Best & Worst of Times in Video Mark Donnigan VP Marketing at Beamr
Read 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.
The Best of Times & Worst of Times in the Video Business Mark Donnigan VP Marketing at Beamr
Can a four character innovation conserve us?
This is an interesting question because there is a paradox emerging in the video organisation where it seems like the the very best of times for many, however the worst of times for some.
Here we have Disney revealing that they have actually currently accumulated one billion dollars in loses, and this even before introducing their direct to consumer business. And after that we have Verizon Media announcing sweeping layoffs which represent an exit from a few of the core home entertainment service and innovation businesses that were running under the Oath umbrella.
And naturally there isn't a reporting period that goes by where the cable cutting numbers have not grown, which puts increasing pressure on the video side of the service provider organisation.
Netflix stock is on the increase once again, allowing the business to invest in content at levels that must bewilder their rivals. And then 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 business design can be viable and rather valuable.
5G is going to conserve us all, right?
This is where I desire to link with the enormous financial investments being made in 5G and supply my perspective on why 5G might well break some video companies while at the exact same time make others.
Let's take a look at AT&T.
In the last four years AT&T has included 80 billion dollars of extra debt leaving it with more than 160 billion dollars of brief and long term debt. Now, 50 billion of this staggering number was the result of the 2015 purchase of DirecTV.
My point is not to break down the AT&T financial obligation numbers, I'm not an expert, however rather offer a viewpoint that the financial scenario for AT&T going into its enormous 5G investment cycle, while at the very same time making known their tactical effort 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 supplier like AT&T do to address the economic capture, and the total headwinds to the video business? Such as declining pay TELEVISION subs, and fragmenting OTT service offerings. This is the concern on many minds who are evaluating the future of the video service.
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've 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 be able to reach more consumers with a better quality experience as a result 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 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 provide low resolution mobile profiles.
Video distributors who continue to under serve their customers will rapidly be at a downside, and ripe for disturbance, I think, from brand-new service designs such as AVOD and the most recent and most efficient video technologies.
The 4 character video technology that may conserve the video organisation.
The 4 character video requirement that I think will play a key function in the success of the video company is HEVC, the video codec that is now released on 2 billion devices. The following slide presentation offers numbers relating to HEVC gadget penetration which deserve seeing.
There has been much blogged about HEVC royalty concerns, something that triggered development of an alternative codec which most likely is royalty complimentary. However, while some in the industry ended up being preoccupied with concerns around licensing and royalties, major advancements have been made on the legal front, consisting of almost every CE gadget producer including HEVC playback support.
For instance, HEVC Advance waived all royalties for digital distribution of content. This implies, HEVC encoded content that is streamed will just carry a royalty for the hardware decoder and this is already covered by the getting device. Offered that you are providing bits over the wire and not by means of a physical mechanism such as Blu-ray Disc, your business will not need to pay any additional royalties, at least 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 content to consumers today, consist of: Amazon, Comcast, DirecTV, Dish Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, simply to call a few.
What about HEVC playback support?
This is an excellent and essential question and possibly the area of development around the HEVC community that is least known or understood.
Beginning with at 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 guaranteed that support for HEVC exists with no requirement 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 device. Because 2015, market reports reveal this group of items numbers 400 million. That's 400 million gadgets that support HEVC natively. It's a fantastic start, however what about mobile?
The data company ScientiaMobile preserves the biggest dataset of network gadget gain access to profiles by getting information from the biggest cordless operators on the planet. This company reports that a massive 78% of all iOS smart device demands originate from gadgets that support hardware-accelerated HEVC decoding. And though iOS gadgets are primary in the majority of developed markets, Android is still an extremely important device profile, and here the ScientiaMobile data is very encouraging with 57% of Android mobile phone requests originating from gadgets that support HEVC decoding.
And provided the HEVC device penetration and hardware support any worries about an early relocation to HEVC are not called for. What other elements validate the concept that HEVC will be a booster to the video service?
LiveU recently published a report called 'State of Live' that revealed growing trends in HEVC broadcasting, especially worldwide of sports. And simply in case you have thoughts that making use of HEVC is a passing pattern en route to some alternative codec, think about that in 2018, 25% of all LiveU generated traffic was streamed utilizing the HEVC video requirement 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 trend that was plainly apparent at the 2018 FIFA World Cup in Russia.
So what does this mean for the industry?
The trends we simply took a look at reveal that we have an ever more requiring consumer who desires content that displays the complete capabilities of their seeing device, which suggests higher resolutions and advanced video standards like HDR. However, this same user is now taking in more material, which contributes to more crowding the network.
This consumer usage pattern is clashing with a shift from managed services to unmanaged, or OTT distribution and developing technical tension inside incumbent service operators who are facing technical shifts and organisation model fracturing. Exceptionally, in spite of a very clear danger to the incumbent services who are seeing video customer loses installing into the hundreds of thousands over just a couple of brief 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 written 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 requirement that is set to interfere with a number of the conventional operators and early OTT streaming services. Not since the consumer understands the distinction in between H. 264, VP9, or even HEVC, but due to the fact that the consumer is realising that 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 evidence of our item and innovation quality 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 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 device. 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 distributors and tech business currently encoding and dispersing material in HEVC. And provided the HEVC device penetration and hardware support any worries about an early relocation to HEVC are not called for. What other elements confirm the idea that HEVC will be a booster to the video organisation?
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Published by: Mark Donnigan