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 technology company.
The Best of Times & Worst of Times in the Video Business Mark Donnigan Marketing Head at Beamr
Can a four character innovation save us?
This is an interesting question due to the fact that there is a paradox emerging in the video company where it seems like the the finest of times for numerous, but the worst of times for some.
Here we have Disney announcing that they have currently accrued one billion dollars in loses, and this even before releasing their direct to consumer organisation. And after that we have Verizon Media announcing sweeping layoffs which represent an exit from some of the core home entertainment service and innovation services that were running under the Oath umbrella.
And obviously there isn't a reporting period that passes where the cable cutting numbers have not grown, which puts increasing pressure on the video side of the company company.
Yet, Netflix stock is on the rise once again, enabling the company to buy content at levels that should bewilder their rivals. And after that we have news of PlutoTV selling for a mouth watering $340 million dollars in cash to Viacom (deal was announced on January 22, 2019), proving that the AVOD service model can be feasible and rather valuable.
5G is going to save us all?
This is where I wish to get in touch with the massive investments being made in 5G and supply my viewpoint 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 4 years AT&T has included 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 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 analyst, but rather supply a perspective that the financial circumstance for AT&T entering into its massive 5G financial investment cycle, while at the same time making known their strategic effort to develop their video service capability through Warner Media direct to customer offerings like HBO, and DirecTV, is going to be challenged, unless they do something very various with video.
What can a service company like AT&T do to address the economic squeeze, and the total headwinds to the video company? Such as declining pay TELEVISION subs, and fragmenting OTT service offerings. This is the concern on lots of 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 release a video tsunami of traffic on the network like we've never seen prior to.
This will be great news for the PlutoTV's of the world and other innovative video services like Quibi who will have the ability to reach more consumers with a better quality experience as an outcome of having the ability to utilize a quicker network thanks to 5G.
But, it's bad news for network operators without a strategy to monetize this extra traffic load, and naturally incumbents who are wishing to get by with incremental enhancements to their services; such as switching from handled to unmanaged, or OTT distribution, while continuing to utilize aging video requirements like H. 264 to provide low resolution mobile profiles.
Video distributors who continue to under serve their customers will quickly be at a drawback, and ripe for interruption, I believe, from new company models such as AVOD and the latest and most efficient video technologies.
The four character video technology that may conserve the video business.
The 4 character video requirement 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 2 billion gadgets. The following slide discussion offers numbers regarding HEVC gadget penetration which deserve seeing.
There has been much composed about HEVC royalty issues, something that set off advancement of an alternative codec which presumably is royalty totally free. However, while some in the market became preoccupied with questions around licensing and royalties, significant developments have been made on the legal front, consisting of nearly every CE device maker including HEVC playback assistance.
For instance, HEVC Advance waived all royalties for digital circulation of content. 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. Offered 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 need to pay any additional royalties, at least not to HEVC Advance.
Now, if it's any convenience, the business who have already done their due diligence on the royalty concern, and are streaming HEVC material to consumers today, consist of: Amazon, Comcast, DirecTV, Dish Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, just among others.
What about HEVC playback assistance?
This is a very great and important question and maybe the area of development around the HEVC environment that is least known or understood.
Beginning with in-home playback, if your users have bought a TELEVISION, game console, Roku box or Apple TELEVISION in the last 3 years, you can be almost ensured that assistance for HEVC exists with no 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 access profiles by receiving data from the largest wireless operators on the planet. This business reports that a tremendous 78% of all iOS smart device demands originate from devices that support hardware-accelerated HEVC decoding. And though iOS devices are predominant in the majority of industrialized markets, Android is still an incredibly essential device profile, and here the ScientiaMobile data is extremely encouraging with 57% of Android smartphone requests coming from devices that support HEVC decoding.
These 2 numbers are where the picture of HEVC as the most logical video requirement to follow H. 264, begins to take shape. Here we have major video suppliers and tech companies currently encoding and distributing content in HEVC. And offered the HEVC gadget penetration and hardware support any stress over a premature move to HEVC are not required. What other factors confirm the idea that HEVC will be a booster to the video service?
LiveU just recently released a report called 'State of Live' that showed growing trends in HEVC broadcasting, specifically on the planet of sports. And simply in case you have thoughts that using HEVC is a passing trend en route to some alternative codec, consider that in 2018, 25% of all LiveU produced traffic was streamed using the HEVC video standard while the only other codec utilized was H. 264.
The report specified that the high HEVC use was a direct reflection on the increasing demand for professional-grade video quality, a pattern that was clearly evident at the 2018 FIFA World Cup in Russia.
So what does this mean for the industry?
The patterns we just 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 indicates higher resolutions and more sophisticated video standards like HDR. But, this very same user is now consuming more material, which contributes to additional congesting the network.
This consumer consumption pattern is colliding with a shift from handled services to unmanaged, or OTT distribution and creating technical stress inside incumbent service operators who are facing technical shifts and business design fracturing. Surprisingly, in spite of a very clear danger to the incumbent services who are seeing video customer loses mounting into the hundreds of thousands over simply 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 finest of times, and for others as the worst of times.
HEVC is more than a technology enabler. It's a video standard that is set to interrupt a number of the traditional operators and click here early OTT streaming services. Not since the customer knows the difference between H. 264, VP9, and even HEVC, but due to the fact that the customer is realising 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 evidence of our product and innovation quality must be knowledgeable and not just talked about. Which is why we have actually put together the finest deal that we have actually seen in the market 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 gadget. These two numbers are where the photo of HEVC as the most rational video requirement to follow H. 264, starts to take shape. Here we have significant video suppliers and tech business already encoding and dispersing content in HEVC. And given the HEVC gadget penetration and hardware support any concerns about an early move to HEVC are not called for. What other elements verify the idea that HEVC will be a booster to the video organisation?
You can experiment with Beamr's software video encoders today and get up to 100 hours of complimentary HEVC and H. 264 video transcoding each month. CLICK ON THIS LINK
Author: Mark Donnigan