Transforming Streaming Economics with Perceptual Quality-based Optimization

The past decade in media and entertainment has been characterized by significant disruption, particularly in the streaming sector. In this maturing market, streamers face the challenge of finding ways to differentiate themselves and become or remain profitable. One of the most effective strategies for achieving the goal is reducing streaming costs, specifically by lowering bitrates. However, this must be done without compromising video quality, which requires a precise balance that can only be achieved through accurate measurement and tracking of video quality using perceptual quality metrics.

Strategically, in a mature market, industry leaders need to focus on three primary strategies to maintain sustainability: managing costs, improving customer retention, and discovering sustainable growth methods.

Managing Costs
Content remains king in the streaming world, but the costs associated with content creation and distribution must be carefully balanced. One significant cost for streaming platforms is the content delivery network (CDN) bill, which can be optimized by reducing bitrates. The key is to do this without also reducing video quality. This is where perceptual quality-based optimization comes into play.

Enhancing Customer Retention
Customer retention is critical in an environment where churn rates are high. Providing high-quality content that engages viewers is essential, but it is equally important is to ensure a consistent, high-quality experience, and to understand how viewers perceive quality across different devices and viewing conditions.

Discovering Sustainable Growth Methods
In a saturated market, innovation is key to finding new revenue streams. This could involve introducing premium tiers, exploring new advertising opportunities, or identifying new revenue sources that have yet to be considered. Though all three strategies should be considered, one of the shortest paths to profitability is to reduce costs. And one of the biggest costs for streaming platforms is CDN (content delivery network) delivery charges.

The volume of bits moved through CDNs directly impacts streaming costs. While reducing the bitrate can lower costs, it must be done without degrading the video quality. There are several established ways to control bandwidth, while using the same codec, also known as rate control, including Variable Bit Rate (VBR) encoding, Content Aware Encoding (CAE), and per-title encoding. These methods can be effective in reducing bitrate, however they do not guarantee similar quality when compared to approaches they replace.

To reliably balance quality and bitrate reduction, it is essential to measure and track video quality accurately using perceptual quality metrics. These metrics must correlate with human visual perception and work seamlessly across content type, focus areas, types of impairments, and the devices on which the content is displayed.

Human Visual Perception and Video Quality
Humans have a complex psycho-visual response to video, which traditional quality metrics often fail to capture accurately. A robust perceptual quality metric should emulate the human visual system, recognizing where bitrate reduction would be imperceptible to viewers. This allows for targeted bitrate reduction without noticeable degradation in video quality.

Additionally, a successful system should be able to make real-time decisions about video quality. It must also operate efficiently, support all types of content (including high-dynamic-range (HDR) content), and adapt to different devices and viewing conditions to ensure consistent quality across all devices.

Implementing Perceptual Quality Metrics
An example of a technology that accurately measures video quality based on human perception is IMAX VisionScience, which emulates the intricacies of the human visual system. It supports all types of content and includes both reference and no-reference metrics for measuring quality when there is no source comparison. The technology operates on the understanding that humans perceive changes in quality in distinct ‘steps’, creating zones where quality loss goes unnoticed by the human eye.

This insight provides a valuable opportunity to decrease bits in a way that remains indistinguishable from humans. Because impairments are perceived differently by device and screen size, it’s crucial to know exactly how low the bitrate can go by device type as a larger screen shows more impairments than a smaller screen does.

Achieving Bitrate Savings with Minimal Quality Loss
With a reliable perceptual quality metric, streaming providers can achieve significant bitrate savings. It is not unreasonable to expect savings of 15% or more, with little to no difference in perceived quality. This can translate to millions of dollars in annual savings for larger streaming companies, making it a compelling strategy for reducing operational costs.

Practical Considerations for Implementation
While the benefits of perceptual quality-based optimization are clear, practical considerations must also be addressed. The implementation should be cost-effective and offer a positive return on investment (ROI). Any solution must integrate seamlessly into existing workflows. By communicating via API with existing encoders, it should optimize video content in real time, resulting in smaller files and significant cost savings without compromising the viewer experience.

Ensuring a Positive ROI
A critical question for streaming providers is whether the ROI of optimization justifies the investment. The best pricing model for optimization technology is one based on a percentage of the savings achieved. This ensures that the cost of the technology is always less than the savings it generates, making it a no-brainer for streaming platforms.

Conclusion
In a competitive and mature streaming market, finding ways to differentiate and remain profitable is essential. Reducing streaming costs by lowering bitrates without compromising quality is a viable strategy. However, achieving this balance requires accurate measurement and tracking of video quality using perceptual quality metrics. Software applications such as IMAX StreamSmart offer practical solutions for enabling significant bitrate savings and ensuring a high-quality viewer experience.

By focusing on cost management, customer retention, and sustainable growth methods, streaming service providers can navigate the challenges of a mature market and enhance their profitability and sustainability.