The Video Business is in the Greatest of Times or the Hardest of Times? Mark Donnigan Marketing Leader 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 at Beamr, a high-performance video encoding innovation company.
Best & Worst of Times in Video Mark Donnigan Marketing Head at Beamr
Can a 4 character innovation conserve us?
This is a fascinating concern since there is a paradox emerging in the video organisation where it seems like the the finest of times for many, but 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 introducing their direct to customer company. And then we have Verizon Media revealing sweeping layoffs which represent an exit from some of the core entertainment service and innovation businesses that were running under the Oath umbrella.
And naturally there isn't a reporting period that passes where the cable cutting numbers haven't grown, which puts increasing pressure on the video side of the service company company.
Yet, Netflix stock is on the increase again, permitting the company to purchase content at levels that need to baffle their rivals. And after that 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 business design can be viable and rather valuable.
5G is going to conserve us all?
This is where I desire to connect with the massive investments being made in 5G and supply my point of view 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.
So in the last four years AT&T has actually added 80 billion dollars of extra financial obligation leaving it with more than 160 billion dollars of short and long term financial obligation. Now, 50 billion of this incredible 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, but rather provide a point of view that the monetary scenario for AT&T going into its huge 5G investment cycle, while at the same time making known their strategic 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 extremely various with video.
What can a service company like AT&T do to resolve the economic squeeze, and the general headwinds to the video company? Such as declining pay TV subs, and fragmenting OTT service offerings. This is the concern on numerous minds who are analyzing the future of the video service.
It is my strong belief that ubiquitous high speed mobile networks powered by 5G will unleash a video tsunami of traffic on the network like we have actually never ever seen before.
This will be good news for the PlutoTV's of the world and other ingenious 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 take advantage of a faster network thanks to 5G.
It's bad news for network operators without a plan to monetize this extra traffic load, and of course incumbents who are hoping to get by with incremental improvements to their services; such as changing from handled to unmanaged, or OTT circulation, while continuing to use aging video requirements like H. 264 to deliver low resolution mobile profiles.
Video distributors who continue to under serve their consumers will rapidly be at a disadvantage, and ripe for interruption, I believe, from new organisation designs such as AVOD and the latest and most effective video innovations.
The 4 character video innovation that might save the video company.
The 4 character video standard that I believe will play a key function in the success of the video business is HEVC, the video codec that is now deployed on two billion devices. The following slide discussion offers numbers regarding HEVC device penetration which are worth seeing.
There has been much written about HEVC royalty issues, something that activated advancement of an alternative codec which presumably is royalty free. Nevertheless, while some in the market ended up being preoccupied with questions around licensing and royalties, significant advancements have actually been made on the legal front, consisting of almost every CE device maker including HEVC playback support.
HEVC Advance waived all royalties for digital circulation 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. Provided that you are delivering bits over the wire and not by means of a physical mechanism such as Blu-ray Disc, your company will not have to pay any extra royalties, a minimum of not to HEVC Advance.
Now, if it's any comfort, the companies who have actually already 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, simply to name a few.
What about HEVC playback support?
This is a great and crucial question and possibly the area of advancement around the HEVC environment that is least recognized or comprehended.
Starting with in-home playback, if your users have acquired a TV, game console, Roku box or Apple TV in the last 3 years, you can be almost guaranteed that assistance for HEVC is present without any need for extra licensing or gamer upgrade.
HEVC is now resident in nearly every SoC that goes in to any mid to high-end CE video device. That's 400 million devices that support HEVC natively.
The data company ScientiaMobile keeps the biggest dataset of network device gain access to profiles by receiving data from the biggest wireless operators worldwide. This company reports that a whopping 78% of all iOS smartphone demands come from gadgets that support hardware-accelerated HEVC decoding. And though iOS devices are primary in a lot of developed markets, Android is still a very crucial device profile, and here the ScientiaMobile data is really motivating with 57% of Android mobile phone demands coming from gadgets that support HEVC decoding.
These 2 numbers are where the image of HEVC as the most logical video requirement to follow H. 264, begins to take shape. Here we have major video distributors and tech business currently encoding and distributing material in HEVC. And given the HEVC device penetration and hardware support any fret about a premature transfer to HEVC are not warranted. What other factors verify the concept that HEVC will be a booster to the video organisation?
LiveU just recently released a report called 'State of Live' that revealed growing trends in HEVC broadcasting, particularly 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, think about that in 2018, 25% of all LiveU produced traffic was streamed using the HEVC video standard while the only other codec used was H. 264.
The report stated that the high HEVC use was a direct reflection on the increasing demand for professional-grade video quality, a pattern that was plainly apparent at the 2018 FIFA World Cup in Russia.
So what does this mean for the market?
The trends we simply took a look at expose that we have an ever more demanding customer who desires material that reveals off the full capabilities of their seeing device, which means higher resolutions and advanced video requirements like HDR. This very same user is now taking in more material, which contributes to further crowding the network.
This consumer intake pattern is colliding with 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 business model fracturing. Astonishingly, in spite of a really clear threat to the incumbent services who are seeing video subscriber loses installing 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 launching services that provide the customer more for less.
This is where the end of the story will be composed for some as the very 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 more information set to disrupt much of the conventional operators and early OTT streaming services. Not due to the fact that the customer knows the distinction between H. 264, VP9, and even HEVC, but since the customer is ending up being mindful that much better quality is possible, and as they do, they will move to the service who provides the finest quality economically.
At Beamr, our company believe that the proof of our item and technology excellence should be experienced and not just talked about. Which is why we have actually created the very best deal that we have seen in the industry where you can use 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 two numbers are where the picture of HEVC as the most rational video standard to follow H. 264, begins to take shape. Here we have major video suppliers and tech business already encoding and distributing content in HEVC. And given the HEVC gadget penetration and hardware support any concerns about a premature move to HEVC are not called for. What other elements verify the idea that HEVC will be a booster to the video company?
You can check out Beamr's software application video encoders today and get up to 100 hours of complimentary HEVC and H. 264 video transcoding each month. CLICK HERE
Originally published by: Mark Donnigan