China OTT

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Information about China OTT

Published on November 1, 2018

Author: RezaRassool


1. Leading the Charge: What can we Learn from China’s Massive OTT deployment? SMPTE 2018 Annual Technical Conference & Exhibition Reza Rassool CTO, RealNetworks

2. Today’s Agenda • Update re. RealNetworks in China • Discuss massive OTT growth in China • Discuss regulatory and technical challenges • Discuss unique opportunities in China Exec Summary/Takeaway: RealMedia HD by RealNetworks provided China with the lean codec with clear licensing and high visual quality needed to enable that country’s incredibly fast rollout and uptake of OTT content. TALK:

3. Mainstream TV Internet video business 1st Online radio Stations 1st Online Cable TV-like video subscription Ringback tones First mainstream online music service with all major labels “Software as a Service” with turnkey mobile video services for largest US carriers 1-click DVR-like recording for internet videos Http Live Streaming on Android Video player and cloud service to easy move, watch, and share movies Allow consumers easily customize their callers' ringback tone Social casino game to use monthly sweepstakes to U.S. Shipment of RMVB codec of 1.3 billion U. Next-generation streaming media codec, RMHD +20 Years of Innovation. 1995 2000 2002 2004 2007 2011 2013 2014 20151997 2016 2017 2018 SAFR launch Scener launch STORY:

4. RealNetworks is strong in China History of RN in China • Established Office in China 2005 • Licensed RealMedia CODEC in 1 Billion devices by 2014 • RMHD, 11th codec version, Huawei OS integration 2015 • RMHD adopted by CIBN 2018 for OTT

5. China, Internet and OTT Devices on internet (China) MobileDesktop Laptop TV Tablet Global Internet users Internet penetration of population in China Internet penetration of population in US STATS:

6. China’s Subscription OTT Video Market is Booming In 2018, close to 229 million people in China will watch video via a subscription streaming service that bypasses traditional distribution. FACTS:

7. Top 3 OTT Operators in China (2018) WINNERS: Tencent iQiyi-Galaxy Youku-CIBN Rank Service Penetration PC Mobile PC Mobile iQiyi 26.71 -5.74 50.8 53.7 126 424.1 421.3 Tecent (Video and all) 363,87 N/A 62.6 N/A 137 N/A N/A Ali Media & Entertainment (Youku) N/A N/A 30 N/A N/A N/A DAU (million) MAU (million) Name Revenue (M US$) Margin Subscribers (Paying)

8. • Government regulations from: • MIIT: Ministry of Industry and Information Technology of the People’s Republic of China • SART: State Administration of Radio and Television, established Apr 16th 2018/SARFT • OTT Licenses • SART license on content creation (studios) • SART license on Content aggregation and certification platform (7 total, CIBN has 1) • SART license on Streaming Service operation: (588 in total, both RuiAoShi /CIBN Oriental have 1) • MIIT license on website (Each website must have one /RuiAoShi has it for • Typical OTT TV/service Providers • Get service operation license • Connect to at least one of the 7 aggregation platforms • Each license holder should be responsible for keeping all contents checked and certified OTT Regulations in China

9. China’s OTT Regulatory Landscape

10. China OTT Licenses Directly owned by government

11. • Content • ~15k VOD titles • 19 carousel channels • Membership: RMB 360 (US $52) per year • Users • 110 M active devices under regulation • 32 M actives subscribers on his own services CIBN

12. • Background • StarsChina was founded in Nov 2013. • A CIBN holding company (CIBN Oriental holds 51% shares of StarsChina) • An emerging company to explore mobile OTT business • Service • Positioned as ‘Mobile inter-action media operator’ • Exclusively runs ‘CIBN Mobile TV’ service for China Radio International. • App covers Android and iOS, services cover VOD and Live • Users (2018) • 430M registered users • 2M daily active users. StarsChina

13. • To take the user experience to higher level • To deliver higher video quality as well as save CDN cost • To expand HD video service to wider coverage • Compelling business value to CIBN • Possibility to build a unique ecosystem for new video consumption model CIBN’s Ambitious Requirements

14. • Improve Video Quality Without increasing bandwidth or processor requirements. • Smooth streaming performance and reduce latency without reducing video quality. • Reduce CDN costs (Second only to acquisition in OTT costs) • Regain CODEC control (no patent pools or questionable licensing issues) What OTTs Want TALK:

15. • Software CODEC • Ease the deployment – Customer simply installs / upgrades software • Integration – OTT can integrate an SDK into their app • Works on Android, iOS, Linux, Windows. Some phones provide native support. • Android SDK • Works on OTT boxes • Works on mobile phones • Works on Smart TVs • Encoder • Runs on Windows for end users or short term trial • Runs on Linux for commercial (FFMPEG library available) What Was Needed? SOLUTION:

16. A Software Defined CODEC for a Software Defined Network: • Best balance of quality vs. efficiency • High efficiency: smaller files, faster software encode vs. h.265 and VP9 • High resolution: natively supports 4k, 8k • Low CPU consumption: mobile friendly (8-11% more battery consumption vs H.264 software decoder) • Moore’s Law wins • Greater device coverage RealMedia HD (RMHD™)

17. Offers cost reduction and service enhancement vs. AVC. RMHD Compression Performance 1080p

18. Offers room for growth to 4K. RMHD Compression Performance 4K

19. Low-latency HLS streaming • Leveraging learning from RTSP. Move buffering logic from server to client. • Fast start up • Fast seeking • Low latency • CDN friendly Superior Streaming

20. Success of a proprietary video format requires both ecosystem engineering as well as codec engineering. Any questions? Thank You! THANKS!

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