The Video Business is in the Best of Times or the Worst of Times? Mark Donnigan Marketing Head 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 technology company.
Are we in the good times or the worst of times in the video business? Mark Donnigan Vice President Marketing at Beamr
Can a four character technology conserve us?
This is an interesting concern since there is a paradox emerging in the video business where it feels like the the very best of times for many, however the worst of times for some.
Here we have Disney revealing that they have actually currently accrued one billion dollars in loses, and this even before releasing their direct to customer organisation. And after that we have Verizon Media announcing sweeping layoffs which represent an exit from some of the core entertainment service and innovation companies that were operating 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 provider company.
Netflix stock is on the rise again, permitting the business to invest in content at levels that must mystify their competitors. And after that we have news of PlutoTV selling for a mouth watering $340 million dollars in money to Viacom (deal was announced on January 22, 2019), showing that the AVOD organisation model can be practical and rather valuable.
5G is going to conserve us all, right?
This is where I wish to get in touch with the huge 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 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 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 expert, however rather offer a point of view that the monetary circumstance 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 really different with video.
What can a service company like AT&T do to resolve the economic squeeze, and the total headwinds to the video company? Such as declining pay TV subs, and fragmenting OTT service offerings. This is the question on many minds who are evaluating the future of the video company.
It is my strong belief that common high speed mobile networks powered by 5G will release a video tsunami of traffic on the network like we have actually never ever seen prior to.
This will be good 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 being able to take advantage of a much faster 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 wanting to get by with incremental enhancements to their services; such as changing from handled to unmanaged, or OTT distribution, while continuing to utilize aging video requirements like H. 264 to deliver low resolution mobile profiles.
Video distributors who continue to under serve their customers will rapidly be at a downside, and ripe for interruption, I think, from brand-new business models such as AVOD and the most recent and most effective video innovations.
The four character video innovation that might save the video service.
The 4 character video standard that I believe will play a key role in the success of the video organisation is HEVC, the video codec that is now released on 2 billion gadgets. The following slide presentation provides numbers relating to HEVC gadget penetration which are worth seeing.
There has actually been much discussed HEVC royalty concerns, something that set off development of an alternative codec which most likely is royalty totally free. Nevertheless, 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 manufacturer including HEVC playback assistance.
HEVC Advance waived all royalties for digital circulation of content. This indicates, HEVC encoded material that is streamed will just carry a royalty for the hardware decoder and this is currently covered by the getting gadget. Offered that you are providing bits over the wire and not through a physical system such as Blu-ray Disc, your company will not need to pay any additional royalties, a minimum of not to HEVC Advance.
Now, if it's any comfort, the business who have currently done their due diligence on the royalty question, and are streaming HEVC content to customers today, include: Amazon, Comcast, DirecTV, Meal Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, just among others.
What about HEVC playback support?
This is a great and crucial question and possibly the location of development around the HEVC environment that is least known or comprehended.
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 nearly guaranteed that assistance for HEVC exists without any need for extra licensing or gamer upgrade.
HEVC is now resident in practically every SoC that goes in to any mid to high-end CE video device. That's 400 million gadgets that support HEVC natively.
The data business ScientiaMobile preserves the largest dataset of network device access profiles by getting data from the biggest cordless operators on the planet. This company reports that a whopping 78% of all iOS smartphone requests originate from devices that support hardware-accelerated HEVC decoding. And though iOS gadgets are predominant in most developed markets, Android is still a very crucial gadget profile, and here the ScientiaMobile information is very motivating with 57% of Android mobile phone demands originating from gadgets that support HEVC decoding.
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 distributors and tech business already encoding and dispersing content in HEVC. And offered the HEVC gadget penetration and hardware support any stress over a premature relocate to HEVC are not required. What other elements validate the concept that HEVC will be a booster to the video company?
LiveU recently released a report called 'State of Live' that showed growing patterns in HEVC broadcasting, particularly on the planet of sports. And just in case you have ideas that the use of HEVC is a passing pattern en route to some alternative codec, consider that in 2018, 25% of all LiveU generated 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 obvious at the 2018 FIFA World Cup in Russia.
What does this mean for the market?
The patterns we just examined reveal that we have an ever more requiring consumer who desires material that flaunts the complete abilities of their viewing device, which means greater resolutions and advanced video requirements like HDR. But, this same user is now consuming more material, which contributes to further congesting the network.
This consumer intake pattern is hitting a shift from managed services to unmanaged, or OTT circulation and producing technical stress inside incumbent service operators who are dealing with technical shifts and organisation model fracturing. Incredibly, in spite of an extremely clear hazard to the incumbent services who are seeing video subscriber loses mounting into the numerous thousands over simply a few brief quarters, some are continuing with the status quo even while new entrants are releasing services that offer the customer more for less.
This is where completion of the story will be written for some as the 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 interfere with a lot of the traditional operators and early OTT streaming services. Not due to the fact that the consumer understands the distinction between H. 264, VP9, or even HEVC, but because the customer is becoming mindful that better quality is possible, and as they do, they will migrate to the service who provides the very best quality affordably.
At Beamr, our company believe that the proof of our item and technology quality must be knowledgeable and not just spoken about. Which is why we've created the very best offer that we have actually seen in the industry where you can utilize our codecs in mix with our VOD transcoder, 100% totally free.
HEVC is now resident in nearly every SoC that goes in to any mid to high-end CE video device. These 2 numbers are where the image of HEVC as the most logical video standard to follow H. 264, starts to take shape. Here we have significant video distributors and tech business already encoding and distributing content in HEVC. And provided the HEVC gadget penetration and hardware support any worries about an early relocation to HEVC are not warranted. What other elements confirm the idea Learn more that HEVC will be a booster to the video business?
You can experiment with Beamr's software video encoders today and get up to 100 hours of complimentary HEVC and H. 264 video transcoding each month. CLICK ON THIS LINK
Published by: Mark Donnigan