The Best of Times & Worst of Times in the Video Business Mark Donnigan VP Marketing at Beamr
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Mark Donnigan is Vice President of Marketing at Beamr, a high-performance video encoding technology company.
The Video Business is in the Best of Times or the Worst of Times? Mark Donnigan VP Marketing at Beamr
Can a four character technology save us?
This is an intriguing question because there is a paradox emerging in the video organisation 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 already accumulated one billion dollars in loses, and this even prior to releasing their direct to customer organisation. 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 goes by where the cable cutting numbers have not grown, which puts increasing pressure on the video side of the service supplier service.
Yet, Netflix stock is on the increase again, allowing the business to buy material at levels that must baffle their competitors. And then 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 service model can be feasible and rather valuable.
5G is going to save all of us, right?
This is where I wish to get in touch with the massive financial 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.
In the last four years AT&T has actually added 80 billion dollars of additional financial obligation leaving it with more than 160 billion dollars of brief 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 point of view that the financial circumstance for AT&T going into its huge 5G financial investment cycle, while at the exact same time making understood their strategic effort 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 really different with video.
So what can a service supplier like AT&T do to deal with the financial squeeze, and the general headwinds to the video organisation? Such as decreasing pay TV subs, and fragmenting OTT service offerings. This is the question on numerous minds who are examining the future of the video company.
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 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 customers with a much better quality experience as an outcome of being able 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 managed to unmanaged, or OTT distribution, while continuing to use aging video standards 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 disruption, I believe, from brand-new business models such as AVOD and the newest and most efficient video innovations.
The four character video technology that may save the video company.
The 4 character video standard that I believe will play an essential role in the success of the video service is HEVC, the video codec that is now released on two billion devices. The following slide presentation provides numbers concerning HEVC device penetration which deserve seeing.
There has actually been much composed about HEVC royalty issues, something that triggered advancement of an alternative codec which most likely is royalty totally free. While some in the market ended up being preoccupied with concerns around licensing and royalties, significant developments have actually been made on the legal front, consisting of nearly every CE device producer including HEVC playback assistance.
HEVC Advance waived all royalties for digital distribution of content. This indicates, HEVC encoded material that is streamed will only carry a royalty for the hardware decoder and this is already covered by the receiving device. Offered that you are more information providing bits over the wire and not through a physical system such as Blu-ray Disc, your business will not need to pay any extra royalties, a minimum of not to HEVC Advance.
Now, if it's any convenience, the business who have actually currently done their due diligence on the royalty question, and are streaming HEVC material to consumers today, consist of: Amazon, Comcast, DirecTV, Meal Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, just to name a couple of.
What about HEVC playback support?
This is a very great and essential question and perhaps the area of advancement around the HEVC environment that is least recognized or understood.
Starting with at home playback, if your users have purchased a TELEVISION, video game console, Roku box or Apple TV in the last 3 years, you can be almost guaranteed that support for HEVC is present without any requirement for additional licensing or gamer upgrade.
HEVC is now resident in almost every SoC that goes in to any mid to high-end CE video gadget. Considering that 2015, industry reports reveal this group of items numbers 400 million. That's 400 million devices that support HEVC natively. It's a great start, however what about mobile?
The data business ScientiaMobile maintains the largest dataset of network gadget gain access to profiles by receiving information from the largest cordless operators in the world. This business reports that a massive 78% of all iOS mobile phone requests originate from gadgets that support hardware-accelerated HEVC decoding. And though iOS devices are primary in most developed markets, Android is still an extremely crucial device profile, and here the ScientiaMobile information is very motivating with 57% of Android smart device demands originating from devices that support HEVC decoding.
These two numbers are where the photo of HEVC as the most sensible video requirement to follow H. 264, begins to take shape. Here we have significant video distributors and tech companies currently encoding and distributing material in HEVC. And given the HEVC gadget penetration and hardware support any fret about a premature transfer to HEVC are not necessitated. But, what other factors verify the concept that HEVC will be a booster to the video business?
LiveU just recently released a report called 'State of Live' that revealed growing trends in HEVC broadcasting, specifically on the planet of sports. And simply in case you have thoughts that using HEVC is a passing trend en route to some alternative codec, think about that in 2018, 25% of all LiveU generated traffic was streamed using 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 need for professional-grade video quality, a pattern that was plainly evident at the 2018 FIFA World Cup in Russia.
So what does this mean for the market?
The patterns we simply examined reveal that we have an ever more requiring consumer who wants material that displays the complete abilities of their viewing device, which indicates greater resolutions and advanced video requirements like HDR. However, this very same user is now taking in more material, which contributes to further crowding the network.
This customer usage pattern is hitting a shift from managed services to unmanaged, or OTT circulation and developing technical tension inside incumbent service operators who are facing technical shifts and organisation design fracturing. Remarkably, in spite of a very clear threat to the incumbent services who are seeing video customer loses mounting into the numerous thousands over just a couple of short quarters, some are continuing with the status quo even while brand-new entrants are introducing services that give the customer more for less.
This is where completion 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 interrupt a number of the standard operators and early OTT streaming services. Not because the consumer understands the distinction in between H. 264, VP9, or perhaps HEVC, but because the consumer is ending up being mindful that better quality is possible, and as they do, they will move to the service who provides the finest quality affordably.
At Beamr, we believe that the proof of our product and technology excellence should be knowledgeable and not simply spoken about. 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% totally free.
HEVC is now resident in almost 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 requirement to follow H. 264, starts to take shape. Here we have significant video suppliers and tech business already encoding and distributing material in HEVC. And provided the HEVC device penetration and hardware support any worries about an early move to HEVC are not warranted. What other elements validate the concept that HEVC will be a booster to the video company?
You can check out Beamr's software video encoders today and get up to 100 hours of free HEVC and H. 264 video transcoding on a monthly basis. CLICK HERE
Originally published by: Mark Donnigan