The Video Business is in the Best of Times or the Worst of Times? Mark Donnigan VP Marketing at Beamr
Get the original LinkedIn article here: The Best of Times & Worst of Times in the Video Business
Mark Donnigan is VP Marketing at Beamr, a high-performance video encoding innovation company.
Good Times & Worst of Times in Video Mark Donnigan Marketing Head at Beamr
Can a four character technology save us?
This is an intriguing question since there is a paradox emerging in the video service where it seems 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 accumulated one billion dollars in loses, and this even before introducing their direct to consumer organisation. And after that we have Verizon Media announcing sweeping layoffs which represent an exit from some of the core entertainment service and innovation services that were running under the Oath umbrella.
And naturally there isn't a reporting interval that goes by where the cable cutting numbers haven't grown, which puts increasing pressure on the video side of the provider company.
Netflix stock is on the rise once again, allowing the company to invest in 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 money to Viacom (deal was revealed on January 22, 2019), showing that the AVOD company design can be feasible and quite important.
5G is going to save us all?
This is where I want to connect with the massive investments being made in 5G and offer my perspective on why 5G may well break some video companies while at the exact same time make others.
Let's look at AT&T.
So in the last 4 years AT&T has actually included 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 shocking 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 expert, however rather provide a perspective that the financial situation for AT&T entering into its huge 5G investment cycle, while at the same time making understood their tactical initiative 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 really different with video.
So what can a provider like AT&T do to address the financial capture, and the total headwinds to the video organisation? Such as declining pay TV subs, and fragmenting OTT service offerings. This is the question on lots of minds who are analyzing the future of the video business.
It is my strong belief that common high speed mobile networks powered by 5G will unleash a video tsunami of traffic on the network like we've never ever seen before.
This will be great news for the PlutoTV's of the world and other ingenious video services like Quibi who will be able to reach more consumers with a better quality experience as a result of being able to take advantage of a quicker network thanks to 5G.
It's bad news for network operators without a plan to monetize this additional traffic load, and of course incumbents who are hoping to get by with incremental improvements to their services; such as switching from handled to unmanaged, or OTT distribution, while continuing to use aging video requirements like H. 264 to deliver low resolution mobile profiles.
Video distributors who continue to under serve their consumers will quickly be at a downside, and ripe for interruption, I think, from new service models such as AVOD and the most recent and most efficient video technologies.
The 4 character video technology that may conserve the video organisation.
The 4 character video requirement that I think will play a crucial function in the success of the video company is HEVC, the video codec that is now deployed on two billion devices. The following slide discussion offers numbers concerning HEVC device penetration which are worth seeing.
There has been much written about HEVC royalty issues, something that activated development of an alternative codec which most likely is royalty free. Nevertheless, while some in the industry ended up being preoccupied with questions around licensing and royalties, significant developments have been made on the legal front, consisting of nearly every CE gadget manufacturer consisting of HEVC playback assistance.
For example, HEVC Advance waived all royalties for digital circulation of content. This means, HEVC encoded material 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 via a physical mechanism such as Blu-ray Disc, your business will not have to pay any additional royalties, a minimum of not to HEVC Advance.
Now, if it's any comfort, the companies who have actually already done their due diligence on the royalty concern, and are streaming HEVC material to customers today, consist of: Amazon, Comcast, DirecTV, Meal Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, just to call a couple of.
What about HEVC playback support?
This is a great and essential concern and maybe the area of development around the HEVC environment that is least known or understood.
Beginning with at home playback, if your users have actually bought a TELEVISION, video game console, Roku box or Apple TV in the last 3 years, you can be nearly ensured that support for HEVC is present with no need for extra licensing or player upgrade.
HEVC is now resident in nearly every SoC that enters to any mid to high-end CE video gadget. Since 2015, industry reports show this group of items numbers 400 million. That's 400 million gadgets that support HEVC natively. It's a great start, but what about mobile?
The data business ScientiaMobile maintains the biggest dataset of network gadget access profiles by getting data from the largest wireless operators on the planet. This company reports that a massive 78% of all iOS mobile phone requests originate from gadgets that support hardware-accelerated HEVC decoding. And though iOS devices are predominant in a lot of industrialized markets, Android is still an extremely crucial device profile, and here the ScientiaMobile information is very encouraging with 57% of Android mobile phone demands coming from gadgets that support HEVC decoding.
These two numbers are where the image of HEVC as the most rational video requirement to follow H. 264, starts to take shape. Here we have significant video suppliers and tech business currently encoding and distributing material in HEVC. And provided the HEVC gadget penetration and hardware support any fret about a premature relocation to HEVC are not called for. What other aspects verify the idea that HEVC will be a booster to the video company?
LiveU recently published a report called 'State of Live' that showed growing trends in HEVC broadcasting, especially worldwide of sports. And simply in case you have thoughts that using HEVC is a passing trend en route to some alternative codec, consider that in 2018, 25% of all LiveU produced traffic was streamed using the HEVC video standard while the only other codec used was H. 264.
The report stated that the high HEVC use was a direct reflection on the increasing need for professional-grade video quality, a trend that was plainly apparent at the 2018 FIFA World Cup in Russia.
So what does this mean for the market?
The trends we simply analyzed reveal that we have an ever more requiring consumer who wants material that shows off the full abilities of their viewing device, which implies greater resolutions and advanced video standards like HDR. However, this very same user is now taking in more content, which contributes to more crowding the network.
This consumer consumption pattern is clashing with a shift from handled services to unmanaged, or OTT circulation and developing technical tension inside incumbent service operators who are facing technical shifts and service design fracturing. Amazingly, in spite of a really clear threat to the incumbent services who are seeing video subscriber loses mounting into the numerous thousands over simply a couple of short quarters, some are continuing with the status quo even while new entrants are releasing services that give the customer more for less.
This is where completion of the story will be composed 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 requirement that is set to interrupt much of the standard operators and early OTT streaming services. Not due to the fact that the customer understands the difference in between H. 264, VP9, and even HEVC, but since the consumer is realising that better quality is possible, and as they do, they will migrate to the service who delivers the finest quality economically.
At Beamr, our company believe that the proof of our item and innovation quality should be knowledgeable and not just talked about. Which is why we've created the finest deal that we have actually seen in the market where you can utilize our codecs in combination with our VOD transcoder, 100% free of charge.
HEVC is now resident in nearly every SoC that goes in to any mid to high-end CE video device. 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 distributors and tech companies already encoding and dispersing content in HEVC. And given the HEVC device penetration and hardware support any worries about a premature move to HEVC are not necessitated. What other elements confirm the concept that HEVC will be more info a booster to the video company?
You can check out Beamr's software application video encoders today and get up to 100 hours of free HEVC and H. 264 video transcoding each month. CLICK ON THIS LINK
Originally published by: Mark Donnigan