Are we in the best of times or the bad times in the video business? Mark Donnigan VP Marketing 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 for Beamr, a high-performance video encoding technology company.
The Video Business is in the Best of Times or the Worst of Times? Mark Donnigan Marketing Leader at Beamr
Can a 4 character innovation conserve 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 many, however the worst of times for some.
Here we have Disney revealing that they have currently accumulated one billion dollars in loses, and this even before releasing their direct to consumer service. And then we have Verizon Media announcing sweeping layoffs which represent an exit from a few of the core home entertainment service and technology services that were running under the Oath umbrella.
And of course there isn't a reporting interval that passes where the cable cutting numbers have not grown, which puts increasing pressure on the video side of the service company service.
Netflix stock is on the increase again, allowing the company to invest in content at levels that must mystify their rivals. And after that we have news of PlutoTV selling for a mouth watering $340 million dollars in money to Viacom (deal was revealed on January 22, 2019), showing that the AVOD company design can be practical and rather valuable.
5G is going to save us all, right?
This is where I desire to connect with the enormous investments being made in 5G and offer my perspective on why 5G may well break some video business while at the very same time make others.
Let's take a look at AT&T.
So in the last four years AT&T has included 80 billion dollars of extra financial obligation leaving it with more than 160 billion dollars of short 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 debt numbers, I'm not an analyst, but rather provide a perspective that the financial scenario for AT&T going into its enormous 5G financial investment cycle, while at the exact same time making known their tactical effort to develop up their video service capacity through Warner Media direct to customer offerings like HBO, and DirecTV, is going to be challenged, unless they do something extremely different with video.
What can a service supplier like AT&T do to attend to the financial capture, and the total headwinds to the video service? Such as decreasing pay TV subs, and fragmenting OTT service offerings. This is the question on numerous minds who are examining the future of the video company.
It is my strong belief that ubiquitous high speed mobile networks powered by 5G will release a video tsunami of traffic on the network like we have actually never ever seen prior to.
This will be excellent news for the PlutoTV's of the world and other innovative video services like Quibi who will be able to reach more consumers with a much better quality experience as an outcome of being able to utilize a quicker network thanks to 5G.
But, it's bad news for network operators without a plan to monetize this additional traffic load, and naturally incumbents who are intending to manage with incremental enhancements to their services; such as changing from handled to unmanaged, or OTT circulation, while continuing to utilize aging video requirements like H. 264 to provide low resolution mobile profiles.
Video suppliers who continue to under serve their consumers will rapidly be at a downside, and ripe for disturbance, I think, from new company models such as AVOD and the latest and most effective video technologies.
The four character video innovation that might save the video service.
The 4 character video requirement that I believe will play an essential function in the success of the video business is HEVC, the video codec that is now deployed on 2 billion devices. The following slide presentation provides numbers relating to HEVC device penetration which are worth seeing.
There has actually been much composed about HEVC royalty concerns, something that set off advancement of an alternative codec which most likely is royalty free. However, while some in the industry became preoccupied with questions around licensing and royalties, significant advancements have been made on the legal front, including almost every CE device manufacturer including HEVC playback support.
For instance, HEVC Advance waived all royalties for digital circulation of content. This indicates, HEVC encoded material that is streamed will only carry a royalty for the hardware decoder and this is already covered by the getting device. Supplied that you are providing bits over the wire and not through a physical system such as Blu-ray Disc, your business 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 already done their due diligence on the royalty concern, and are streaming HEVC content to customers today, include: Amazon, Comcast, DirecTV, Meal Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, simply among others.
What about HEVC playback support?
This is a great and important concern and perhaps the location of development around the HEVC community that is least recognized or comprehended.
Beginning with at home playback, if your users have acquired a TV, video game console, Roku box or Apple TV in the last 3 years, you can be nearly guaranteed that assistance for HEVC is present without any need for additional licensing or gamer upgrade.
HEVC is now resident in almost every SoC that enters to any mid to high-end CE video device. In truth, because 2015, market reports reveal this group of items numbers 400 million. That's 400 million devices that support HEVC natively. It's a terrific start, but what about mobile?
The data company ScientiaMobile maintains the biggest dataset of network gadget gain access to profiles by getting information from the largest cordless operators in the world. This company reports that a massive 78% of all iOS mobile phone demands originate from devices that support hardware-accelerated HEVC decoding. And though iOS devices are predominant in many developed markets, Android is still a very essential device profile, and here the ScientiaMobile information is really encouraging with 57% of Android smart device demands originating from gadgets that support HEVC decoding.
These two numbers are where the picture of HEVC as the most rational video standard to follow H. 264, begins to take shape. Here we have major video distributors and tech companies currently encoding and dispersing content in HEVC. And provided the HEVC device penetration and hardware support any concerns 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?
LiveU recently released a report called 'State of Live' that showed growing patterns in HEVC broadcasting, specifically on the planet of sports. And simply in case you have thoughts that using HEVC is a passing trend on the method to some alternative codec, consider that in 2018, 25% of all LiveU produced traffic was streamed utilizing the HEVC video requirement while the only other codec used was H. 264.
In fact, 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 plainly evident at the 2018 FIFA World Cup in Russia.
So Get More Info what does this mean for the market?
The patterns we just analyzed reveal that we have an ever more demanding customer who wants content that reveals off the complete abilities of their seeing gadget, which implies higher resolutions and more innovative video standards like HDR. This very same user is now consuming more content, which contributes to more congesting the network.
This consumer intake pattern is colliding with a shift from handled services to unmanaged, or OTT distribution and producing technical stress inside incumbent service operators who are dealing with technical shifts and business design fracturing. Remarkably, in spite of a really clear risk to the incumbent services who are seeing video customer loses installing into the hundreds of thousands over just a few brief quarters, some are continuing with the status quo even while brand-new entrants are launching services that offer the consumer more for less.
This is where the end 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 an innovation enabler. It's a video standard that is set to disrupt much of the standard operators and early OTT streaming services. Not since the consumer knows the difference between H. 264, VP9, or perhaps HEVC, however because the consumer is becoming conscious that better quality is possible, and as they do, they will migrate to the service who delivers the very best quality cost effectively.
At Beamr, we think that the evidence of our item and technology excellence need to be experienced and not simply spoken about. Which is why we have actually created the finest deal that we have actually seen in the industry 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 two numbers are where the image of HEVC as the most sensible video standard to follow H. 264, begins to take shape. Here we have significant video suppliers and tech business already encoding and dispersing content in HEVC. And provided the HEVC device penetration and hardware support any concerns about an early relocation to HEVC are not called for. What other aspects confirm the concept that HEVC will be a booster to the video business?
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Published by: Mark Donnigan