Are we in the best of times or the worst of times in video? 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 Vice President of 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 Vice President Marketing at Beamr
Can a four character technology conserve us?
This is a fascinating question due to the fact that there is a paradox emerging in the video business where it seems like the the very best of times for lots of, however the worst of times for some.
Here we have Disney revealing that they have actually already accrued one billion dollars in loses, and this even before launching their direct to consumer business. And then we have Verizon Media announcing sweeping layoffs which represent an exit from some of the core home entertainment service and innovation organisations that were running under the Oath umbrella.
And obviously there isn't a reporting interval that passes where the cable cutting numbers haven't grown, which puts increasing pressure on the video side of the service provider business.
Yet, Netflix stock is on the increase once again, permitting the business to buy 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 cash to Viacom (deal was announced on January 22, 2019), proving that the AVOD organisation model can be viable and quite valuable.
5G is going to conserve us all, right?
This is where I want to get in touch with the enormous investments being made in 5G and provide my point of view on why 5G may well break some video companies while at the very same time make others.
Let's look at AT&T.
So in the last four years AT&T has included 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 staggering number was the result 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 provide a perspective that the monetary situation for AT&T going into its enormous 5G financial investment cycle, while at the same time making understood their tactical initiative to construct 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 extremely various with video.
What can a service supplier like AT&T do to resolve the economic capture, and the total headwinds to the video business? Such as declining pay TELEVISION subs, and fragmenting OTT service offerings. This is the question on numerous minds who are evaluating the future of the video business.
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 be able to reach more consumers with a much better quality experience as an outcome of having the ability to leverage a 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 hoping to get by with incremental improvements to their services; such as changing from managed to unmanaged, or OTT distribution, while continuing to use aging video requirements like H. 264 to provide low resolution mobile profiles.
Video suppliers who continue to under serve their customers will quickly be at a drawback, and ripe for interruption, I believe, from new company models such as AVOD and the most recent and most efficient video technologies.
The four character video technology that might conserve the video business.
The 4 character video requirement 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 two 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 development of an alternative codec which most likely is royalty free. However, while some in the industry became preoccupied with concerns around licensing and royalties, major developments have actually been made on the legal front, consisting of nearly every CE gadget producer including HEVC playback assistance.
For example, HEVC Advance waived all royalties for digital distribution of material. This means, HEVC encoded content that is streamed will just carry a royalty for the hardware decoder and this is already covered by the receiving gadget. Supplied that you are delivering bits over the wire and not through 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 comfort, 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, Dish Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, just among others.
What about HEVC playback support?
This is an excellent and important question and possibly the area of advancement around the HEVC ecosystem that is least recognized or understood.
Starting with at home playback, if your users have acquired a TELEVISION, video game console, Roku box or Apple TV in the last 3 years, you can be almost ensured that assistance for HEVC is present with no need for additional licensing or player upgrade.
HEVC is now resident in practically every SoC that enters 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 devices that support HEVC natively. It's an excellent start, but what about mobile?
The information company ScientiaMobile preserves the largest dataset of network gadget access profiles by getting data from the largest wireless operators in the world. This business reports that a whopping 78% of all iOS mobile phone demands come from gadgets that support hardware-accelerated HEVC decoding. And though iOS gadgets are predominant in the majority of industrialized markets, Android is still an extremely important device profile, and here get more info the ScientiaMobile data is extremely motivating with 57% of Android smart device demands coming from devices that support HEVC decoding.
These two numbers are where the picture of HEVC as the most rational video requirement to follow H. 264, begins to take shape. Here we have significant video suppliers and tech companies already encoding and dispersing content in HEVC. And provided the HEVC gadget penetration and hardware support any worries about a premature relocate to HEVC are not warranted. However, what other aspects confirm the concept that HEVC will be a booster to the video organisation?
LiveU just recently published a report called 'State of Live' that revealed growing patterns in HEVC broadcasting, particularly in the world of sports. And simply in case you have ideas that making use of HEVC is a passing trend on the way to some alternative codec, think about 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 specified that the high HEVC usage was a direct reflection on the increasing need 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 industry?
The trends we simply examined reveal that we have an ever more requiring customer who desires content that displays the full abilities of their viewing gadget, which means greater resolutions and more advanced video requirements like HDR. This exact same user is now taking in more material, which contributes to additional crowding the network.
This consumer consumption pattern is hitting a shift from managed services to unmanaged, or OTT circulation and creating technical stress inside incumbent service operators who are dealing with technical shifts and company design fracturing. Astonishingly, in spite of an extremely clear hazard to the incumbent services who are seeing video subscriber loses installing into the hundreds of thousands over just a couple of brief quarters, some are continuing with the status quo even while new entrants are introducing services that offer the consumer more for less.
This is where the end 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 standard that is set to disrupt a lot of the standard operators and early OTT streaming services. Not since the customer understands the distinction between H. 264, VP9, or even HEVC, but since the customer is ending up being aware that better quality is possible, and as they do, they will migrate to the service who delivers the best quality affordably.
At Beamr, we believe that the evidence of our item and innovation quality need to be knowledgeable and not just talked about. Which is why we've assembled the 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 almost every SoC that goes in to any mid to high-end CE video device. These 2 numbers are where the photo of HEVC as the most sensible video requirement to follow H. 264, begins to take shape. Here we have major video suppliers and tech companies currently encoding and dispersing content in HEVC. And provided the HEVC device penetration and hardware support any worries about an early relocation to HEVC are not called for. What other aspects verify the idea that HEVC will be a booster to the video service?
You can experiment with Beamr's software video encoders today and get up to 100 hours of free HEVC and H. 264 video transcoding every month. CLICK HERE
Originally published by: Mark Donnigan