Limelight Networks Announces '2017 Online Video Service Market Outlook'

Limelight Networks (Country Manager Park Dae-sung) announced the '2017 Online Video Service Market Outlook'.

Limelight Networks cited the expansion of 4K TV adoption, intensified competition in OTT services, the popularization of augmented reality (AR), and the increase in cyber security threats as key points to watch in the video service market in 2017.

Park Dae-sung, General Manager of Limelight Networks Korea, said, “The online video industry is expected to continue undergoing many changes and growth in 2017. Regardless of generation—including Baby Boomers, Generation X, and Millennials—the boundary separating TV and online video is becoming blurred as the devices available for watching videos become more diverse.”

Furthermore, “the most definite change is that users no longer pay much attention to which device (channel) is used to watch a video. There is no longer a need to sit in front of a designated TV to watch a program, and it has become possible to watch or save videos whenever one wants. These changes in video viewing patterns are driving changes in the market.” "Limelight Networks will focus on supporting the safer use of rich content on various high-definition devices," he said.

The '2017 Online Video Service Market Outlook' announced by Limelight Networks is as follows.

Expansion of 4K TV penetration

Sales growth for 4K TVs is expected in 2017, while consumer confusion regarding HDR (High Dynamic Range) and HDMI 2.0 standards is also likely to persist. Next year, global 4K TV sales are projected to rise, with over 50 million units sold. However, is this driven by consumer demand or industry momentum? A visit to a major electronics store reveals that advertisements for 4K TVs prove this point. Prices for 4K TVs have dropped to levels not significantly different from 1080p HD.

What is the reason for this? The answer lies in the distance people watch TV. There is no clear difference between 4K and HD screens. People would likely need to sit very close to a 4K TV to perceive the higher resolution. However, viewers at home do not bring their chairs closer to watch TV. From a simple marketing perspective, it is true that sales based on numbers are the easiest. The logic is: "4K sells more than 1080p, so it is superior."

Beyond resolution issues, 'technologies' are underpinning what makes 4K stand out. High contrast ratios and HDR have a significant impact on the viewing experience. 4K TVs supporting HDR and high contrast ratios are being sold in the market; while these products are more expensive, a standard has not yet been established. Since no standard has been set, there may be more risks associated with purchasing a 4K set.

Intensifying competition in OTT services

Currently, over 3,000 OTT (Over The Top; TV services transmitted over the internet via set-top boxes) services are engaged in fierce competition in the market. However, according to a recent "State of Online Video" report by Limelight, the average number of OTT services subscribed to by a household is three. While some services will rely on advertising revenue, others may disappear. OTT service providers are expected to form partnerships to offer packages consisting of various services within the same genre. This was a very common practice in the early days of cable TV. However, overall, there will likely be limitations to the long-term success of such services.

Popularization of Augmented Reality (AR)

AR is currently receiving the most attention from the media, and it is expected to become more mainstream in the long term. Unlike VR, AR can be considered only partially immersive. AR is a technique that augments the actual physical world viewed by the user by overlaying virtual images. The image below shows a driver navigating within a city and an AR glass view for a visitor in Venice. Blue direction guidance displays parking lots, road signs, and local information.

While VR requires wearing a video screen on the face, AR has the potential to bring innovation to mobile communication and applications. This can be utilized in various applications such as social media, sports, navigation, and advertising.

Increase in cyber security threats

The DDoS attack targeting the DNS (domain) service provider Dyn last October was meticulously planned to disrupt data centers worldwide that controlled the internet address lookup services provided by Dyn. As a result, users of over 1,200 domains managed by Dyn were unable to access the services they needed. However, the concerning aspect is that this large-scale DDoS attack is merely the starting point for future targeted attacks aimed at specific organizations. Many security experts believe that this attack was a "weapons test" intended to test the capabilities of the Mirai botnet, assess its response and recovery strategies, and prepare for future deployment against other organizations.

Now is the time to focus on defending against cyber security threats. In particular, as seen in large-scale DDoS attacks carried out by IoT devices such as CCTVs, DVRs, and routers infected with the Mirai malware, a massive firewall is required to defend against threats. Furthermore, it is important to prevent the spread of threats across the network by integrating cyber security threat blocking technology into the CDN.