Improved video quality reduces churn

As video shifts from broadcast to streaming, maintaining a TV-like experience in terms of picture and audio quality has a big impact on revenue and shouldn’t be overlooked, according to a new whitepaper from Akamai.

Viewers increasingly expect video delivered over IP to be as reliable as programming watched on broadcast and cable. But that doesn’t always happen.

Rebuffering a video stream can result in the viewers watching a different show or, more severely, switching streaming services, the report said.

Akamai estimates that one instance of rebuffering per play on one network could result in a loss of advertising revenue of more than $85,000.

Here are Akamai’s calculations: Each rebuffering incident results in a 1% rate of subscriber abandoning a service. With video’s playing for an average of eight minutes, a single rebuffering episode translates to 496,417 hours lost, or 10.7 million ad impressions (based on 11 minutes of ad time per hour.) At an $8 CPM, rebuffering costs $85,000 in lost revenue,

On a more positive note, one SVOD provider improved video quality and churn was reduced by 90% as a result.

While the impact of buffering on a user’s experience is now increasingly understood, finding the cause can be a technical puzzle, the report said. The culprit for glitches could be the ISP, the user’s device, their WiFi setup, available bandwidth, network traffic or something to do with the content itself.

For OTT services that are ad supported, inserting ads can create more issues around video quality that impact the user experience, the report added.

Live OTT video, which is increasingly important as a selling point to potential subscribers, also presents challenges.

But Akamai concludes making the quality of OTT video better is not optional if the platform is to thrive.

“A failure to invest in improving video quality--in terms of consistency as well as peak quality--will impact the ability of video distributors to generate revenues from subscribers and advertisers, the report said.

Research for the report was conducted by MTM.