The economic implications of online video quality

The report 'Understanding the Value of Consistency in OTT Video Delivery' reveals interesting conclusions such as that a single case of re-buffering could lead to a loss of income of more than 75,500 euros.

A single case of re-buffering could lead to a loss of income of more than 75,500 euros. This is one of the key findings of the new report Understanding the Value of Consistency in OTT Video Delivery (downloadable here), published by Akamai along with MTM, a research and consulting company specializing in media and technology.

The report combines research data with information gleaned from interviews with senior executives at numerous video distributors to examine the importance and impact of streaming video quality on business success. It also explores some of the key trends and dynamics around video quality in the premium OTT market.

Although there is no established industry standard to measure the quality of the online video experience, re-buffering is the only indicator that appears consistently in every conversation. Given the direct relationship between re-buffering and viewer loyalty, avoiding or minimizing these interruptions is a priority for most service providers. According to a senior manager at a major television network interviewed for the report, "We see customer engagement drop when they are watching the buffering wheel spin more than a couple of times. Our goal is to keep it below 0.5%. When rebuffering is less than 0.5, 90% of sessions are completed. If we talk about 0.5-1% then the number starts to go down; 80%. As soon as you get to 1%, you see the rate drops to 50%.”

Recognizing that re-buffering should be kept to a minimum is one thing, while finding the root cause is another. Given the breadth and complexity of video supply chains, problems can be associated with the ISP, CDNs, the end user's device or browser, Wi-Fi configurations, available bandwidth, network traffic and even the content itself. “Video delivery is a complicated process, with many gaps and fissures that can arise in that process,” acknowledged the vice president of strategy and innovation for a multichannel television network.

Analyzing Twitter we see that viewers do not hesitate to express their displeasure at an interruption. In fact, audiences are becoming more sophisticated when it comes to communicating and even identifying service problems. “We had an incident where we were adjusting our transcoding and users got angry because it affected the bitrate,” said the CEO of a video aggregator. "We apologized and emphasized that it was not because we were trying to reduce quality or save on costs... We have a particularly demanding public, who debate with our engineers. You have no choice but to compromise."

This brings us back to the 75,000 euros that a single case of rebuffering costs. We arrived at this figure by first looking at the volume of video traffic for a major US network between June 2017 and June 2018, which amounted to 370 million video views. Using quality of experience data collected through our media analysis tool we have seen that each case of re-buffering carries a 1% abandonment rate. With an average playback duration of just over eight minutes, a single rebuffer translates to 496,417 hours lost, or the equivalent of 10.7 million ad impressions (assuming 11 minutes of ad time per hour at an average of 30 seconds per ad). With a CPM of 7 euros, a case of re-buffering could ultimately lead to a loss of revenue of 75,500 euros

Looking at these numbers it is clear that there is a lot at stake when it comes to performance and video quality.