The Video Business is in the Best of Times or the Hardest of Times? Mark Donnigan Marketing Leader at Beamr
Read the original LinkedIn article here: The Best of Times & Worst of Times in the Video Business
Mark Donnigan is Vice President of Marketing at Beamr, a high-performance video encoding technology company.
The Video Business is in the Best of Times or the Hardest of Times? Mark Donnigan Vice President Marketing at Beamr
Can a 4 character innovation conserve us?
This is an interesting concern due to the fact that there is a paradox emerging in the video service where it feels like the the finest of times for numerous, but the worst of times for some.
Here we have Disney revealing that they have actually already accrued one billion dollars in loses, and this even prior to launching their direct to customer business. And then we have Verizon Media revealing sweeping layoffs which represent an exit from some of the core home entertainment service and technology companies that were operating under the Oath umbrella.
And obviously there isn't a reporting interval that goes by where the cable cutting numbers have not grown, which puts increasing pressure on the video side of the provider company.
Netflix stock is on the rise again, permitting the company to invest in content at levels that need to baffle their rivals. And then we have news of PlutoTV selling for a mouth watering $340 million dollars in money to Viacom (deal was announced on January 22, 2019), showing that the AVOD service model can be viable and rather important.
5G is going to conserve us all?
This is where I wish to get in touch with the massive financial investments being made in 5G and offer my perspective on why 5G might well break some video companies while at the very same time make others.
Let's take a look at AT&T.
In the last 4 years AT&T has included 80 billion dollars of additional financial obligation leaving it with more than 160 billion dollars of brief and long term debt. Now, 50 billion of this incredible number was the outcome of the 2015 purchase of DirecTV.
My point is not to break down the AT&T financial obligation numbers, I'm not an analyst, however rather offer a point of view that the monetary circumstance for AT&T going into its enormous 5G investment cycle, while at the very same time making understood their tactical effort to develop up their video service capacity through Warner Media direct to consumer offerings like HBO, and DirecTV, is going to be challenged, unless they do something really different with video.
So what can a service supplier like AT&T do to attend to the economic squeeze, and the general headwinds to the video organisation? Such as decreasing pay TELEVISION subs, and fragmenting OTT service offerings. This is the question on many minds who are examining the future of the video organisation.
It is my strong belief that common high speed mobile networks powered by 5G will release a video tsunami of traffic on the network like we've never ever seen prior to.
This will be great news for the PlutoTV's of the world and other ingenious video services like Quibi who will have the ability to reach more customers with a much better quality experience as an outcome of having the ability to take advantage of a faster network thanks to 5G.
It's bad news for network operators without a strategy to monetize this extra traffic load, and of course incumbents who are hoping to get by with incremental enhancements to their services; such as changing from managed to unmanaged, or OTT distribution, while continuing to use aging video standards like H. 264 to provide low resolution mobile profiles.
Video suppliers who continue to under serve their consumers will rapidly be at a drawback, and ripe for disturbance, I believe, from new organisation models such as AVOD and the latest and most efficient video technologies.
The four character video innovation that might conserve the video company.
The 4 character video requirement that I think will play a key role in the success of the video service is HEVC, the video codec that is now deployed on two billion gadgets. The following slide discussion offers numbers regarding HEVC gadget penetration which deserve seeing.
There has actually been much written about HEVC royalty concerns, something that activated development of an alternative codec which probably is royalty complimentary. However, while some in the industry ended up being preoccupied with questions around licensing and royalties, major advancements have been made on the legal front, consisting of almost every CE gadget producer consisting of HEVC playback support.
For instance, HEVC Advance waived all royalties for digital distribution of material. This suggests, HEVC encoded content that is streamed will only bring a royalty for the hardware decoder and this is already covered by the getting device. Supplied that you are delivering bits over the wire and not by means of a physical mechanism such as Blu-ray Disc, your business will not have to pay any extra royalties, at least not to HEVC Advance.
Now, if it's any convenience, the companies who have actually already done their due diligence on the royalty concern, and are streaming HEVC content to customers today, include: Amazon, Comcast, DirecTV, Meal Network, Netflix, Learn more Sky, Sony, Vudu, Vodafone, and Orange, just among others.
What about HEVC playback support?
This is an excellent and important question and maybe the area of development around the HEVC environment that is least known or comprehended.
Starting with in-home playback, if your users have actually purchased a TELEVISION, video game console, Roku box or Apple TV in the last 3 years, you can be almost ensured that support for HEVC is present with no need for extra licensing or gamer upgrade.
HEVC is now resident in nearly every SoC that goes in to any mid to high-end CE video device. That's 400 million devices that support HEVC natively.
The information business ScientiaMobile keeps the largest dataset of network gadget gain access to profiles by receiving information from the biggest wireless operators in the world. This company reports that a tremendous 78% of all iOS mobile phone demands come from gadgets that support hardware-accelerated HEVC decoding. And though iOS gadgets are predominant in the majority of industrialized markets, Android is still an exceptionally essential device profile, and here the ScientiaMobile data is very encouraging with 57% of Android mobile phone requests originating from devices that support HEVC decoding.
These two numbers are where the picture of HEVC as the most sensible video standard to follow H. 264, begins to take shape. Here we have major video suppliers and tech business currently encoding and dispersing content in HEVC. And offered the HEVC gadget penetration and hardware support any stress over an early transfer to HEVC are not required. But, what other factors validate the idea that HEVC will be a booster to the video business?
LiveU just recently released a report called 'State of Live' that revealed growing patterns in HEVC broadcasting, specifically worldwide of sports. And just in case you have ideas that using HEVC is a passing pattern on the method to some alternative codec, consider that in 2018, 25% of all LiveU generated traffic was streamed using the HEVC video requirement while the only other codec used was H. 264.
The report stated that the high HEVC use was a direct reflection on the increasing demand for professional-grade video quality, a pattern that was clearly evident at the 2018 FIFA World Cup in Russia.
So what does this mean for the industry?
The trends we simply took a look at reveal that we have an ever more requiring customer who desires content that displays the complete capabilities of their viewing device, which suggests higher resolutions and advanced video standards like HDR. But, this exact same user is now taking in more content, which contributes to further crowding the network.
This customer consumption pattern is hitting a shift from managed services to unmanaged, or OTT distribution and creating technical stress inside incumbent service operators who are dealing with technical shifts and service design fracturing. Incredibly, in spite of a very clear hazard to the incumbent services who are seeing video subscriber loses installing into the numerous thousands over just a couple of short quarters, some are continuing with the status quo even while new entrants are releasing services that provide the customer more for less.
This is where completion of the story will be written for some as the very best of times, and for others as the worst of times.
HEVC is more than a technology enabler. It's a video standard that is set to interfere with many of the standard operators and early OTT streaming services. Not because the customer knows the distinction between H. 264, VP9, or even HEVC, but because the customer is becoming aware that better quality is possible, and as they do, they will move to the service who provides the best quality cost effectively.
At Beamr, our company believe that the proof of our item and innovation excellence need to be knowledgeable and not just talked about. Which is why we've put together the best offer that we have seen in the market where you can utilize our codecs in mix with our VOD transcoder, 100% free of charge.
HEVC is now resident in almost every SoC that goes in to any mid to high-end CE video gadget. These 2 numbers are where the photo of HEVC as the most logical video requirement to follow H. 264, begins to take shape. Here we have major video suppliers and tech business currently encoding and distributing material in HEVC. And given the HEVC gadget penetration and hardware support any worries about a premature move to HEVC are not required. What other elements verify the concept that HEVC will be a booster to the video service?
You can experiment with Beamr's software video encoders today and get up to 100 hours of free HEVC and H. 264 video transcoding each month. CLICK HERE
Author: Mark Donnigan