Are we in the best of times or the worst of times in the video business? Mark Donnigan Marketing Head at Beamr
Get the original LinkedIn article here: The Best of Times & Worst of Times in the Video Business
Mark Donnigan is VP Marketing at Beamr, a high-performance video encoding technology company.
Best & Worst of Times in Video Mark Donnigan Vice President Marketing at Beamr
Can a four character innovation conserve us?
This is a fascinating concern because there is a paradox emerging in the video business where it feels like the the finest of times for numerous, but the worst of times for some.
Here we have Disney announcing that they have actually currently accrued one billion dollars in loses, and this even prior to launching their direct to customer service. And then we have Verizon Media announcing 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 company organisation.
Yet, Netflix stock is on the rise once again, permitting the business to buy 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 (offer was revealed on January 22, 2019), showing that the AVOD service design can be practical and quite valuable.
5G is going to conserve us all?
This is where I wish to get in touch with the huge investments being made in 5G and provide my perspective on why 5G might well break some video business 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 debt leaving it with more than 160 billion dollars of short 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, but rather supply a point of view that the financial scenario for AT&T going into its massive 5G financial investment cycle, while at the exact same time making understood their strategic initiative 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 very various with video.
So what can a provider like AT&T do to deal with the financial squeeze, and the total headwinds to the video company? Such as declining pay TELEVISION subs, and fragmenting OTT service offerings. This is the question on many minds who are analyzing the future of the video company.
It is my strong belief that common 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 great news for the PlutoTV's of the world and other ingenious video services like Quibi who will be able to reach more consumers with a much better quality experience as an outcome of being able to take advantage of a faster network thanks to 5G.
However, it's bad news for network operators without a strategy to monetize this additional traffic load, and naturally incumbents who are intending to manage with incremental improvements to their services; such as switching from managed to unmanaged, or OTT circulation, while continuing to utilize aging video standards like H. 264 to provide low resolution mobile profiles.
Video distributors who continue to under serve their clients will rapidly be at a downside, and ripe for disturbance, I think, from brand-new organisation designs such as AVOD and the newest and most effective video technologies.
The 4 character video innovation that might conserve the video organisation.
The four character video standard that I believe will play a key role in the success of the video service is HEVC, the video codec that is now released on two billion devices. The following slide discussion offers numbers concerning HEVC gadget penetration which are worth seeing.
There has been much discussed HEVC royalty issues, something that set off advancement of an alternative codec which presumably is royalty totally free. However, while some in the market ended up being preoccupied with questions around licensing and royalties, significant developments have actually been Click Here to Learn More made on the legal front, including nearly every CE device producer consisting of HEVC playback assistance.
For example, HEVC Advance waived all royalties for digital distribution of content. This suggests, HEVC encoded content that is streamed will just bring 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 system such as Blu-ray Disc, your business will not need to pay any additional royalties, a minimum of not to HEVC Advance.
Now, if it's any convenience, the business 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, just to call a couple of.
What about HEVC playback support?
This is an excellent and essential concern 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 bought a TELEVISION, video game console, Roku box or Apple TV in the last 3 years, you can be almost ensured that support for HEVC is present with no requirement for additional licensing or player upgrade.
HEVC is now resident in practically every SoC that goes in to any mid to high-end CE video gadget. That's 400 million gadgets that support HEVC natively.
The information business ScientiaMobile keeps the biggest dataset of network device access profiles by receiving data from the largest cordless operators worldwide. This business reports that a whopping 78% of all iOS smart device requests come from devices that support hardware-accelerated HEVC decoding. And though iOS devices are predominant in a lot of developed markets, Android is still an extremely important device profile, and here the ScientiaMobile data is really motivating with 57% of Android mobile phone demands originating from gadgets that support HEVC decoding.
These 2 numbers are where the photo of HEVC as the most rational video requirement to follow H. 264, begins to take shape. Here we have major video distributors and tech companies already encoding and dispersing material in HEVC. And given the HEVC gadget penetration and hardware support any fret about an early transfer to HEVC are not necessitated. However, what other elements verify the idea that HEVC will be a booster to the video organisation?
LiveU recently published a report called 'State of Live' that showed growing patterns in HEVC broadcasting, particularly in the world of sports. And simply in case you have ideas that using HEVC is a passing trend en route to some alternative codec, consider that in 2018, 25% of all LiveU generated traffic was streamed utilizing the HEVC video standard while the only other codec utilized was H. 264.
In truth, the report stated that the high HEVC use was a direct reflection on the increasing demand for professional-grade video quality, a trend that was plainly evident at the 2018 FIFA World Cup in Russia.
So what does this mean for the market?
The patterns we just analyzed reveal that we have an ever more requiring consumer who desires material that shows off the complete abilities of their seeing gadget, which indicates greater resolutions and more advanced video standards like HDR. But, this exact same user is now taking in more content, which contributes to more congesting the network.
This consumer intake pattern is clashing with a shift from handled services to unmanaged, or OTT circulation and creating technical tension inside incumbent service operators who are dealing with technical shifts and organisation design fracturing. Remarkably, in spite of a really clear risk to the incumbent services who are seeing video subscriber loses mounting into the hundreds of thousands over just a few short quarters, some are continuing with the status quo even while brand-new entrants are releasing services that give the consumer more for less.
This is where completion 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 a technology enabler. It's a video requirement that is set to interfere with much of the conventional operators and early OTT streaming services. Not because the customer understands the difference in between H. 264, VP9, or perhaps HEVC, however because the customer is realising that better quality is possible, and as they do, they will move to the service who delivers the best quality cost effectively.
At Beamr, our company believe that the evidence of our item and technology excellence should be experienced and not simply discussed. Which is why we have actually put together the best offer that we have seen in the industry 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 device. These 2 numbers are where the image of HEVC as the most rational video requirement to follow H. 264, starts to take shape. Here we have major video distributors and tech companies already encoding and dispersing content in HEVC. And given the HEVC device penetration and hardware support any concerns about an early relocation to HEVC are not called for. What other elements verify the idea that HEVC will be a booster to the video business?
You can experiment with Beamr's software application video encoders today and get up to 100 hours of complimentary HEVC and H. 264 video transcoding each month. CLICK ON THIS LINK
Originally published by: Mark Donnigan