14 THINGS TO CONSIDER WHEN PREPARING AN RFP FOR YOUR NEW IPTV/OTT SERVICE
So you have decided to start an IPTV/OTT service and now you are looking for the best technology vendor that will provide you with the solution. If you are new to the industry then we would suggest that you gather as much information as possible on what is an IPTV/OTT service and how to start the whole process. To help you get started we suggest checking out our white paper on how to start the IPTV/OTT service.
Download the whitepaper here.
Once you have enough information and knowledge on IPTV/OTT you can move on to finding the best vendor and the solution that will fit your needs. So what exactly is your next step? Well, we would strongly recommend that you prepare a structured document where you will state your detailed and clear requirements for the vendor(s) based on your business goals.
The Request For Proposal (RFP) is a document in which the operator states requirements for the tech vendor needed to complete a project. Based on this document, companies that want to work on such projects then prepare a proposal for the operator.
Why would the operator bother with preparing such a document?
Large or state-owned operators, very often, due to their standard procedures almost always need to start their procurement process for the IPTV/OTT service with the RFP or RFI.
Small to mid-sized companies may not require RFP because of their internal procedures, however, it is recommended that they create such structured documents (maybe not as complex as those for the large operators) as it will enable them to clearly define what they need and to get better proposals from the vendor.
If the operator takes the time and effort to prepare the RFP it has a better chance of attracting the best-suited vendors. That way the operator spends less time choosing the best solution, reducing the overall time required to complete the project, and start their new IPTV/OTT service sooner. It is very important that the requirements the operator puts in the RFP are clear, understandable, and unambiguous to the vendors so they know right away if they can fulfill them or not. From the operator’s perspective, defining the requirements will get you what you need otherwise you might receive something that does not work for your case. Additionally, an insufficiently prepared RFP will make it much harder to compare proposals from different vendors.
Over the years, here at UniqCast, we have gained a lot of experience from a vendor perspective in working with RFPs on different projects across the globe. Also, several of our team members have worked on the operator side as well, handling RFPs from preparation to the selection stage. Preparing RFP is an important step in building a new streaming service, so we wanted to share our experience to help you start the process more efficiently.
Before you even start preparing the RFP there are a number of questions that you should have an answer to in order to make the RFP fitted for your actual needs. In this article, we will focus on the things you need to consider when writing a clear, professional, and compelling RFP for your new IPTV/OTT service that will make your decision-making process easier and faster.
Following is a compiled list of steps you need to consider when writing your RFP.
1. Define your business goals for the IPTV/OTT service
To be able to define the business goals you need to answer a fundamental question: Why do I want to start an IPTV/OTT service?
Goals are going to differ from operator to operator depending on the size of the company, their core business (DVB, Mobile, OTT or Fixed operator, Broadcaster, Virtual operator/PaaS provider, or Content owner), and the markets they operate in.
However, most operators can ask themselves the following questions that will help them better define their goals:
- Are you looking to extend your reach and attract new customers (fixed operator adding multiscreen OTT service)?
- Do you wish to add a new service to extend your current offering in order to increase revenue and also to keep your clients (a mobile operator that wants to add IPTV/OTT service)?
- Are you a market challenger looking to become a market leader?
- Maybe you wish to monetize your existing content or distribute new content?
Defining business goals is a key step in this process as it will be a basis for technical requirements and everything else you will be writing in your RFP.
2. Define business models
If you have a clear idea about your business goal next thing to consider is how you plan to actually monetize your video streaming service. Will it be a subscription-based model in which you will charge your subscribers for a monthly fee or will you have an advertising-based model where you will offer content for free and show ads to create a revenue stream from the advertisers? Maybe you will go for the transactional model in which you will charge for each specific content as well as offer pay-per-view options for live events? Maybe a combination of those models is the best fit for you?
All models have their pluses and minuses so make sure you are familiar with all of them to choose the best one that will enable you to reach your business goals.
Once you decide on your business model you will be able to define the technical requirements of the solution. For instance, you can require flexibility in creating subscription packages, or perhaps have advertising support enabled in your solution.
3. How will you attract subscribers to your video streaming service?
Now that you have your business goal(s) and business model you should figure out how to attract subscribers. This step requires that you get to know your subscribers well. It is easier if you are working with an existing customer base rather than trying to build one.
Regardless, you need to learn what will motivate subscribers to join your service, how to keep them engaged, and finally how to make sure they stick with you long-term.
The content is obviously your first magnet for the subscribers so you need to make sure it is engaging. Deciding which kind of content you want to offer will determine what related features will you require in the solution. For example, is it just VOD, just live TV and Catch-up TV, or both?
In case you do not have content prior to starting your service here at UniqCast, we can help you with that as well. That’s why as a part of our turnkey solution we offer our clients content consultancy and help them handle this aspect of the service.
After you have decided on the engaging content and its type, you need to consider what level of protection will your content need. For instance, streaming premium movie or sports content usually requires studio-approved DRM protection, while self-produced, local content requires a lower level of protection. Having a multiscreen service usually means that you will need multi-DRM content protection as a requirement. Most often you will be able to cover that by requiring the support for Widevine for Android devices, and Fairplay for iOS devices.
The next question is what devices will your content be available on? Delivering content on the most popular platforms and devices will help you attract more subscribers. You can offer content on Android STB where you will need to decide whether to use Android TV or AOSP. Next, you will need to cover mobile devices, PC, and Smart TVs and that will cover most of the devices your subscribers will own. The list of devices you want to cover means you will be adding new requirements to the RFP. For instance, if you will be using STBs then hardware characteristics of the STB need to be defined (WiFi, AV outputs, support for CAS/DRM, video codecs such as AVC, AV1, or HEVC, performance in DMIPS, memory, and so on).
Finally, to attract subscribers to your service you need to have a solution that is visually appealing and attractive but most of all, easy to use. The solution must work fast on all devices. Add to that a well-suited pricing offer and you can expect positive results from your service. Great content delivered with a premium user experience for the end-user at a price that fits your target audience is a perfect mix for success.
Of course, once you start the service you will continuously need to tweak it to make sure that you keep your churn under control. More on this information can be found in our whitepaper on the marketing strategy for the IPTV/OTT service.
Download the marketing strategy whitepaper here
4. Where do your subscribers come from?
Now that you have an idea of how you plan to attract subscribers you need to decide on your target market. Do you plan to reach subscribers within your region, country, or even globally? Your decision will have an impact on the requirements and you will need to answer questions such as: Where will your main data center be located? What kind of IP connectivity do you have between your data center and the location of your target audience? Based on these answers you can define whether it is sufficient to have streaming only from the central location or you need to have a CDN and with how many edge streaming locations. That will enable you to decide whether to set up your own private CDN or to use one of the global CDN providers.
In the RFP you will either ask the vendor to secure the CDN (if needed) or you can decide to deal with this element yourself. Regardless of your decision, we would always suggest that in your RFP you request an IPTV/OTT platform that offers content and subscriber management with streaming and the ability to build your private CDN as an integral part of the platform. In this way, you will simplify the solution, remove the need for additional integrations, and optimize operational cost as well as the initial investment.
5. Define your technical goals
What are your goals from a technical perspective? If you already have an existing IPTV/OTT solution, you will need to decide if you will be replacing your legacy platform or looking for a completely new installation? Maybe you have some existing HW or your private cloud setup that you want to reuse? Also, think about maintenance and operations. Will you have the manpower and the know-how to handle it, and what is the easiest solution for you?
What kind of flexibility do you expect from your platform (like the ability to make UI changes or organization of content that you can configure on the backend yourselves)? What is the level of autonomy you will have in running the service without the need to contact the vendor? The next step is to have an idea of connecting your existing systems such as CRM, billing, monitoring, backup systems, and your new solution. Which integrations do you need with your existing environment?
Yes, there are a lot of questions but this is a perfect time to answer them. The later you do it the more expensive it will be in the end. Do take the time and think about what changes or additional technical requirements you might have in the future. Will you be able to easily scale your service? For example, very often, when working with large vendors, over time you get stuck and any changes become rather costly or even impossible. On the other hand, if the vendor is too small they might not have the ability to deliver everything you require.
To see a list of potential integrations and figure out if you will be needing any of them feel free to download our tech paper to get a better idea of what is possible or what you might need.
Understanding technical goals means you will be able to be more precise with your RFP requirements.
6. On-site or cloud setup for your new IPTV/OTT service
Another important aspect of your future service is whether you will host the service on-site (on your premises) or in the cloud. The on-site setup means higher CAPEX but better control, later on, in keeping the operational costs (such as lower bandwidth costs) under control. This works best if you already have an actual IT team to manage the operation, the budget for the infrastructure, plus the maintenance abilities.
On the other hand, a cloud setup might be a better fit if you are starting your service “on a budget” and need to minimize your CAPEX and create a steady revenue stream as soon as possible. Cloud setup provides scalability and flexibility, usually enterprise-grade security, cost-efficiency, no maintenance for the operator, backups, remote access, accessibility, plus the guaranteed up-time.
If you decide to have your setup in the cloud or for the platform to be installed in your private cloud, it is important to require the support for elements like the microservices, dockerization, orchestration, automatic failovers and scaling, the compatibility to be installed on different cloud providers, even the option that the operator has the installation on its own private cloud.
Again, the more decisions you make will help you define more detailed tech requirements (What HW is required? Which orchestration tools the solution needs to support? and so on…)
7. Single-vendor or multi-vendor approach
So far you have figured out quite a few things which is great. Now is the time to figure out if it is better to go for a turnkey solution that is delivered through a single vendor that will take care of all the elements necessary for the service to function properly, or do you have the manpower to handle different vendors for different parts of the service yourself (middleware, DRM, streaming and CDN, encoders, CRM, EPG, Billing)?
With a single vendor, you get a single point of responsibility, and you avoid the situation of transferring responsibility among different vendors. Single-vendor approach is the solution if your vendor is an experienced system integrator and a vendor that develops its own solution and can actually deliver the proper turnkey solution with integrated streaming and multi-DRM. That is especially suitable for small to mid-sized operators that have neither the manpower nor the know-how to deal with individual vendors for each element of the service. The multi-vendor approach requires more people on the operator’s side who understand the specifics of each element of the solution, define, control, and execute different integrations and that can take a lot of time in this process.
Depending on the approach you choose you will either send RFP to vendors who can deliver a turnkey solution, otherwise, you will need to prepare RFP that you will be able to send out to different vendors for different elements of the solution.
8. RFP document structure
If you are not in the category of a big telco or some state-owned operator then the RFP structure does not need to be too detailed. However, it is always a good approach to have a structured document as it will simplify the decision-making process.
Here are a few elements your document structure should have:
- Write an introduction. Why are you going into this project and what do you hope to achieve with the project?
- Explain your company’s history and project’s background.
- Define high-level business and tech requirements.
- Describe solution architecture with an understandable diagram (current setup, with desired changes) or in case of a completely new solution provide architecture on how the solution should be integrated with your other systems (CRM, Billing…)
- List all detailed technical requirements in the format of a Statement of Compliance
- Explain how vendors should respond. Write the structure you expect your vendors to follow when planning their response to your RFP. When all vendors follow the same format, responses are easier to evaluate.
- Outline your selection criteria.
- Note your timelines.
Again, it is up to the operator on how detailed these sections should be or if additional sections are necessary. It is important, however, that the RFP is easy to understand and very clear, and unambiguous to the vendor. That is the only way to get proposals that you can then compare properly and make the best decision. Also, it is not a problem if you are unsure about any of the elements of the RFP and how to prepare them. You can always get in touch with us as we would be more than happy to help you.
9. Licensing model
Another important step is whether you want to own your solution or pay a monthly fee to the technology vendor. Just like with the choice of having the solution on-site or in the cloud, paying the one-time or monthly fee usually comes down to your budget. For small to mid-sized providers it is more likely they will choose to pay a monthly fee that is usually structured based on the number of subscribers. This system means the operator will pay more as they grow their subscriber base allowing them to grow without the large initial investment. On the other hand, the operator can choose to pay a one-time fee for a number of perpetual licenses. The operator is charged again only when they surpass the number of purchased licenses. What is better is dependent on whether you can accurately predict your initial number of users, the annual growth rate of subscribers, and the maximum potential of the market you plan to operate. That should enable you to do the calculations based on the costs and the pricing you can offer to your subscribers. Whichever you choose, remember that starting an IPTV/OTT service is not an overnight success but an investment that will take some time to pay off.
It is important to look for a vendor that can offer you flexible business plans and give you proper advice on what might be a better option for your specific business case.
Based on your decision on the licensing model you will need to define the requirements in the RFP. If you are unsure at this point then you can always require the availability of both options. It is important to look for a vendor that can offer you flexible business plans and give you proper advice on what might be a better option for your specific business case. Your tech vendor needs to be a partner and a consultant for your streaming video service. The chances are that they have more experience and have seen what actually works and what does not especially if you are working with a vendor that has experience with similar projects globally.
10. Technical requirements
So far you have considered your business and technical goals, where your subscribers are and how to attract them, whether you will go for a cloud or local setup using a single or multiple vendors, and what licensing model you want.
Now it is time to transfer all your business requirements from previous sections into detailed technical requirements.
Based on the components you decide to include, you will need to prepare detailed requirements for each component (STB, transcoders, multiscreen client apps, CMS, analytics, streaming & CDN, DRM, monitoring, stream monitoring, Billing/CRM, …). Every project is somewhat different and specific so maybe some of the components listed here will not be used or maybe you will add others. It is important to list all detailed technical requirements in the format of a Statement of Compliance.
From a technical perspective, this is a crucial part of the RFP document. Statement of Compliance should contain technical requirements and a predefined format for answers from the vendors. This format should enable vendors to give short answers like fully compliant, partially compliant, or non-compliant and also have the space to provide an explanation for each requirement. Make sure to define what it means when the answer is fully compliant, partially compliant, or non-compliant. For example, you can define a state of compliance in the situation where a vendor has a feature in its roadmap but is not yet ready at the moment of filling out the RFP. Would you consider that partially compliant, non-compliant, or fully compliant?
To help you prepare a detailed RFP covering all the components of the solution you are welcome to download our Tech paper and our whitepaper on how to start an IPTV/OTT service. They will give you a complete overview of components, features, and technical requirements that you should cover in your RFP.
11. Dimensioning the IPTV/OTT solution
At this stage, you should be able to define specific parameters that will enable vendors to dimension the solution. You will need to define the parameters like the ones listed below.
For a more detailed table of elements required for the proper dimensioning of the IPTV/OTT service download our tech paper.
- Number of subscribers
- Number of devices (STB, mobile, PC)
- Number of Linear TV channels (and radio) (SD/HD/4K)
- Required bandwidth per channel (Mbps)
- Number of Catch-up TV SD/HD/4K channels
- Catch-up TV time interval in hours
- Number of Pause & Resume SD/HD/4K channels
- Pause & Resume time interval in hours
- Number of SD/HD/4K VOD assets
- Average SD/HD/4K VOD asset size in GB
- Number of new VOD titles per month
- HLS profiles with corresponding bandwidth for different types of Live or VOD content
- nPVR storage size per subscriber in hours
- nPVR recording expiration time interval in days
- Percentage of subscribers using the nPVR service
- Max Linear TV/VOD concurrency
- Streaming concurrency separately for Linear TV, Catchup TV, nPVR and VOD
Based on the above parameters, vendors will be able to define the below-listed items and prepare a proposal based on them:
- Number of transcoding nodes
- Number of streaming nodes
- Number of CMS servers
- Number of concurrent streams
- Max streaming bandwidth in Gbps
- Storage capacity for Catch up, nPVR, VOD on origin servers
- storage/cache needed per edge streaming server
When defining a list of features you start off with the list of features that are necessary for you. Additionally, you can create a list of nice-to-have features as well.
Following is a list of features that are necessary in order to have a basic service. To get a complete list of possible features with more detailed descriptions for each one download our whitepaper on how to start an IPTV/OTT service.
- Linear TV
- Centralized Search
- Catch Up TV
- Start Over TV
- Pause and Resume
- Program Recordings
Do you plan to combine your existing DVB infrastructure with catch-up TV and multiscreen features in order to prevent churn? Do you see adding OTT solutions as a logical next step for your DVB-C, DTH, or DTT service? Do you want to provide your subscriber with one channel list, failover between HLS or DVB channels, and a seamless experience regardless of the channel source (satellite, Internet, cable)?
If so, you need to include such DVB requirements in the RFP as this is a complex task and you want to make sure that the vendor can deliver what you need.
We mentioned a few times that choosing a solution with premium UX that is very simple to use is a must. This aspect is very important particularly later on when you will be focusing on user engagement and reduction of churn. For example, offering multiscreen applications with premium UX that require only up to 6 buttons on the remote controller will keep users more engaged than a more complicated solution. It is important that you add UX requirements to the RFP as well.
13. How to prepare requirements that will get you comparable answers from all vendors?
You want to be able to choose your vendor based on proposals you can actually compare. That is why you want to make sure that each of the requirements listed is very clear, precise, and unambiguous as that is the only way to avoid getting dubious answers from the vendors. You want to structure the RFP in a way that the answers you receive are clear, comparable, and enable you to actually make a decision.
Vendors should be able to provide you with short answers such as fully compliant, partially compliant, or non-compliant. You need to explain what each of these answers means. For instance, is a vendor compliant or not in a situation where they have the required feature in the roadmap but are not yet available at the moment of filling out the RFP? Also, add sufficient writing space for an explanation for each requirement.
Prepare your requirements in a way that different proposals you receive contain equivalent and comparable information. RFP that enables you to grade the provided answers will help you avoid omitting something important. Finally, you want to precisely point out what requirements from the statement of compliance must be included in the proposal and what can be added later on, so you will be able to decide between comparable proposals.
14. Whom to invite to RFP for the IPTV/OTT service?
By filling out previous sections you should have an idea of the type of vendor that would be a good fit for your needs. Focusing on the ones that actually have experience and a proven track record that you can verify and get confirmation from the existing clients is a good approach. If those vendors are also system integrators that develop their own solutions is even better. Additionally, a great fit is vendors that have previously worked with a similar profile (IPTV or OTT or DVB projects, projects with DRM/CAS) of the operators like yourself enabling them to better understand your requirements and to consult you on your steps throughout the project.
Another element that can be an indicator of what to expect from future cooperation is the size of the company. Working with a large integrator means they will usually charge you a premium price and provide less flexibility. On the other hand, if the company is too small there is always a risk of the company’s ability to roll out everything on time plus provide proper support to the operator. Definitely, something to bear in mind.
Your video streaming service will not be a success without a proper tech vendor so make sure you have found the right partner. Take the time and the effort to know what you are looking for and to recognize if your tech vendor can actually deliver the results.
We hope that you found this information useful and that we have managed to get you into the proper mindset when it comes to preparing the RFP for your IPTV/OTT service.
There are many questions to be answered but the more detailed you are, you will receive more quality proposals from the vendors. After all, starting an IPTV/OTT service is quite an extensive project. However, if it is prepared properly it will save you a lot of time, energy, and money down the road.
Just like any other project, it comes down to clearly defining your business and then technical goals and requirements in order to find the best-suited solution and the vendor that will be able to consult you on all the aspects of the video streaming service.
If you would like to know more about us and how we help our clients all over the world in running their IPTV/OTT/DVB services you are welcome to get in touch with us. We are more than happy to share our knowledge on how to run a successful and profitable video streaming service, how to increase your subscriber base, and how to decrease churn.
UniqCast helps Telcos, ISPs, Broadcasters, OTT, mobile, and DVB operators, to build turnkey IPTV/OTT/DVB multi-screen solutions in a cost-efficient way, delivering an enjoyable TV experience to the end-users. We provide a single point of contact and full, end-to-end responsibility, to minimize risks for the operator and guarantee a successful launch of the TV service. Every TV system is unique, we simply help you deliver it. For more information get in touch via firstname.lastname@example.org and find out why UniqCast has been trusted with IPTV/OTT/DVB projects on 4 continents across the world.