The Best of Times & Worst of Times in the Video Business Mark Donnigan Vice President Marketing at Beamr
Read 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 & Bad Times in Video Services Mark Donnigan Vice President Marketing at Beamr
Can a four character innovation conserve us?
This is a fascinating question since there is a paradox emerging in the video business where it feels like the the very best of times for numerous, however the worst of times for some.
Here we have Disney announcing that they have already accrued one billion dollars in loses, and this even before releasing their direct to consumer business. And after that we have Verizon Media announcing sweeping layoffs which represent an exit from a few of the core entertainment service and technology services that were operating under the Oath umbrella.
And obviously there isn't a reporting interval that passes where the cord cutting numbers have not grown, which puts increasing pressure on the video side of the company company.
Yet, Netflix stock is on the increase once again, permitting the company to purchase material at levels that should baffle their competitors. And after that we have news of PlutoTV selling for a mouth watering $340 million dollars in money to Viacom (offer was announced on January 22, 2019), showing that the AVOD business design can be practical and rather important.
5G is going to save us all?
This is where I want to get in touch with the huge financial investments being made in 5G and supply my perspective on why 5G might well break some video companies while at the 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 brief 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, however rather offer a point of view that the monetary circumstance for AT&T entering into its huge 5G investment cycle, while at the very same time making known their strategic 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 really various with video.
So what can a service provider like AT&T do to attend to the economic capture, and the total headwinds to the video business? Such as decreasing pay TELEVISION subs, and fragmenting OTT service offerings. This is the question on lots of minds who are examining 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 ever seen before.
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 a result of having the ability to leverage 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 circulation, while continuing to utilize aging video standards like H. 264 to provide low resolution mobile profiles.
Video distributors who continue to under serve their clients will rapidly be at a downside, and ripe for disturbance, I think, from new company models such as AVOD and the most recent and most effective video technologies.
The four character video technology that may save the video business.
The four character video standard that I think will play a key role in the success of the video service is HEVC, the video codec that is now released on 2 billion gadgets. The following slide discussion supplies numbers relating to HEVC gadget penetration which are worth seeing.
There has been much discussed HEVC royalty issues, something that activated advancement of an alternative codec which most likely is royalty totally free. However, while some in the market ended up being preoccupied with concerns around licensing and royalties, major advancements have actually been made on the legal front, consisting of almost every CE device maker consisting of HEVC playback support.
For example, HEVC Advance waived all royalties for digital circulation of material. This implies, HEVC encoded material that is streamed will only bring a royalty for the hardware decoder and this is already covered by the receiving gadget. Provided that you are delivering bits over the wire and not via a physical mechanism such as Blu-ray Disc, your company will not need to pay any extra royalties, at least not to HEVC Advance.
Now, if it's any convenience, the business who have currently done their due diligence on the royalty concern, and are streaming HEVC material to consumers today, consist of: Amazon, Comcast, DirecTV, Meal Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, simply to name a few.
What about HEVC playback support?
This is a great and crucial question and maybe the area of development around the HEVC community that is least recognized or comprehended.
Starting with in-home playback, if your users have purchased a TV, game console, Roku box or Apple TELEVISION in the last 3 years, you can be almost ensured that assistance for HEVC is present without any need for extra licensing or gamer upgrade.
HEVC is now resident in nearly every SoC that goes in to any mid to high-end CE video gadget. That's 400 million gadgets that support HEVC natively.
The data company ScientiaMobile maintains the biggest dataset of network gadget access profiles by getting information from the largest wireless operators in the world. This company reports that a tremendous 78% of all iOS smart device demands come from devices that support hardware-accelerated HEVC decoding. And though iOS devices are predominant in many industrialized markets, Android is still an extremely important gadget profile, and here the ScientiaMobile data is very encouraging with 57% of Android smartphone requests coming from devices that support HEVC decoding.
These 2 numbers are where the photo of HEVC as the most logical video requirement to follow H. 264, begins to take shape. Here we have major video suppliers and tech companies currently encoding and distributing material in HEVC. And provided the HEVC gadget penetration and hardware support any stress over a premature move to HEVC are not warranted. What other elements validate the idea that HEVC will be a booster to the video organisation?
LiveU recently published a report called 'State of Live' that showed growing patterns in HEVC broadcasting, especially on the planet of sports. And just in case you have ideas that the usage of HEVC is a passing trend on the way 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 utilized was H. 264.
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.
What does this mean for the market?
The patterns we simply took a look at expose that we have an ever more requiring consumer who wants content that flaunts the complete abilities of their seeing gadget, which implies higher resolutions and advanced video requirements like HDR. But, this same user is now consuming more content, which adds to further crowding the network.
This customer usage pattern is colliding with a shift from handled services to unmanaged, or OTT distribution and creating technical stress inside incumbent service operators who are facing technical shifts and organisation model fracturing. Exceptionally, in spite Mark Donnigan of a very clear risk to the incumbent services who are seeing video customer loses mounting into the numerous thousands over just a few short quarters, some are continuing with the status quo even while brand-new entrants are launching services that provide the customer more for less.
This is where the end of the story will be composed for some as the 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 disrupt a lot of the traditional operators and early OTT streaming services. Not since the customer understands the distinction in between H. 264, VP9, or even HEVC, but since the customer is ending up being mindful that better quality is possible, and as they do, they will migrate to the service who delivers the very best quality economically.
At Beamr, our company believe that the proof of our product and technology excellence should be knowledgeable and not simply discussed. Which is why we have actually created the very best deal that we have actually seen in the market where you can utilize our codecs in mix with our VOD transcoder, 100% free of charge.
HEVC is now resident in practically every SoC that goes in to any mid to high-end CE video gadget. These two numbers are where the photo of HEVC as the most rational video standard to follow H. 264, begins to take shape. Here we have major video suppliers and tech business already encoding and distributing material in HEVC. And offered the HEVC device penetration and hardware support any concerns about an early move to HEVC are not required. What other factors confirm the concept that HEVC will be a booster to the video business?
You can experiment with Beamr's software application video encoders today and get up to 100 hours of totally free HEVC and H. 264 video transcoding monthly. CLICK HERE
Written by: Mark Donnigan