The demand for video and other data-intensive streaming formats has exploded in recent years as giant internet content providers like Facebook, Netflix, Hulu, and YouTube are being called upon to deliver an insatiable tsunami of streaming content to their billions of users. Live video streaming already accounts for over two-thirds of all internet traffic and that number will jump to 82% by 2020, Cisco predicts in its June 2016 Visual Networking Index report.
To deliver videos, games and other high-bandwidth content to their global end users, providers use a content delivery/distribution network (CDN.) A CDN is a large, geographically distributed network of specialized servers that accelerate the delivery of web content and rich media to Internet-connected devices through a technique called ‘edge caching.’ The process entails storing replicas of static text, image, audio, and video content in data centers around the ‘edges’ of the internet. The idea is that user requests can be served by a nearby edge server rather than by a far-off origin server.
Mitch Liu, co-founder and CEO of The Theta Network, a subsidiary of SLIVER.tv, a startup that has been at the forefront of developing next-generation video streaming technologies for VR and spherical 360° video streams since 2015 and a popular esports live streaming destination, told us in a phone interview:
One of the major problems with the current CDN model is that the number of data centers, or ‘points of presence’ (POP) as they are called in the industry, are limited and not close enough to many viewers, especially in less developed regions. This ‘last-mile’ link is usually the bottleneck of the streaming delivery pipeline and often leads to choppy streams and frequent rebuffering. That, understandably, makes for a less than optimal user experience and leads to lots of unhappy customers. Nobody likes it when they are watching Game of Thrones and their screen freezes for a minute or so.
The biggest player in the CDN market is Akamai, which counts more than 216,000 servers in over 120 countries and more than 1,500 networks around the world. Taken together, that translates to delivering roughly 30% of internet content. In the past couple of years several giant content providers, including Netflix and Facebook– have built their own CDNs to reduce costs and control their content all the way to the customer.
That, Mitch Liu said, costs millions of dollars a year to maintain and operate and is still no guarantee of optimal customer experience:
We are dealing with an internet infrastructure that is 20 years and was not designed for the demands of video or gaming. The combination of live streaming and on-demand video content has put an enormous strain on content providers, both in terms of data and costs/business models.
What’s the solution?
The Theta Network began with a simple question. What if we could incentivize our users who have high-end gaming PC’s and good bandwidth to relay our video streams to friends and other viewers in their own neighborhoods? Suppose users around the globe could be incentivized to contribute the excess capacity of their devices as “caching nodes” whereby they form a video delivery mesh network capable of delivering any given video stream to viewers anywhere around the world. As explained in the Theta White Paper:
The company’s mission is to leverage the blockchain technology to create the first Decentralized Video Streaming and Delivery Network whereby video viewers are incentivized to share redundant computing and bandwidth resources to address today’s video streaming challenges. Using the Ethereum EVM “World Computer” metaphor, the Theta Network can be viewed as the “World Cache” formed by the memory and bandwidth resources contributed by viewers.
Added Liu:
We realized that this idea, of having someone in a remote location using their spare resources and bandwidth to “cache” and “relay” video streams, could revolutionize the internet delivery of esports, entertainment and many other industries.
In November of 2017, Theta introduced the Theta Network and a token designed primarily designed to reward viewers and those who share their bandwidth and other resources with the Theta network. Caching nodes earn Theta Tokens for caching and relaying video streams to other users, while advertisers are able to fund ad campaigns with tokens to support content creators, streaming sites and viewers. These viewers, in return, can give their tokens to their favorite content creators.
For would-be content creators, the added bonus is that any streamer can get on the network and upload their own streams for all to watch by leveraging other users which serve as “ingest nodes”, which will automatically convert them into the right formats (different resolutions, bit-rates, etc) and deliver them to the caching nodes.
In January 2018, Theta released an ERC-20 token that can be used on the SLIVER.tv esports site, which get 5 million hits a month, where it has already proven to be very popular. Current Theta ERC-20 tokens will be exchanged 1:1 for Theta blockchain tokens by the end of Q4 2018 once the Native Theta network is launched on its new blockchain.
SamsungVR joined the Theta Media Advisory Council in April, with the goal of furthering the technical development of the Theta Network. The SamsungVR platform comprises 360° VR streaming content that can be viewed across every device from mobile to PC to cutting-edge hardware like the Gear VR headset. The SamsungVR library offers a diverse selection of immersive experiences across sports, music, fashion, esports and many others.
In May, Theta announced a strategic partnership with Play Labs, a startup accelerator held at the MIT Game Lab on the MIT campus in the summer of 2018. As part of the agreement, Theta will sponsor the summer 2018 batch of Play Labs (www.playlabs.tv), which was expanded to include blockchain startups coming out of the MITecosystem. This year’s batch has a particular focus on blockchain in addition to AI, AR and esports. Startups participating in Play Labs can integrate the Theta protocol for video streaming, music, entertainment, esports and other media applications, with a focus on reducing costs and increasing access to content.
My take
Theta’s biggest promise is that using its blockchain streaming sites and platforms can offload up to 80% of CDN costs, while improving user experience, and driving new revenues through Theta powered premium goods and services. If Theta pulls it off, then that would be disruptive in the streaming video space.
The novel element of The Theta Network as a blockchain business case is that it pushes the concept of blockchain beyond cryptocurrency and points the way for using non-currency incentives of stable value to drive and reward engagement and participation.
Editor’s note: This sounds attractive on its face but the problem it is trying to solve does not necessarily get magically solved, simply by introducing blockchain based incentives. It is the uneven distribution of bandwidth that presents the real challenge. In this case, Theta is relying on what amounts to a bribe to fix that, hoping that a system of bootstrapping solves for uneven bandwidth. Tie that to an ICO that’s seen wild price fluctuations and…I’m skeptical but will give Theta the benefit of the doubt – for the time being.