Are we in the good times or the bad times in video? 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 VP Marketing for Beamr, a high-performance video encoding technology company.
Best & Worst of Times in Video Mark Donnigan Marketing Leader at Beamr
Can a 4 character innovation save us?
This is an intriguing question due to the fact that there is a paradox emerging in the video service where it feels like the the very best of times for lots of, however the worst of times for some.
Here we have Disney announcing that they have actually already accrued one billion dollars in loses, and this even prior to launching their direct to customer organisation. And after that we have Verizon Media announcing sweeping layoffs which represent an exit from some of the core entertainment service and innovation businesses that were operating under the Oath umbrella.
And naturally 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 service company business.
Yet, Netflix stock is on the increase once again, allowing the company to purchase material at levels that need to bewilder their competitors. And then we have news of PlutoTV selling for a mouth watering $340 million dollars in cash to Viacom (deal was announced on January 22, 2019), showing that the AVOD business model can be viable and quite important.
5G is going to save us all, right?
This is where I wish to link with the huge financial investments being made in 5G and offer my perspective on why 5G may well break some video business while at the same time make others.
Let's look at AT&T.
In the last 4 years AT&T has added 80 billion dollars of additional financial obligation leaving it with more than 160 billion dollars of brief and long term financial obligation. Now, 50 billion of this staggering number was the result of the 2015 purchase of DirecTV.
My point is not to break down the AT&T financial obligation numbers, I'm not an analyst, but rather offer a viewpoint that the financial circumstance for AT&T entering into its huge 5G financial investment cycle, while at the very same time making known their tactical effort to develop their video service capability through Warner Media direct to customer offerings like HBO, and DirecTV, is going to be challenged, unless they do something very various with video.
So what can a service provider like AT&T do to address the economic capture, and the overall headwinds to the video company? Such as declining pay TV subs, and fragmenting OTT service offerings. This is the concern on many minds who are examining the future of the video business.
It is my strong belief that ubiquitous high speed mobile networks powered by 5G will let loose a video tsunami of traffic on the network like we've never ever seen before.
This will be good news for the PlutoTV's of the world and other ingenious video services like Quibi who will be able to reach more customers with a much better quality experience as a result of being able to leverage a quicker network thanks to 5G.
It's bad news for network operators without a plan 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 utilize aging video requirements like H. 264 to provide low resolution mobile profiles.
Video distributors who continue to under serve their clients will rapidly be at a disadvantage, and ripe for interruption, I think, from new organisation models such as AVOD and the newest and most efficient video innovations.
The four character video technology that may conserve the video organisation.
The four character video requirement that I believe will play an essential function in the success of the video service is HEVC, the video codec that is now released on 2 billion gadgets. The following slide presentation supplies numbers concerning HEVC gadget penetration which deserve seeing.
There has been much discussed HEVC royalty issues, something that activated development of an alternative codec which probably is royalty totally free. Nevertheless, while some in the market ended up being preoccupied with questions around licensing and royalties, major developments have been made on the legal front, consisting of nearly every CE device producer including HEVC playback support.
For example, HEVC Advance waived all royalties for digital circulation of material. This indicates, HEVC encoded content that is streamed will only carry a royalty for the hardware decoder and this is already covered by the receiving device. Provided that you are providing bits over the wire and not via a physical system such as Blu-ray Disc, your company will not have to pay any additional royalties, at least not to HEVC Advance.
Now, if it's any convenience, the companies who have actually currently done their due diligence on the royalty question, and are streaming HEVC material to customers today, consist of: Amazon, Comcast, DirecTV, Dish Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, simply among others.
What about HEVC playback support?
This is a very excellent and crucial question and maybe the area of development around the HEVC ecosystem that is least known or understood.
Beginning with at home playback, if your users have purchased a TV, video game console, Roku box or Apple TELEVISION in the last 3 years, you can be almost guaranteed that support for HEVC exists with no requirement for additional licensing or gamer upgrade.
HEVC is now resident in practically every SoC that enters to any mid to high-end CE video gadget. Given that 2015, industry reports show this group of items numbers 400 million. That's 400 million gadgets that support HEVC natively. It's a fantastic start, however what about mobile?
The data company ScientiaMobile preserves the biggest dataset of network device gain access to profiles by getting information from the largest wireless operators on the planet. This business reports that a tremendous 78% of all iOS smart device requests come from gadgets that support hardware-accelerated HEVC decoding. And though iOS gadgets are primary in most developed markets, Android is still an incredibly essential device profile, and here the ScientiaMobile data is very encouraging with 57% of Android smart device demands coming from gadgets that support HEVC decoding.
These two numbers are where the picture of HEVC as the most logical video requirement to follow H. 264, begins to take shape. Here we have significant video suppliers and tech business currently encoding and dispersing material in HEVC. And provided the HEVC device penetration and hardware support any stress over a premature move to HEVC are not called for. What other factors validate the idea that HEVC will be a booster to the video business?
LiveU just recently published a report called 'State of Live' that revealed growing patterns in HEVC broadcasting, specifically worldwide of sports. And simply in case you have ideas that making use of HEVC is a passing trend on the way 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 utilized was H. 264.
In fact, the report specified that the high HEVC use was a direct reflection on the increasing demand for professional-grade video quality, a pattern that was plainly evident at the 2018 FIFA World Cup in Russia.
So what does this mean for the market?
The trends we just took a look at reveal that we have an ever more demanding consumer who wants content that displays the complete abilities of their seeing gadget, which indicates higher resolutions and more advanced video standards like HDR. However, this very same user is now taking in more content, which contributes to further congesting the network.
This consumer intake pattern is clashing with a shift from managed services to unmanaged, or OTT circulation and developing technical tension inside incumbent service operators who are dealing with technical shifts and service model fracturing. Exceptionally, in spite of a very clear threat to the incumbent services who are seeing video customer loses mounting into the numerous thousands over simply a few brief quarters, some are continuing with the status quo even while brand-new entrants are introducing services that provide the consumer more for less.
This is where the end of the story will be composed for some as the finest of times, and for others as the worst of times.
HEVC is more than a technology enabler. It's a video requirement that is set to interfere with a lot of the conventional operators and early OTT streaming services. Not because the consumer knows the distinction in between H. 264, VP9, or even HEVC, however due to the fact that the customer is ending up being conscious that much better quality is possible, and as they do, they will migrate to the service who delivers the best quality economically.
At Beamr, we think that the proof of our product and innovation quality need to be knowledgeable and not just spoken about. Which is why we have actually put together the best deal that we have actually seen in the industry where you can use our codecs in mix with our VOD transcoder, 100% for free.
HEVC is now resident in almost every SoC that goes in to any mid to high-end CE video device. These two numbers are where the photo of HEVC as the most logical video requirement to follow H. 264, starts to take shape. more information Here we have major video distributors and tech business already encoding and dispersing content in HEVC. And offered the HEVC device penetration and hardware support any worries about a premature relocation to HEVC are not necessitated. What other factors verify the idea that HEVC will be a booster to the video service?
You can try Beamr's software application video encoders today and get up to 100 hours of complimentary HEVC and H. 264 video transcoding each month. CLICK ON THIS LINK
Author: Mark Donnigan