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 Vice President of Marketing for Beamr, a high-performance video encoding technology company.
The Video Business is in the Best of Times or the Hardest of Times? Mark Donnigan Vice President Marketing at Beamr
Can a 4 character technology save us?
This is a fascinating concern because there is a paradox emerging in the video company where it feels like the the best of times for many, but the worst of times for some.
Here we have Disney announcing that they have actually already accrued one billion dollars in loses, and this even prior to introducing their direct to consumer business. And after that we have Verizon Media revealing sweeping layoffs which represent an exit from a few of the core entertainment service and technology businesses that were running under the Oath umbrella.
And naturally there isn't a reporting period that goes by where the cord cutting numbers have not grown, which puts increasing pressure on the video side of the service provider business.
Netflix stock is on the increase once again, enabling the company to invest in material at levels that need to baffle their competitors. And then we have news of PlutoTV selling for a mouth watering $340 million dollars in money to Viacom (offer was revealed on January 22, 2019), showing that the AVOD business design can be feasible and quite valuable.
5G is going to conserve us all?
This is where I desire to connect with the huge investments being made in 5G and offer my perspective on why 5G may well break some video business while at the exact 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 additional financial obligation leaving it with more than 160 billion dollars of short and long term financial obligation. 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, however rather provide a viewpoint that the monetary scenario for AT&T entering into its enormous 5G investment cycle, while at the same time making understood their tactical initiative to develop 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 company like AT&T do to resolve the financial squeeze, and the total headwinds to the video service? Such as declining pay TELEVISION subs, and fragmenting OTT service offerings. This is the question on lots of minds who are analyzing the future of the video organisation.
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've never seen before.
This will be great news for the PlutoTV's of the world and other innovative video services like Quibi who will have the ability to reach more customers with a better quality experience as an outcome of being able to leverage a quicker network thanks to 5G.
However, it's bad news for network operators without a plan to monetize this additional traffic load, and naturally incumbents who are wishing to manage with incremental enhancements to their services; such as switching from handled to unmanaged, or OTT circulation, while continuing to utilize aging video requirements like H. 264 to deliver low resolution mobile profiles.
Video suppliers who continue to under serve their customers will quickly be at a disadvantage, and ripe for interruption, I think, from brand-new organisation models such as AVOD and the newest and most efficient video innovations.
The four character video technology that might save the video company.
The four character video standard that I think will play a crucial role in the success of the video company is HEVC, the video codec that is now deployed on 2 billion devices. The following slide presentation offers numbers relating to HEVC gadget penetration which are worth seeing.
There has been much composed about HEVC royalty issues, something that triggered advancement of an alternative codec which most likely is royalty free. However, while some in the industry ended up being preoccupied with questions around licensing and royalties, significant developments have been made on the legal front, including almost every CE device maker including HEVC playback assistance.
HEVC Advance waived all royalties for digital circulation of content. This indicates, HEVC encoded material that is streamed will only bring a royalty for the hardware decoder and this is already covered by the receiving device. Supplied that you are providing bits over the wire and not via a physical mechanism such as Blu-ray Disc, your company will not have to pay any additional royalties, at least not to HEVC Advance.
Now, if it's any comfort, the business who have actually already 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 to name a couple of.
What about HEVC playback support?
This is an excellent and crucial question and perhaps the location of development around the HEVC community that is least recognized or understood.
Beginning with in-home playback, if your users have bought a TELEVISION, video game console, Roku box or Apple TELEVISION in the last 3 years, you can be nearly guaranteed that assistance for HEVC exists with no requirement 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 device. Since 2015, industry reports reveal 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 information business ScientiaMobile maintains the biggest dataset of network gadget gain access to profiles by receiving information from the largest wireless operators in the world. This company reports that a whopping 78% of all iOS smart device requests come from gadgets that support hardware-accelerated HEVC decoding. And though iOS devices are predominant in a lot of industrialized markets, Android is still a very important gadget profile, and here the ScientiaMobile data is really encouraging with 57% of Android smartphone requests coming from devices that support HEVC decoding.
And provided the HEVC gadget penetration and hardware support any concerns about a premature move to HEVC are not necessitated. What other elements validate the concept that HEVC will be a booster to the video organisation?
LiveU recently released a report called 'State of Live' that showed growing patterns in HEVC broadcasting, specifically on the planet of sports. And just in case you have thoughts that making use 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 using the HEVC video standard while the only other codec utilized 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 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 demanding consumer who desires content that flaunts the complete capabilities of their seeing gadget, which means higher resolutions and advanced video requirements like HDR. This exact same user is now consuming more content, which contributes to more crowding the network.
This customer consumption pattern is colliding with a shift from handled services to unmanaged, or OTT circulation and creating technical stress inside incumbent service operators who are dealing with technical shifts and business design fracturing. Exceptionally, in spite of an extremely clear danger to the incumbent services who are seeing video customer loses installing into the numerous thousands over just a couple of brief quarters, some are continuing with the status quo even while brand-new entrants are releasing 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 a technology enabler. It's a video standard that is set to interrupt much of the conventional operators and early OTT streaming services. Not since the customer knows the distinction between H. 264, VP9, and even HEVC, however since the customer is realising that better quality is possible, and as they do, they will migrate to the service who delivers the very best quality affordably.
At Beamr, our company believe that the evidence of our product and innovation excellence need to be experienced and not simply discussed. Which is why we've put together the best offer that we have actually seen in the industry 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 gadget. These 2 numbers are where the image of HEVC as the most rational video standard to follow H. 264, starts to take shape. more information Here we have significant video distributors and tech companies currently encoding and distributing content in HEVC. And offered the HEVC device penetration and hardware support any concerns about an early move to HEVC are not warranted. What other elements confirm the idea that HEVC will be a booster to the video company?
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Written by: Mark Donnigan