The Video Business is in the Best of Times or the Worst of Times? Mark Donnigan Marketing Leader at Beamr
Get 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 innovation company.
Best & Worst of Times in Video Mark Donnigan Vice President Marketing at Beamr
Can a 4 character innovation conserve us?
This is an intriguing concern due to the fact that there is a paradox emerging in the video company where it seems like the the finest of times for lots of, but the worst of times for some.
Here we have Disney announcing that they have already accumulated one billion dollars in loses, and this even prior to introducing their direct to customer business. And then we have Verizon Media announcing sweeping layoffs which represent an exit from a few of the core home entertainment service and technology companies that were operating under the Oath umbrella.
And of course 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 company company.
Netflix stock is on the increase once again, enabling 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 cash to Viacom (offer was revealed on January 22, 2019), proving that the AVOD organisation model can be feasible and quite valuable.
5G is going to save us all?
This is where I desire to link with the massive investments being made in 5G and supply my viewpoint on why 5G may well break some video business while at the exact same time make others.
Let's look at AT&T.
In the last four years AT&T has actually added 80 billion dollars of additional debt leaving it with more than 160 billion dollars of short and long term financial obligation. Now, 50 billion of this staggering 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, however rather supply a point of view that the monetary situation for AT&T entering into its massive 5G financial investment cycle, while at the same time making known their tactical initiative to develop their video service capability through Warner Media direct to consumer offerings like HBO, and DirecTV, is going to be challenged, unless they do something extremely different with video.
So what can a service company like AT&T do to address the financial squeeze, and the general headwinds to the video company? Such as decreasing pay TV subs, and fragmenting OTT service offerings. This is the question on lots of 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 before.
This will be excellent news for the PlutoTV's of the world and other innovative video services like Quibi who will have the ability to reach more consumers with a better quality experience as a result of having the ability to take advantage of a quicker network thanks to 5G.
However, it's bad news for network operators without a strategy to monetize this additional traffic load, and obviously incumbents who are hoping to manage with incremental enhancements to their services; such as changing from handled to unmanaged, or OTT circulation, while continuing to use aging video requirements like H. 264 to provide low resolution mobile profiles.
Video distributors who continue to under serve their consumers will rapidly be at a downside, and ripe for interruption, I believe, from new business designs such as AVOD and the most recent and most efficient video innovations.
The four character video technology that might conserve the video organisation.
The 4 character video requirement that I believe will play an essential role in the success of the video company is HEVC, the video codec that is now deployed on 2 billion gadgets. The following slide discussion offers numbers relating to HEVC gadget penetration which are worth seeing.
There has been much composed about HEVC royalty issues, something that set off development of an alternative codec which presumably is royalty free. While some in the industry became preoccupied with concerns around licensing and royalties, major advancements have actually been made on the legal front, including almost every CE device maker consisting of HEVC playback support.
For instance, HEVC Advance waived all royalties for digital distribution of material. This indicates, HEVC encoded content that is streamed will just carry a royalty for the hardware decoder and this is currently covered by the receiving gadget. Provided that you are providing bits over the wire and not via a physical system such as Blu-ray Disc, your company will not need to pay any additional royalties, at least not to HEVC Advance.
Now, if it's any convenience, the business who have actually currently done their due diligence on the royalty concern, and are streaming HEVC content to customers today, consist of: Amazon, Comcast, DirecTV, Dish Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, just among others.
What about HEVC playback support?
This is an excellent and crucial question and possibly the location of development around the HEVC environment that is least known or understood.
Beginning with in-home playback, if your users have acquired a TV, game console, Roku box or Apple TELEVISION in the last 3 years, you can be almost guaranteed that assistance for HEVC exists without any need for additional licensing or player upgrade.
HEVC is now resident in almost every SoC that enters to any mid to high-end CE video device. In reality, considering that 2015, market reports show this group of products numbers 400 million. That's 400 million devices that support HEVC natively. It's an excellent start, but what about mobile?
The information business ScientiaMobile maintains the largest dataset of network device access profiles by receiving information from the biggest cordless operators worldwide. This company reports that a whopping 78% of all iOS smartphone requests come from devices that support hardware-accelerated HEVC decoding. And though iOS devices are predominant in most industrialized markets, Android is still an exceptionally important device profile, and here the ScientiaMobile data is extremely motivating with 57% of Android mobile phone requests originating from devices that support HEVC decoding.
These 2 numbers are where the photo of HEVC as the most rational video requirement to follow H. 264, begins to take shape. Here we have major video suppliers and tech companies already encoding and distributing content in HEVC. And given the HEVC device penetration and hardware support any stress over a premature relocate to HEVC are not warranted. What other elements validate the idea that HEVC will be a booster to the video service?
LiveU recently published a report called 'State of Live' that revealed growing patterns in HEVC broadcasting, particularly worldwide of sports. And just in case you have ideas that making use of HEVC is a passing pattern on the method to some alternative codec, consider that in 2018, 25% of all LiveU created traffic was streamed utilizing the HEVC video standard 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 trend that was plainly apparent at the 2018 FIFA World Cup in Russia.
What does this mean for the click for more info market?
The trends we just examined reveal that we have an ever more requiring customer who wants material that flaunts the complete capabilities of their viewing device, which indicates greater resolutions and more sophisticated video standards like HDR. This same user is now consuming more material, which contributes to further congesting the network.
This customer consumption pattern is hitting a shift from handled services to unmanaged, or OTT distribution and producing technical stress inside incumbent service operators who are facing technical shifts and business design fracturing. Astonishingly, in spite of an extremely clear risk to the incumbent services who are seeing video customer loses installing into the numerous 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 requirement that is set to disrupt many of the conventional operators and early OTT streaming services. Not since the customer knows the difference between H. 264, VP9, or perhaps HEVC, but because the consumer is becoming aware that better quality is possible, and as they do, they will move to the service who provides the finest quality cost effectively.
At Beamr, we believe that the proof of our product and technology excellence must be experienced and not simply spoken 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 mix with our VOD transcoder, 100% for complimentary.
HEVC is now resident in nearly every SoC that goes in to any mid to high-end CE video gadget. These 2 numbers are where the image of HEVC as the most sensible video standard to follow H. 264, starts to take shape. Here we have significant video distributors and tech companies already encoding and distributing content in HEVC. And offered the HEVC device penetration and hardware support any worries about a premature move to HEVC are not warranted. What other factors confirm the concept that HEVC will be a booster to the video organisation?
You can try Beamr's software video encoders today and get up to 100 hours of free HEVC and H. 264 video transcoding every month. CLICK ON THIS LINK
Written by: Mark Donnigan