A Hybrid Approach Guides the Changing Face of On-Prem Encoding

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A great example is Telestream Vantage. I spoke with Shawn Carnahan, CTO, who described how customers were accessing Telestream Vantage, the company’s flagship media processing program. Carnahan says that most customers still accessed Vantage bundled with traditional Lightspeed servers. However, an increasing number are also deploying software-only versions in their internal computing centers, usually into full virtual machines. He also notes that Telestream is supporting the need for scalability with usage-based pricing, though it’s closer to daily pricing than output minutes.

The most fascinating changes are occurring in the SaaS-based Telestream Cloud, however, where under the hood, a number of the traditional Vantage-based applications like IMF content creation and captioning are being ported into containers for web operation (Figure 3). Not only does porting simplify development, Carnahan related, it also ensures that the cloud outputs are identical to on-prem outputs.

Changing Face 3

Telestream is porting many of Vantage’s applications into containers for cloud-based deployment.

In this fashion, not only can Vantage users push encoding up to the cloud, they can push other workflow items like quality control or standards conversion to the cloud, all charged on a per-minute SaaS basis. Reflecting back, Carnahan says that the cloud impacted the encoding market later than it did many enterprise computing functions, most likely because of the sheer size of media files, though the momentum has definitely accelerated. “Three years ago, you had to offer cloud encoding so you could check it off on an RFP,” he says. “About a year ago, that shifted to real demand for comprehensive cloud services, which is a real challenge, both from a technological perspective and for converting revenue from traditional licensing to SaaS.”

Elemental Technologies started out selling high-performance, stand-alone encoding appliances, and was one of the first traditional encoding vendors with a credible cloud offering, though its Platform as a Service model was designed to appear to users like on-prem equipment, so it required significant management and oversight from the end user. Now owned by Amazon, AWS Elemental has totally “cloudified” its product offerings via a suite of AWS Media Services applications supported by other Amazon services and multiple third-party partners providing functions like quality control and DRM that are accessible within the AWS infrastructure. SaaS operation and pay-as-you go pricing completes the transformation (Figure 4).

Changing Face 4

AWS Media Services provides most of the functionality of on-prem products at a fraction of the implementation cost.

Where Telestream Vantage adds value in pre-encoding workflows, AWS Elemental Media Services focuses on encoding and distribution, with services for live (MediaLive) and VOD encoding (MediaConvert), packaging (MediaPackage), storage (MediaStore), and monetization (MediaTailor). These are supported by other services like the Amazon Kinesis Video Streams service for ingestion, the Amazon CloudFront content delivery network, and the Amazon Rekognition video and image analysis service. This pricing model allows new services to spring up for a fraction of the cost of traditional pricing models, which leads us to our final conclusion.

For Agility and Scale, It’s All About the Cloud

As we saw earlier, companies with a fixed set of live channels seem to favor on-prem encoding, since operational efficiency rather than scalability is paramount. In contrast, at both ends of the size spectrum, from start-up to massive scale, cloud-based SaaS services are beginning to dominate.

Until recently, starting an OTT service required a significant investment in hardware, software, and video-related technical expertise, plus months to get the gear installed and running. Today, multiple vendors (including two we’ve already mentioned, Harmonic’s VIOS 360 and Elemental’s AWS Media Services) offer cloud-based, turnkey systems with pay-as-you-go pricing, enabling OTT entrepreneurs to hit the ground running fast and to focus on what they know best—finding content and building subscribers.

Companies in this mode of operation would benefit from viewing two case studies, the SuperSoccer case study on the Harmonic site and the FuboTV case study on the AWS site. Services like these are also appropriate for companies that need to quickly add channels, or to support event-based productions that occur infrequently, so don’t warrant a massive CapEx investment.

Another company with a similar product offering is MediaKind (formerly Ericsson Media Solutions). Tony Jones, principal technologist at MediaKind, points out that while cloud operation has benefits for startups and periodic events, it also is becoming the preferred platform for operations running at scale. “If you have 10,000 channels, you simply can’t manage it manually, you have to do it using cloud technology,” he says. “It’s worth the investment to set up the cloud environment, configure one channel, and step-and-repeat for the others.” Jones also points out that cloud operation offers much greater operational efficiency than traditional appliances, vastly simplified maintenance, and more affordable redundancy.

Although MediaKind's offerings can run on both private and public clouds, Jones sees more and more companies turning to the public cloud, mostly because the technical expertise necessary to run a private cloud is extensive and dynamic. Not surprisingly, Encoding.com’s Heil, who was among the first to bet big on the cloud, feels the same way.

I asked Heil, “Isn’t it always cheaper to install your own hardware to encode consistent demand?” He agreed, but with a caveat: “Cost is only one factor, and the cost of compute in customer-owned data centers as well as in the cloud continues to decline,” he says. “For many, compute is already a utility that gets paid every month. Netflix has enormous compute requirements and runs most of its encoding operation on AWS infrastructure. With the requirements in the OTT space changing so rapidly, investments in hardware or software encoders become outdated long before the cost can be fully amortized. Finally, the location of content is also key in deciding whether or not to build internal encoding farms. As more companies move their content stores to AWS S3, encoding in the cloud becomes an easy decision.”

Beyond that, Telestream’s Carnahan adds, “you’ll always need some on-site computing for heavy editing and production, and an onsite encoder to get the video into the cloud, at least for live. Beyond that, the business case for on-prem encoding is clearly waning.” The bottom line is that if we revisit this topic in 5 years or so, the concept of an on-prem encoder will likely be in the rearview mirror for many, if not most, companies.

[This article appears in the July/August 2018 issue of Streaming Media magazine as "The Changing Face of On-Prem Encoding."]

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