The Video Business is in the Best of Times or the Worst of Times? Mark Donnigan Vice President Marketing at Beamr
Read the original LinkedIn article here: The Best of Times & Worst of Times in the Video Business
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Mark Donnigan is Vice President of Marketing for Beamr, a high-performance video encoding innovation company.
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Are we in the best of times or the worst of times in video? Mark Donnigan Marketing Leader at Beamr
Can a 4 character innovation save us?
This is an intriguing question because there is a paradox emerging in the video service where it feels 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 currently accrued one billion dollars in loses, and this even before releasing their direct to customer business. And then we have Verizon Media revealing sweeping layoffs which represent an exit from a few of the core home entertainment service and technology services that were running under the Oath umbrella.
And naturally there isn't a reporting period that goes by where the cord cutting numbers haven't grown, which puts increasing pressure on the video side of the provider company.
Netflix stock is on the rise once again, enabling the business to invest in material at levels that must bewilder their rivals. And after that we have news of PlutoTV selling for a mouth watering $340 million dollars in money to Viacom (deal was revealed on January 22, 2019), proving that the AVOD service design can be viable and rather valuable.
5G is going to conserve us all?
This is where I wish to get in touch with the huge financial investments being made in 5G and offer my viewpoint on why 5G might well break some video business while at the very 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 short and long term financial obligation. Now, 50 billion of this shocking 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 expert, but rather provide a point of view that the financial circumstance for AT&T entering into its massive 5G financial investment cycle, while at the same time making understood their strategic initiative to build up their video service capacity through Warner Media direct to customer offerings like HBO, and DirecTV, is going to be challenged, unless they do something very various with video.
So what can a company like AT&T do to resolve the financial squeeze, and the overall headwinds to the video organisation? Such as decreasing pay TV subs, and fragmenting OTT service offerings. This is the question on many 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 release a video tsunami of traffic on the network like we have actually never seen prior to.
This will be excellent 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 better quality experience as an outcome of being able to utilize a quicker network thanks to 5G.
But, 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 circulation, while continuing to use aging video requirements like H. 264 to provide low resolution mobile profiles.
Video distributors who continue to under serve their consumers will rapidly be at a drawback, and ripe for disturbance, I think, from brand-new organisation designs such as AVOD and the latest and most efficient video innovations.
The four character video innovation that might conserve the video company.
The 4 character video standard that I believe will play an essential role in the success of the video business is HEVC, the video codec that is now released on two billion devices. The following slide discussion supplies numbers concerning HEVC device penetration which are worth seeing.
There has been much blogged about HEVC royalty concerns, something that activated advancement of an alternative codec which presumably is royalty complimentary. However, while some in the market became preoccupied with concerns around licensing and royalties, significant developments have actually been made on the legal front, consisting of almost every CE device maker consisting of HEVC playback support.
HEVC Advance waived all royalties for digital distribution of material. This means, HEVC encoded material that is streamed will only bring a royalty for the hardware decoder and this is currently covered by the receiving gadget. Offered 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 additional royalties, at least not to HEVC Advance.
Now, if it's any convenience, the companies 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, Dish Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, simply to call a couple of.
What about HEVC playback support?
This is an excellent and crucial question and maybe the location of advancement around the HEVC environment that is least recognized or comprehended.
Starting with at home playback, if your users have actually acquired a TELEVISION, video game console, Roku box or Apple TELEVISION in the last 3 years, you can be nearly ensured that assistance for HEVC exists with no need for extra licensing or player 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 devices that support HEVC natively.
The data company ScientiaMobile preserves the biggest dataset of network gadget access profiles by getting information from the biggest cordless operators worldwide. This business reports that a tremendous 78% of all iOS mobile phone requests come from devices that support hardware-accelerated HEVC decoding. And though iOS devices are primary in many industrialized markets, Android is still an incredibly essential device profile, and here the ScientiaMobile information is really encouraging with 57% of Android smart device demands coming from devices that support HEVC decoding.
These two 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 companies currently encoding and dispersing material in HEVC. And given the HEVC device penetration and hardware support any fret about a premature relocate to HEVC are not called for. But, what other aspects verify the idea that HEVC will be a booster to the video company?
LiveU recently released a report called 'State of Live' that showed growing trends in HEVC broadcasting, specifically in the world of sports. And simply in case you have thoughts that the use of HEVC is a passing pattern on the method to some alternative codec, consider that in 2018, 25% of all LiveU generated traffic was streamed using the HEVC video requirement while the only other codec used was H. 264.
In truth, the report mentioned that the high HEVC use was a direct reflection on the increasing need for professional-grade video quality, a trend that was clearly apparent at the 2018 FIFA World Cup in Russia.
What does this mean for the market?
The trends we simply took a look More Info at reveal that we have an ever more demanding customer who wants content that displays the complete abilities of their seeing device, which suggests greater resolutions and more sophisticated video requirements like HDR. This exact same user is now taking in more material, which contributes to more crowding the network.
This consumer consumption pattern is colliding with a shift from managed services to unmanaged, or OTT circulation and developing technical stress inside incumbent service operators who are facing technical shifts and service design fracturing. Exceptionally, in spite of a really clear danger to the incumbent services who are seeing video customer loses mounting into the hundreds of 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 consumer 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 an innovation enabler. It's a video standard that is set to interrupt a number of the conventional operators and early OTT streaming services. Not due to the fact that the consumer understands the difference between H. 264, VP9, and even HEVC, however because the consumer is realising that much 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 item and innovation excellence should be experienced and not simply discussed. Which is why we've put together the best deal that we have seen in the industry where you can use our codecs in combination 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 2 numbers are where the picture 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 offered the HEVC device penetration and hardware support any concerns about an early relocation to HEVC are not called for. What other factors confirm the idea that HEVC will be a booster to the video business?
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You can experiment with Beamr's software application 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