Media Solutions & Aura Operator CDN

EXECUTIVE SUMMARYThe proliferation of more and more quality television programming, along with the growth of “binge

viewing” – watching two or more episodes of the same TV show in one sitting – has resulted in

people viewing more TV than ever before (see Appendix A: TV Everywhere Trends). Consumers are

increasingly augmenting traditional linear TV viewing with video streamed to computers and other IP-

connected devices. Whether it’s on TV, a tablet, a smartphone or a computer, Pay TV providers know

they need to develop smart strategies (see Appendix B: CaaS Use Cases) and easy-to-access services

that deliver high-demand content to consumers, anytime and anywhere.

To launch a compelling multiscreen TV Everywhere (TVE) service that can effectively compete with

the numerous options currently available to consumers, many complexities must be considered. No

longer is it sufficient to deliver live and on-demand streams to a fully managed set-top box sitting in

the home. Consumers want to use their own devices, and they expect access to live and on-demand

content, both in the home and on the go. As a result, a brand new content licensing, preparation,

management, and delivery paradigm is needed to meet user expectations and remain competitive.

To address the complexity in the IP video ecosystem, many service providers are considering

outsourcing elements of the digital content supply chain to expert third parties in order to: simplify

their workflow, instantly leverage economies of scale, and deliver a high-quality experience both

quickly and at a reasonable cost. Content-as-a-Service (CaaS) is a simple concept that enables service

providers to deliver on the promise of TV Everywhere and to focus their core competencies, resources,

and budgets on building out their networks, developing new service offerings, and providing high-

quality customer service.

Much as Software-as-a-Service (SaaS) changed the game for business software by eliminating the

need to manage licenses, upgrades and other tedious aspects of operation, CaaS delivers all of

the infrastructure, processes and support necessary to develop, launch and manage a superior TV

Everywhere service. CaaS consists of a centralized repository of pre-licensed, pre-configured content

that is stored, hosted and distributed across a global content delivery network. As the online video

entertainment industry continues to evolve, it is an entirely new approach to IP video delivery that

offers operational simplicity, future proofing and a “pay-as-you-go” business model.

1

“Anytime! Anywhere! CAn Anyone help?!”

It’s clear that the multiplatform video ecosystem is complicated. The proliferation of IP devices and

the array of required encoding formats surpass what was once a relatively easy process of MPEG-2

and MPEG-4 file creation and distribution for TV and movie content viewing. Adding fuel to the fire

are exponentially increasing storage, delivery, and infrastructure costs that create ever-greater barriers

to entry. As market research analysts Frost & Sullivan point out, “The market wants a monetization

focused, feature/app rich agile platform which has deployment flexibility through CPE or the cloud.”

To date, multiplatform service provider offerings have not been particularly flexible nor are they

evolving as quickly as the market demands to keep pace with the fast evolution of over-the-top (OTT)

services. Most digital content solution vendors are limited in what types of services are available,

require equipment purchase and installation, and/

or are missing some of the key components of

the digital content supply chain. The need for a

multidimensional solution has never been greater.

In addition, Network and Pay TV Operators must

manage an ever-increasing array of device and digital rights management (DRM) formats that require

them to create, store and distribute as many as 20 or more versions of each content title. And then they

must continually update the profiles and formats as new devices are introduced. All of this translates

to high transcoding and storage costs, along with the capital investment into infrastructure needed to

build out virtual storefronts, an e-commerce backend and DRM systems. There is also a need to select,

deploy, and manage the content delivery infrastructure that streams all the multiplatform video content

and assures that subscribers can access it regardless of the network to which they are connected.

The result of the growing complexity is that service providers no longer want, but need a TVE solution

that offers:

• On-demand streaming to all major IP-connected devices

• The ability to offer the same services to both set-tops and IP-enabled devices

• A future-proof platform to support TVE services in an evolving market place

• A means to compete effectively with growing OTT providers (like Hulu and Apple TV)

• Increased monetization of current and expanding content catalogs

• A cost-effective business model that leverages economies of scale

• An ability to launch and evolve services quickly

“The market wants a monetization focused, feature/app rich agile platform which has deployment flexibility through CPE or the cloud.”

- Frost & Sullivan: “The TV Everywhere Ecosystem: OTT Video Redefining the Landscape.”

1 “The TV Everywhere Ecosystem: OTT Video Redefining the Landscape,” by Frost & Sullivan

2

1

Like SaaS, CaaS is a subscription-based delivery model that is managed and hosted in the cloud. CaaS

distributes the costs of infrastructure across multiple service providers in a multi-tenant ecosystem,

thus reducing capital expenditures, increasing distribution efficiency and unifying operations into a

managed platform that offers significant reduction in:

• System planning & integration

• Set-up & configuration time

• Storage costs

• Infrastructure capex & maintenance

• Operational support labor & costs

What makes Content-as-a-Service so effective? CaaS offers a centralized repository of pre-licensed,

pre-encoded content that is stored, hosted and distributed across a global network. This simplification

greatly reduces the cost of pushing out massive,

duplicate quantities of content to multiple destinations

and requiring video distributors to encode and

store a growing array of formats. Instead, content is

pulled from the network “as needed,” thus reducing

distribution and content preparation costs. CaaS helps service providers offer a superior solution by

providing secure access to content that enables multiplatform services – with simplified delivery and

shared infrastructure costs.

Content-As-A-serviCe (CAAs):A FAmiliAr ApproACh to A new problem

“CaaS offers a centralized repository of pre-encoded content that is stored, hosted and distributed across a global network.”

“SaaS + Content = CaaS.”

CONTENTSTOREFRONTS

CONTENT PREP &MANAGEMENT

DATA &ANALYTICS

3

This new paradigm provides the market with a comprehensive approach for supporting the digital

content supply chain and leaves the burden of maneuvering through the matrix of content preparation,

management and delivery to digital content service experts. It is a modular solution that provides a

true end-to-end, integrated set of infrastructure, processes and support (see Table 1: Digital Content

Supply Chain Components below) required to create a comprehensive TV Everywhere offering.

Content-As-A-serviCe (CAAs):A FAmiliAr ApproACh to A new problem (Cont.)

4

What SaaS did for software delivery (think salesforce.com™), CaaS does for video content delivery.

CaaS provides a robust and seamless aggregated viewing experience. It simplifies and unifies the

TV Everywhere experience while leaving the brand positioning and services launch to the service

provider. CaaS provides the infrastructure required to stream digital video to any IP device while

lowering the costs to open up new monetization

opportunities. It also allows a provider the option

to deploy and control their own stream delivery

functions as traffic begins to grow, giving the

provider greater control over content delivered

within their network. Using CaaS, providers can

package and market a broad range of services to

new types of customers by augmenting their core offering with a subscription movie service. They

can also deliver transaction-driven on-demand access to catch-up TV, first-run movies, download-to-

play and download-to-own services that allow subscribers to watch movies whether or not they are

physically connected to the Internet.

CaaS Reduces Operational Cost & ComplexityInstead of distributing content out to discrete headends in multiple locations, CaaS enables Pay TV

subscribers to tap streams stored on a Content Delivery Network (CDN) from any supported device

at any time, over any network. Outsourcing TV Everywhere operations enables video streams to be

quickly augmented, modified, added or removed as market conditions change, and allows for better

control of IT expenditures. With its modular design, CaaS also creates more flexibility and the ability to

bundle required services as needed.

CaaS Addresses the Threat of Growing OTT ProvidersWith OTT providers taking a larger share of wallet, Pay TV providers need a platform that offers a

competitively sized content library and comparable cost efficiencies. CaaS provides both, as well as

on-demand scalability and minimized risk. Furthermore, CaaS can be deployed ultra-fast and can be

quickly adapted to accommodate advances in technology.

CaaS Supports a Robust TVE Content LibraryLicensing content and negotiating rights is not only complex, it is also expensive. Licensing costs can

run anywhere from 50 to 70 percent of revenue. Managing fluid content rights and growing content

libraries is a cornerstone of the CaaS model. Both live and on-demand content is supported across

multiplatform devices, as well as metadata management and quality control.

the beneFits oF CAAs

“CAAS provides a robust and SEAMLESS aggregated viewing experience.”

5

CaaS Provides Global Reach and On-Network ControlEven the largest service provider has a limited network footprint that restricts the ability to reach

a subscriber wherever they go. CaaS leverages a massively scalable cloud-based delivery function

to extend the provider’s footprint. CaaS also gives the provider the ability to deploy their own CDN

capacity on their network to drive additional efficiencies, reduce costs and improve quality of service.

CaaS Empowers a Future-Proofed Eco-System That Evolves with the MarketCaaS offers future proofing for new and evolving devices, formats and standards. It addresses the

continuing progression of disruptive technologies that continue to emerge in the evolving TVE

marketplace and shifts the burden of managing the TVE infrastructure to a third party whose core

competencies are digital supply chain, change management and content delivery. In addition, as new

devices and formats are introduced, service providers aren’t stuck with the cost of re-encoding their

entire content libraries.

CaaS Creates a Seamless Multiplatform Experience for Subscribers

CaaS enables service providers to give their subscribers the choice of play-

out devices. It provides a consistent user experience across services and

offers a white label storefront with flexible branding alternatives. CaaS also

accommodates burstable capacity to support peaks and seasonal demand so

that the TVE service is never disrupted.

CaaS is Cost EfficientBecause CaaS distributes costs across a number of customers, it provides massive economies of scale.

The “pay-as-you-go” model offers subscription tiers based on the size of library and actual subscriber

usage with a low cost up-front investment. The ongoing cost advantage accumulates year-after-year.

6

the beneFits oF CAAs (Cont.)

A well-designed CaaS platform takes into consideration that service providers have a variance of existing

platforms and ecosystems and, therefore, one size does not fit all. CaaS removes the implementation

and deployment complexity, but not choice. Because CaaS is modular, service providers can choose

which functionality they need. It may be that a provider already has a robust storefront, so they

can omit that module and simply integrate CaaS

into their existing interface. Or it could be that a

DRM entitlement system is already up and running

and can be integrated into the overall solution.

As popularity grows and further scale is needed,

CaaS provides a “pay-as-you-grow” business model that leverages a highly-scalable CDN platform

with global reach to provide a true TV Everywhere solution. It is designed so that a service provider

can deploy and control their own Licensed CDN (LCDN) or Managed CDN (MCDN) capacity, providing

greater cost and control efficiencies as the platform scales to terabytes of delivery capacity.

As with any managed service, the onboarding process is far easier than having to evaluate, test,

integrate, and deploy all of the solution pieces discretely. There is no equipment to commission,

house and test; no software to license and install; no database management to set-up; and minimal

conversion and integration. CaaS takes weeks, not quarters (or years), to implement. A typical set-up

process includes:

• Determining the desired user interface and options (e.g., white label storefront and DRM

entitlement)

• Determining the desired content packages and aligning the content package rights

• Estimating storage and delivery capacity needs

• Integrating an existing storefront or creating the branding for a white label storefront

• Determining storage and delivery locations on your network (if desired)

The quickest way to find out if CaaS is right for your operations is to contact the companies that

offer it to get a comprehensive assessment. Akamai and Vubiquity are two such companies that

have collaborated on the Content-as-a-Service concept and provide best-of-breed services for

multiplatform video.

GettinG stArted with CAAs

“A well-designed CaaS platform takes into consideration that distributors have a variance of ecosystems and that one size does not fit all.”

7

Vubiquity is the leading provider of multiplatform video services. The company’s platform was built

upon Vubiquity’s experience working with 1,000+ content owners, cable operators, IPTV operators

and OTT providers in 37 countries and in 15 languages that enable multiplatform video capabilities to

any type of operator. It offers a broad set of modular services that include a deep library of licensed

content, a digital storefront, and direct-to-subscriber streaming, electronic sell-through (EST), as well

as other next-generation video services.

Akamai operates the world’s largest distributed cloud services platform and is a market leader in delivery

of multiplatform IP Video. The Akamai Intelligent Platform™ is a global platform with 150,000 servers

deployed on more than 1,200 networks in 92 countries. In addition, the company’s Aura Licensed and

Managed CDN solutions give service providers the deployment flexibility, control and scale that they

have become accustomed to when delivering high-quality live or on-demand video streams.

Together, Vubiquity and Akamai bring everything a service provider needs to quickly and cost-effectively

launch a multiplatform video service. Akamai’s expertise in delivery of high-quality video at scale

works in harmony with Vubiquity’s position as the leading provider of multiplatform video services.

They offer unparalleled access to a library of pre-licensed, pre-encoded content that supports multiple

on-demand business models for delivery to set-top boxes and IP-connected devices.

About vubiquity And AkAmAi

VUBIQUITY CONTACT

Gabe Berger, SVP Business Development

gberger@vubiquity.com

678-896-2419

AKAMAI CONTACT

Steven Chester, VP Global Media

schester@akamai.com

408-650-0297

8

AKAMAI CONTACT

Steven Chester, VP Global Media

schester@akamai.com

408-650-0297

According to Frost & Sullivan2, the TV

Everywhere market revenue in 2012 was $1.5

billion with an expected CAGR of 20% through

2017. TVE has typically been used to increase

customer retention and service stickiness for

service providers. A CTAM study3 found that

offering TVE is an effective way of increasing

subscriber’s opinion of the service provider as well as the perceived value of their services (see

Table 2: TVE Concept TV Provider Impact - Change in Opinion and Value Perceptions below).

2 Frost & Sullivan, “The TV Everywhere Ecosystem: OTT Video Redefining the Landscape”3 CTAM, “TV Everywhere: Messaging & Positioning Study”4 Nielsen, “More of What We Want: The Cross-Platform Report,” June, 2014

Appendix A: tv everywhere trends

According to Nielsen4, the monthly time spent watching content on

non-television devices increased across the board in the last year (see

Table 3: Monthly Time Spent by Medium). TV Everywhere usage is clearly

trending upward.

“Though some SVOD subscribers may be cutting the cord, the evidence is that the overwhelming majority are not only keeping the cord, they are lengthening it through aggressive use of TV Everwhere.”

- Russ Crupnick Senior Vice President and industry analyst for NPD

9

5 Adobe Digital Index, “U.S. Digital Video Benchmark, Q1, 2014”

It also appears that the initial fears that TV Everywhere would cannibalize

SVOD subscriptions are proving false. According to the NPD Group’s “TV

Everywhere Report,” 21 percent of Pay TV subscribers use TV Everywhere at

least once a month. The report also notes that Subscription Video On Demand

(SVOD) subscribers are “actually among the most active TV Everywhere

users.” Another promising set of statistic comes from the Adobe Digital

Index5 that finds users and video consumption of TVE services is on the rise.

(see Table 4).

10

Table 4: Engaging the Multi-Device User - Key Insights

Online video consumption across mobile devices.......................................+57% Q1, 2013 vs. Q1, 2014

Share of Pay TV subs who set up & authenticated TVE accounts…..+31% Q4, 2013 to Q1, 2014

TV Everywhere video consumption across devices………+246% Year-Over-Year

TVE authenticated video from gaming consoles and OTT…………+539% Year-Over-Year

Access of TVE content across devices and browsers……………………………..+31% Last Six Months

# of unique TVE visitors per mo. across all access points…+157% Year-Over-Year

# of TVE videos watched per visitor/mo. across all device types…+133% Year-Over-Year

6The survey was commissioned by Vubiquity and conducted by Frank N. Magid Associates, October, 2013. An Executive Summary of the research that provides additional data is available for

download from the Vubiquity website: http://vubiquity.com/knowledge-center.

The conclusion that can be drawn from recent TV Everywhere studies and reports is that it is gaining

in mind share and popularity - especially among the new generation of consumers. A recent study6

commissioned by Vubiquity found that three-quarters of people under age 35 also use a computer for

viewing video at least once weekly; 64 percent of 13-17 year olds watch video on a smartphone at least

weekly, and 37 percent on a daily basis. “Gen Y” has an insatiable appetite for viewing content wherever

they are. It is clear that the market is changing and that legacy systems and processes will be unable

to handle the increasing diversity of demand. CaaS is one solution that offers a clear path to delivering

multiplatform content out to wherever it is desired - securely and with the highest possible quality.

11

“I want to offer the same linear and on-demand content that I deliver to set-tops to other devices that my subscribers

own.”

A veteran Pay TV provider has a digital content supply chain that it would like to expand beyond

the set-top and into the TV Everywhere environment. However, legacy VOD systems were never

designed to support IP-streaming devices. The growth presents a host of new issues around

subscriber authentication, the extension of content licenses, transcoding to a variety of formats, and

the proliferation of storage. Because TV Everywhere today is not a significant source of income, but

rather a customer acquisition and retention tool, it is difficult to justify the capex required to build out

the incremental encoding, server and storage. Deploying a CaaS solution resolves almost all of the

obstacles to expansion. Instead of investing time, money and effort needed to match the offering of

bigger competitors, the Pay TV provider can outsource the complex operations to a trusted third party

and offer its subscribers what may start out as a novelty, but will progress into a “must have” valued-

added service.

“I want to leapfrog the competition and launch an integrated service that provides a unified brand across traditional

and new content delivery models.”

A new Pay TV operator wants to create a service that is differentiated in the marketplace. They aim

to deploy a future-proof, best-of-breed solution that stands out and attracts subscribers based on

ease-of-use and the seamless access to a broad array of content on a variety of screens. The operator

wants a comprehensive platform that includes a “brandable,” white label storefront, content rights and

a robust DRM entitlement system. Given the need to keep costs under tight control, the operator does

not want to build and maintain an expensive infrastructure and require a single source for all of these

components. CaaS offers the exact turnkey solution set envisioned. It provides all the equipment,

processes and rights – managed remotely in the cloud. Instead of having to focus on building

infrastructure, the provider can turn attention to its core operations, marketing and customer care.

CaaS supports a service for premium-oriented subscribers seeking an extraordinary entertainment

experience.

Use Case #1: A Veteran Pay TV Provider’s Need for CaaS

Use Case #2: A New Operator’s Need for CaaS

Appendix b: CAAs use CAses

12

“I want my customers to be able to watch catch-up TV.”

An international tier 2 Pay TV provider wants to give its customers the ability to catch-up with their

favorite shows by watching full episodes online. The provider lacks the requisite content and platforms

and needs help acquiring the rights to content and preparing the content for delivery, as well as storage

and delivery options. The provider’s first step is to either license the content or purchase licensing

services from a CaaS provider. From there, the CaaS vendor localizes, transcodes, packages, and edits

the content before transferring it to a content delivery network for storage and delivery. Finally, the

provider works with the CaaS vendor to find the right delivery platform — LCDN, MCDN or within the

Cloud Platform. The Pay TV provider is able to offer an additional value-added service without having

to invest millions of dollars in new infrastructure or stress over technical complications.

“I want to launch a TVOD OTT service.”

A service provider wants to launch a Transactional VOD (TVOD) OTT service so its subscribers can

watch full-length movies on any device for a fixed monthly price. While the provider has the requisite

content licensing relationships, as well as access to the required rights, it needs a solution for content

preparation, storefront, app development, DRM, storage, and delivery. With the modular design of

CaaS, the provider is able to work with a CaaS vendor to ingest, transcode, package, and edit content.

The CaaS vendor stores and delivers the content from the LCDN (Licensed CDN), MCDN (Managed

CDN) or within the Cloud Platform, depending on the services purchased by service provider. DRM

Key Management is purchased through the CaaS vendor and a preferred 3rd party vendor is arranged

for app development as well – making the service development a true “one-stop shop” experience.

Use Case #3: International VOD Provider’s Need for CaaS

Use Case #4: TVOD Provider’s Need for CaaS

13