Get 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 innovation company.
The Video Business is in the Best of Times or the Worst of Times? Mark Donnigan Marketing Head at Beamr
Can a 4 character innovation conserve us?
This is an intriguing question because there is a paradox emerging in the video organisation where it seems like the the finest of times for many, but the worst of times for some.
Here we have Disney announcing that they have currently accumulated one billion dollars in loses, and this even prior to introducing their direct to customer company. And then we have Verizon Media announcing sweeping layoffs which represent an exit from some of the core home entertainment service and technology businesses that were running under the Oath umbrella.
And obviously there isn't a reporting period that goes by where the cable cutting numbers haven't grown, which puts increasing pressure on the video side of the service supplier business.
Netflix stock is on the increase once again, allowing the business to invest in content at levels that should mystify their rivals. And then we have news of PlutoTV selling for a mouth watering $340 million dollars in cash to Viacom (deal was revealed on January 22, 2019), showing that the AVOD service design can be feasible and quite important.
5G is going to conserve all of us, right?
This is where I want to link with the huge 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 look at AT&T.
So in the last four years AT&T has added 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 financial obligation numbers, I'm not an analyst, but rather supply a viewpoint that the monetary situation for AT&T entering into its massive 5G financial investment cycle, while at the same time making understood their strategic initiative to develop up 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 various with video.
What can a service provider like AT&T do to address the economic capture, and the general headwinds to the video service? Such as declining pay TV subs, and fragmenting OTT service offerings. This is the concern on numerous minds who are evaluating the future of the video organisation.
It is my strong belief that common high speed mobile networks powered by 5G will let loose a video tsunami of traffic on the network like we've never seen prior to.
This will be excellent 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 a result of having the ability to take advantage of a much 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 improvements to their services; such as switching from handled to unmanaged, or OTT circulation, while continuing to utilize aging video standards like H. 264 to deliver low resolution mobile profiles.
Video suppliers who continue to under serve their clients will quickly be at a downside, and ripe for interruption, I believe, from brand-new business models such as AVOD and the latest and most effective video technologies.
The four character video innovation that may save the video company.
The four character video standard that I think will play a crucial function in the success of the video business is HEVC, the video codec that is now deployed on 2 billion gadgets. The following slide presentation provides numbers regarding HEVC gadget penetration which deserve seeing.
There has been much blogged about HEVC royalty concerns, something that activated development of an alternative codec which probably is royalty complimentary. Nevertheless, while some in the industry ended up being preoccupied with questions around licensing and royalties, significant advancements have been made on the legal front, consisting of almost every CE device manufacturer consisting of HEVC playback Get More Information support.
For instance, HEVC Advance waived all royalties for digital circulation of content. This suggests, 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 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 material to consumers today, consist of: Amazon, Comcast, DirecTV, Dish Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, just among others.
What about HEVC playback assistance?
This is a very excellent and important concern and maybe the area of advancement around the HEVC ecosystem that is least recognized or comprehended.
Starting with at 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 nearly ensured that support for HEVC exists with no need for additional licensing or gamer upgrade.
HEVC is now resident in almost every SoC that goes in to any mid to high-end CE video gadget. Since 2015, industry reports reveal this group of items numbers 400 million. That's 400 million devices that support HEVC natively. It's a terrific start, however what about mobile?
The information business ScientiaMobile maintains the biggest dataset of network device gain access to profiles by getting information from the biggest wireless operators in the world. This company reports that a massive 78% of all iOS smart device demands originate from gadgets that support hardware-accelerated HEVC decoding. And though iOS gadgets are primary in most developed markets, Android is still an exceptionally important device profile, and here the ScientiaMobile data is very encouraging with 57% of Android smartphone requests coming from devices that support HEVC decoding.
And given the HEVC gadget penetration and hardware support any concerns about an early move to HEVC are not called for. What other aspects confirm the concept that HEVC will be a booster to the video company?
LiveU recently released a report called 'State of Live' that showed growing trends in HEVC broadcasting, specifically worldwide of sports. And just in case you have thoughts that the usage of HEVC is a passing pattern en route to some alternative codec, think about that in 2018, 25% of all LiveU created traffic was streamed using the HEVC video requirement while the only other codec utilized was H. 264.
In truth, 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 analyzed reveal that we have an ever more requiring consumer who desires material that shows off the full abilities of their viewing gadget, which implies greater resolutions and advanced video requirements like HDR. This exact same user is now taking in 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 tension inside incumbent service operators who are facing technical shifts and organisation model fracturing. Incredibly, in spite of a really clear danger to the incumbent services who are seeing video customer loses mounting into the numerous thousands over simply a few 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 finest of times, and for others as the worst of times.
HEVC is more than an innovation enabler. It's a video requirement that is set to disrupt a number of the conventional operators and early OTT streaming services. Not due to the fact that the consumer knows the difference in between H. 264, VP9, or perhaps HEVC, but due to the fact that the customer is realising that better quality is possible, and as they do, they will migrate to the service who delivers the best quality affordably.
At Beamr, our company believe that the proof of our item and innovation quality need to be experienced and not just talked about. Which is why we've put together the best offer that we have seen in the industry where you can use our codecs in combination with our VOD transcoder, 100% totally free.
HEVC is now resident in practically 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 requirement to follow H. 264, starts to take shape. Here we have major video suppliers and tech business currently encoding and dispersing material in HEVC. And offered the HEVC gadget penetration and hardware support any concerns about an early relocation to HEVC are not warranted. What other aspects confirm the concept 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 totally free HEVC and H. 264 video transcoding on a monthly basis. CLICK HERE
Published by: Mark Donnigan