The Best of Times & Worst of Times in the Video Business Mark Donnigan Marketing Head at Beamr
Read the original LinkedIn article here: The Best of Times & Worst of Times in the Video Business
Mark Donnigan is VP Marketing for Beamr, a high-performance video encoding technology company.
The Video Business is in the Best of Times or the Worst of Times? Mark Donnigan Marketing Leader at Beamr
Can a 4 character technology conserve us?
This is an intriguing question since there is a paradox emerging in the video organisation where it feels like the the finest of times for lots of, however the worst of times for some.
Here we have Disney announcing that they have already accrued one billion dollars in loses, and this even prior to releasing their direct to customer organisation. And after that we have Verizon Media revealing sweeping layoffs which represent an exit from some of the core entertainment service and technology services that were operating 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 provider service.
Netflix stock is on the increase again, enabling the business to invest in content at levels that should mystify their rivals. And then we have news of PlutoTV selling for a mouth watering $340 million dollars in cash to Viacom (offer was revealed on January 22, 2019), showing that the AVOD organisation model can be practical and quite valuable.
5G is going to save us all, right?
This is where I desire to get in touch with the massive investments being made in 5G and provide my point of view 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 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 offer a perspective that the monetary scenario for AT&T entering into its massive 5G financial investment cycle, while at the very same time making known their strategic effort to develop their video service capacity through Warner Media direct to consumer offerings like HBO, and DirecTV, is going to be challenged, unless they do something extremely various with video.
So what can a service company like AT&T do to deal with the financial capture, and the overall headwinds to the video service? 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 common high speed mobile networks powered by 5G will let loose a video tsunami of traffic on the network like we have actually never ever 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 better quality experience as a result 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 wanting to manage with incremental improvements to their services; such as switching from managed to unmanaged, or OTT distribution, while continuing to utilize aging video standards like H. 264 to provide low resolution mobile profiles.
Video suppliers who continue to under serve their clients will rapidly be at a disadvantage, and ripe for disruption, I believe, from new service designs such as AVOD and the most recent and most efficient video technologies.
The 4 character video innovation that may save the video business.
The 4 character video requirement that I believe will play a key role in the success of the video company is HEVC, the video codec that is now deployed on two billion gadgets. The following slide discussion supplies numbers relating to HEVC device penetration which are worth seeing.
There has been much composed about HEVC royalty issues, something that set off development of an alternative codec which presumably is royalty complimentary. 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 nearly every CE gadget producer including HEVC playback assistance.
HEVC Advance waived all royalties for digital distribution of material. This implies, HEVC encoded material that is streamed will only bring a royalty for the hardware decoder and this is already covered by the getting device. Provided that you are providing bits over the wire and not via 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 concern, 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 maybe the area of advancement around the HEVC ecosystem that is least known or comprehended.
Starting with in-home playback, if your users have actually purchased a TV, video game console, Roku box or Apple TV in the last 3 years, you can be nearly ensured that support for HEVC is present with no requirement for additional licensing or player upgrade.
HEVC is now resident in nearly every SoC that goes in to any mid to high-end CE video device. Because 2015, market reports reveal this group of products numbers 400 million. That's 400 million devices that support HEVC natively. It's an excellent start, but what about mobile?
The information business ScientiaMobile maintains the largest dataset of network gadget gain access to profiles by getting data from the largest wireless operators on the planet. This business reports that a tremendous 78% of all iOS smart device demands come from gadgets that support hardware-accelerated HEVC decoding. And though iOS gadgets are predominant in many developed markets, Android is still an extremely important device profile, and here the ScientiaMobile data is very encouraging with 57% of Android smartphone requests coming from devices that support HEVC decoding.
These two numbers are where the picture of HEVC as the most logical video standard to follow H. 264, begins to take shape. Here we have major video suppliers and tech business already encoding and distributing material in HEVC. And provided the HEVC device penetration and hardware support any concerns about an early transfer to HEVC are not warranted. However, what other elements verify the concept that HEVC will be a booster to the video company?
LiveU recently published a report called 'State of Live' that showed growing trends in HEVC broadcasting, especially worldwide of sports. And just in case you have thoughts that making use of HEVC is a passing pattern on the way to some alternative codec, consider that in 2018, 25% of all LiveU created traffic was streamed using the HEVC video standard while the only other codec utilized was H. 264.
In truth, the report mentioned that the high HEVC usage 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.
What does this mean for the market?
The patterns we simply analyzed reveal that we have an ever more requiring consumer who desires material that displays the complete abilities of their seeing gadget, which indicates greater resolutions and more innovative video requirements like HDR. But, this very same user is now taking in more content, which adds to further crowding the network.
This consumer usage pattern is hitting a shift from managed services to unmanaged, or OTT distribution and producing technical stress inside incumbent service operators who are dealing with technical shifts and service design fracturing. Surprisingly, in spite of an extremely clear risk to the incumbent services who are seeing video customer loses installing into the hundreds of thousands over just a few short quarters, some are continuing with the status quo even while new entrants are releasing services that offer the consumer more for less.
This is where completion of the story will be composed 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 interfere with many of the standard operators and early OTT streaming services. Not due to the fact that the consumer knows the distinction in between H. 264, VP9, or perhaps HEVC, however because the consumer is realising that better quality is possible, and as they do, they will migrate to the service who provides the finest quality economically.
At Beamr, our company believe that the evidence of our product and technology quality need to be experienced and not simply spoken about. Which is why we have actually created the very best offer that we have seen in the industry where you can utilize our codecs in mix 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 device. These two numbers are where the picture of HEVC as the most logical video requirement to follow H. 264, starts to take shape. Here we have major video distributors and tech companies already encoding and distributing material in HEVC. And given the HEVC device penetration and hardware support any worries about an early relocation to HEVC are not called for. What other elements confirm the concept that HEVC will be a booster to the video business?
You can try Beamr's software application video click for more info encoders today and get up to 100 hours of free HEVC and H. 264 video transcoding monthly. CLICK HERE
Published by: Mark Donnigan