals of video/advertising don’t require event-handling at all, and therefore wouldn’t necessarily promote edge computing.
That seems to open the key carrier cloud evolution issue. Right now, video/advertising would promote carrier cloud and the CDN/caching mission could promote edge computing, but neither is guaranteed to require or promote event-based applications. That would mean that event-driven contextualization of user interests and the integration of IoT might not fall out of early carrier cloud development, which could slow their impact on further promotion of carrier cloud.
This illustrates one of the big issues we face in promoting technology revolutions; multiple drivers are often needed to create the massive benefits needed to fund the revolution, and yet the drivers may not fuel a common technology shift that benefits everything that we’re depending on. If we can’t harness video/advertising to build out the correct model at the edge, then future carrier cloud applications will have to justify their own smaller revolutions to deploy, creating a less-than-optimum path to the future.