Global Media Format Report 2017

2016 was another year of explosive growth in the world of cloud media processing. This year’s data set reflects the usage of over 3000 leading broadcasters and content publishers. Our aim is to provide the critical data, trends, and insights that will help shape your media processing strategy.

2016 by the NumbersEncoding.com’s total encoding volume grew 63% from 2015, providing an even broader snapshot of the state of online video.

Global Processing CentersWe now operate 14 Global Processing Centers in five continents. We are significantly expanding our global

One of the biggest trends driving growth is the adoption of cloud resources by the world’s largest media and entertainment companies. A few critical elements have made these companies more comfortable in the cloud. First, transit speeds in and out of the cloud are faster than ever because of UDP technologies, making the processing of massive files a reality. Second, the stringent security requirements placed on cloud providers by industry and government agencies often exceed the requirements for in-house data centers. Third, cloud storage has been an entry point for large companies adopting the cloud. Once content is stored in the cloud, processing the content is a much more attractive option.

Peak Processing Cores Our customers depend on our platform to make massive compute resources available both quickly and cost effectively. Large content libraries can be processed in days rather than weeks and can be submitted to our platform without any operator configuration or advance coordination. We continue to track maximum simultaneous compute capacity as an arbitrary but an anecdotal way to monitor our platform’s growth and ability to meet massive processing requirements simultaneously. This year we hit our highest capacity on 10/20/2016 at 11:21 AM PST running 21,700 simultaneous processing cores or 684 32-core instances, representing a 27 percent increase over 2015’s peak.Average Formats per Source

For the first time since our launch in 2008 the average number of target output has decreased from 12 to 10,

20150

3

6

2016 2017

PB INGESTED

1.45

5.70

.915

TransitSFTP, FTP, HTTP, UDP

Screen Resolutions4K, 1080p, 720p, 480p

Adaptive Bitrate StandardsHLS, DASH, MSS

Digital Rights ManagementWidevine, Flash Access, Apple Fairplay, PlayReady

Closed Caption FormatsSCC, CEA-608, WebVTT, SRT, DXFP

Video Codecs & ContainersH.264, VP9, FLV, HEVC, WEBM

Cloud StorageS3, Akamai, Azure, SWIFT, Cloud Files, Google Cloud

Audio FormatsAAC, AC3, EAC3, MP3

5.9

14

10

Cloud StorageAmazon Maintains Dominance

Amazon Web Service’s S3 service continues to be the most popular cloud storage location in 2016 representing 68% of the total source location volume we ingested in 2016 up from 63% in 2015. We continue to see large media and entertainment companies moving mezzanine storage to S3 which fuels the adoption of cloud media processing in the corresponding AWS availability zone. Akamai remained a favorite destination for large media and entertainment companies to deliver transcoded and packaged output. OpenStack’s object based storage, known as SWIFT, seemed to stumble in 2016 dropping from 6% to 3%. The Google Cloud storage offering continues to struggle in the media processing market segment and has yet to break the 1% mark.

Amazon S3’s DominanceAmazon’s dominance continues as over 2/3 of all Encoding.com sourcelocations processed from commercial cloud storage providers comes froman Amazon S3 location.

OpenStack SWIFTAfter SWIFT made a strong appearance in 2015's job statistics, it dropped offsignificantly in 2016 from 6% to 3%.

Big Media Loves AkamaiAkamai's dominance of the media and entertainment sector is no secret andtheir penetration of this market was demonstrated by a large percentage ofour M&E customers using Akamai NetStorage as a destination for cloudmedia processing.

Google Cloud StrugglesAccording to our statistics, Google Cloud storage does not represent a significant source or destination location for media companies who have migrated to cloud media processing. From a technical capabilities perspective we believe the Google cloud compute and storage offerings are quite competitive, but they continue to struggle with penetrating the media processing segment.

1%

Google Cloud

2%

Cloud Files

3%

SWIFT

7%

Azure

19%

Akamai

68%

S3

UDP (Aspera) | 44%

SFTP | 32%HTTP | 4%

FTP | 20%

TransitHow content is delivered to the cloud

We evaluated how people are getting content to and from the cloud. Despite being less efficient, FTP/SFTP accounted for over half the transit in 2016 because of its legacy ubiquity. However, UDP, particularly Aspera’s fasp protocol, makes up a significant portion of the transit and continues to grow because its speed and security make it perfect for delivering high volume broadcast content.

Video Codecs & ContainersWhile we support virtually unlimited codec and container combinations processed by over 30 commercial and open source encoding engines, we highlight the top 6 most popular combinations and any significant codec movement in the statistics up or down.

SFTP/FTP Remains Steady Despite the TCP/IP protocol never being designed for moving large files around internet, FTP remains a popular transit protocol for getting files to the cloud, primarily due to its ease and prevalence on on-premise media servers.

H.264 Holds Steady H.264 grew slightly this year reflecting its device and browser support ubiquity. H.264 is the underlying codec within the most dominate adaptive bitrate standard HLS.

VP9 Makes a Strong Debut Adding support for the VP9 codec in 2016 was followed by very strong adoption and market interest in VP9 as an alternative to H.264, especially for high volume customers who benefit from the nearly half the data rate at the same quality when compared with H.264. VP9/DASH implementations sparked the most interest due to strong VP9 browser compatibility (~90%), however some market hesitation still exists when considering the significantly longer encoding times seen with Google’s libvpx encoding engine.

HEVC StumblesAfter some strong growth in 2015 which we attribute more to testing than production workflows, HEVC as a target output codec seemed to stumble in 2016 dropping over 50% from 6% to 3%. The 4K smart TV market remains the largest consumer of the HEVC codec, but we believe HEVC codec license uncertainty and a lack of mobile device compatibility is significantly inhibiting the market from further exploration of this codec and has actually made it retreat.

Flash Video Winding Down While Flash is still being used for specific uses and edge cases such as online advertising and legacy browsers, its days are numbered. Flash outputs continue to decrease year over year, and we expect to see the Flash video codec disappear completely from our report within 12 months. Flash deprecation continues with the Chrome M56 release where Flash was automatically disabled by default.

MVPD Workflows Migrate to the Cloud Historically, M&E companies have managed their Multichannel Video Programming Distributor (MVPD) workflows in-house using on-premise encoding infrastructure. This made sense. There were only a few “recipes” they needed to produce for Comcast, Charter, Time Warner, etc. and these video output profiles didn’t change very often. However, much has shifted in the past few years. M&E companies now distribute their content to an increasing number of MVPDs and virtual MVPDs (Netflix, Hulu, Amazon, iTunes, etc.) each having its own requirements on how content needs to be delivered. In addition, the pace of change for each distributor has also accelerated as end users adopt an increasing number of platforms from which they view M&E content (Cable set-top-box, OTT set-top-box, Apple devices, Game boxes).

Throughout 2016 we are reporting a significant increase in M&E companies migrating these traditional workflows to the cloud. By storing individual video components (video, audio, captions, meta-data) separately in the cloud, content providers can now assemble all the various output flavors on the fly for their increasing number of distribution points without having to revert back to a single high-bitrate Mezzanine file each time a new recipe is required. This is one of many use cases where leveraging cloud-based transcoding and packaging services can power more efficient workflows.

UDP Continues GrowthCustomers utilizing UDP technologies like Aspera showed steady growthfor the last two years. The inherent speed and security advantages make UDP a perfect protocol for ingest and egress of high-value mezzanine assets to and from cloud processing.

footprint with the launch of our entire media processing suite to include London, Ohio, Singapore, Seoul, and Mumbai. Availability of VOD and Live media processing platforms enables high-speed, low-latency content ingestion in 14 critical markets and includes our advanced private cloud in Oakland, CA.

as content publishers have worked to map the HLS output to a broader set of devices.

H.264 | 79%

HEVC | 3%

FLV | 5%

WEBM | 2%

VP9 | 11%

Petabytes of Source Content Ingested

4K 1080p720p 480p

720p | 23%

480p | 12%

4K | 10%

1080p | 55%

Flash Access | 28%

Apple Fairplay | 24%Widevine Classic/Modular | 35%

PlayReady | 13%

Adaptive Bitrate StandardsAdaptive packaging protocols serve as the industry standard for premium video publishers to improve the end user video experience across varying network conditions and support for a diverse set of playback devices. Although DASH has shown strong growth year over year, HLS remains the most popular adaptive bitrate protocol.

HLS the Industry Standard HLS remains the most prominent standard, primarily due to its broad device compatibility (iOS, Android), Browsers, and OTT players (Apple TV, Roku, Fire TV, Chromecast) and is especially popular with video publishers who require sophisticated DRM or Dynamic Ad Insertions integrations. Also supporting the standard is Apple’s continued improvement of the protocol. HLS v5 was announced in September 2016 and most notably included support for Fragmented MP4.

DASH Grows Strong growth from OTT providers has moved DASH ahead of MSS as the second most popular adaptive bitrate protocol according to our statistics. A relative lack of DRM and DAI integrations has held the protocol back.

7%MSS21%DASH

72%HLS

Screen ResolutionsDespite the industry excitement about 4K, the resolution makes up only 10% of our total output resolutions while 1080p makes up about half the resolutions. 720p remains a leading format for most mobile devices.

Mobile Devices While most current smartphones support 1080p, 720p remains theleading resolution for top-end streams as video publishers balance quality, playability, and delivery costs.

Digital Rights ManagementAs the biggest studios and broadcasters start to deliver their content to every device, secure encryption has become a vital component of the online video ecosystem.

Audio FormatsThe audio experience remains a critical component of the overall mobile and OTT video experience. Low bitrate audio “fallback” streams all the way up to high bitrate surround sound living room audio experiences are now commonplace within the same adaptive bitrate package, which ensures that the highest available experience is delivered to every device at every network speed.

CENC: The A Single DRM Format? Apple made a major announcement at WWDC16 which included support for encrypting fMP4 segments using MPEG-CENC (Common Encryption) within HLS. CENC is currently used by MPEG-DASH and is supported by all major HTML5 browsers. A public consensus is expected from Apple, Microsoft, and Google regarding the two cipher modes within CENC, CBC versus CTR. So, a truly single DRM format might just become a reality in 2017.

Multi Channel Audio Surges for OTTThe Dolby Digital (AC3) and Dolby Digital Plus (EAC3) grew significantly over 2015 aggregate data. The 5.1 and 7.1 codecs are gaining mobile device compatibility in the market, and the codecs are often used within the premium audio channel of the HLS spec which allows 192kbps 5.1streams to be paired with 1080p high-tbitrate video streams. This audio video combination offers a premium experience for connected televisions, such as the Apple TV and Roku that are connected to home theatre receivers.

Apple FairPlay Surges 2016 was the first full year that Encoding.com supported the FairPlay DRM framework from Apple, and we’re reporting a significant move from top video publishers to adopt this format to target iOS, tvOS, and macOS.

Closed Caption FormatsWe are reporting some consolidation of the sidecar closed caption file format to SCC (Scenarist Closed Caption ) as many video publishers have chose SCC for its bundled, multi-language support, representation of CEA -608 and compatibility with many client facing video players.

6%DXFP

11%SRT

21%WebVTT

39%SCC

23%CEA-608

ACC Delivers The AAC and Dolby HE-AAC codecs remain popular audio codecs with broad compatibility across desktop and mobile devices. The HE-AAC codec is especially popular within the HLS adaptive bitrate standard as it performs exceptionally well at the low 64k audio only bitrate required in Apple's HLS spec.

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AAC | 48%MP3 | 2%

EAC3 | 19%

AC3 | 31%