Tuesday, July 30, 2013, 9:35 AM ET|Posted by Will Richmond
A viewer finds an online video, clicks play and increasingly, expects a TV-like experience. Hundreds of millions of times per day around the world, this sequence of events happens, and it's only growing in frequency. While surging demand is great for the overall ecosystem, network providers / broadband ISPs are continually struggling to keep up with spiraling traffic, pressed to invest in their networks to create more capacity while still maintaining a strong ROI.
Therefore, any incremental improvement in networks' efficiency in delivering video traffic can quickly add up to huge cost savings, and that's exactly what Qwilt, which has raised another $16 million (led by Bessemer Venture Partners and bringing to $40 million total raised to date), does. Qwilt is in the "transparent caching" business, with networks deploying the company's software solution on off-the-shelf hardware at the edge of their networks to deliver the thin slice of most-frequently viewed video to their users.
As Mark Fisher, VP Marketing and Biz Dev, and Dan Sahar, VP, Product Marketing/co-founder, explained to me yesterday, Qwilt's QB-Series Video Fabric Controller slots into the operator's local network, which has not yet been optimized for video delivery. The QB "edge cache" device identifies the most popular videos, monitors ongoing usage, stores them and delivers them when requested by viewers. It does all this transparently and without impacting other network operations.
Not only does this create savings in network investments ($100 million plus over 5 years if 50% of an operator's video peak traffic can be cached, according to an example business case Qwilt provided), importantly, it also improves the viewer's experience. Based on Qwilt's data, in the U.S., for YouTube, an operator's deployment of Qwilt resulted in 58% better bit rate delivery. Dan and Mark said the improvement is even better internationally where they've seen it in the triple digit percentages. Qwilt has over 25 deployments to date and Dan and Mark said the biggest one to date in the U.S. is in progress, and will be announced in the Fall.
Qwilt and other technology/service companies helping network operators cost effectively deliver video are important because for the online video medium to succeed, a high-quality user experience is paramount. Neither consumers nor advertisers pay for lousy experiences, so the "under the hood" technologies used to help offer a seamless, TV-like experience are the ones that ultimately enable successful monetization (ads, subscriptions, pay-per-user, etc.). Making sure video delivery works well is critical for everyone in the online video ecosystem.