The Financial Implications of Online Video Quality

by Alex Balford on May 23, 2019

A single instance of video rebuffering could result in more than $85,000 in lost revenue. That’s one of the key findings in Understanding the Value of Consistency in OTT Video Delivery, a new report that Akamai has released in conjunction with MTM, a research and consulting firm specializing in media and technology.

The report combines research data alongside insight from interviews with senior execs from numerous premium video distributors to examine the importance and impact of streaming video quality on commercial success. It also explores some of the key trends and dynamics around video quality in the US premium OTT market.

While there’s no set industry standard to measure online video quality of experience, rebuffering is the one indicator that consistently resonates in every conversation. Given the direct relationship between rebuffering and viewer engagement, avoiding or minimizing those interruptions are a top priority for most service providers. According to a senior manager at a major broadcaster interviewed for the report, “Where we see customer engagement drop is if they’re seeing that spinning wheel more than a couple of times. Our target is to keep that below 0.5%. When rebuffering is less than 0.5, 90% of sessions are completed. As soon as you get to 0.5-1% then the number starts to drop — 80%. As soon as you hit 1% you see the rate drop down to 50%.”

Recognizing that rebuffering needs to be kept at most to a bare minimum is one thing; tracking down the root cause when it happens is another. Given the breadth and complexities of video supply chains, issues can be traced to the ISP, CDNs, the end user device or browser, Wi-Fi configurations, available bandwidth, network traffic and even the content itself. “Delivering video is a complicated process with many loopholes and rabbit holes that can happen with that process,” acknowledged a VP of Strategy and Innovation for a multichannel broadcaster.

A quick scan of Twitter is enough to show that viewers are not shy when it comes to expressing their displeasure about an interruption. Audiences, in fact, are becoming increasingly sophisticated when it comes to communicating about and even identifying service issues. “We actually had an incident where we were playing with our transcoding and users got upset because it affected the bit rates,” said the CEO of a video aggregator. “We apologized and emphasized that it wasn’t and attempt to reduce quality or save on costs … We have a particularly tuned audience, who debate with our engineering staff. You have no choice but to engage.”

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That brings us back to the steep $85K price tag for a single instance of rebuffering. We reached the figure by first looking at the volume of video traffic for a major U.S. network between June 2017 and June 2018, which amounted to 370 million video plays. Using quality of experience data gathered through Akamai’s Media Analytics tool, we’ve seen that each instance of rebuffering results in a 1% abandonment rate. With an average play duration of just more than 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). At a CPM of $8, one instance of rebuffering could ultimately lead to $85,500 in lost revenue.

With these kind of numbers, it’s clear the stakes are getting higher and higher when it comes to video performance and quality. I encourage you to check out the report to learn more about delivering high-quality video streams and the impact it can have on the bottom line.

Alex Balford is a senior product marketing manager at Akamai responsible for media delivery solutions.