The Best of Times & Worst of Times in the Video Business Mark Donnigan Vice President 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 for Beamr, a high-performance video encoding innovation company.
Best & Worst of Times in Video Mark Donnigan Marketing Head at Beamr
Can a four character innovation conserve us?
This is an intriguing question since there is a paradox emerging in the video company where it seems like the the very best of times for lots of, but the worst of times for some.
Here we have Disney revealing that they have currently accumulated 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 companies that were operating under the Oath umbrella.
And of course there isn't a reporting period that passes where the cord cutting numbers haven't grown, which puts increasing pressure on the video side of the provider organisation.
Netflix stock is on the increase once again, allowing the company to invest in content at levels that must mystify their competitors. And then we have news of PlutoTV selling for a mouth watering $340 million dollars in cash to Viacom (offer was announced on January 22, 2019), showing that the AVOD service model can be viable and rather valuable.
5G is going to save us all, right?
This is where I desire to connect with the enormous financial investments being made in 5G and offer my viewpoint on why 5G might well break some video companies while at the very same time make others.
Let's take a look at AT&T.
In the last 4 years AT&T has included 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 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, however rather provide a viewpoint that the financial scenario for AT&T entering into its huge 5G investment cycle, while at the exact same time making understood their tactical 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 very different with video.
So what can a service company like AT&T do to resolve the financial squeeze, and the general headwinds to the video business? Such as decreasing pay TV subs, and fragmenting OTT service offerings. This is the concern on lots of minds who are evaluating the future of the video company.
It is my strong belief that ubiquitous high speed mobile networks powered by 5G will let loose a video tsunami of traffic on the network like we've never seen before.
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 customers with a better quality experience as an outcome of having the ability to take advantage of a much faster network thanks to 5G.
But, it's bad news for network operators without a plan to monetize this extra traffic load, and of course incumbents who are intending to manage with incremental improvements to their services; such as changing from managed to unmanaged, or OTT distribution, while continuing to utilize aging video requirements like H. 264 to provide low resolution mobile profiles.
Video suppliers who continue to under serve their clients will rapidly be at a downside, and ripe for interruption, I think, from brand-new service models such as AVOD and the latest and most efficient video technologies.
The four character video technology that might conserve the video organisation.
The 4 character video requirement that I believe will play an essential role in the success of the video business is HEVC, the video codec that is now released on 2 billion gadgets. The following slide presentation supplies numbers concerning HEVC gadget penetration which deserve seeing.
There has been much composed about HEVC royalty issues, something that activated development of an alternative codec which most likely is royalty complimentary. While some in the market ended up being preoccupied with concerns around licensing and royalties, major developments have been made on the legal front, consisting of almost every CE gadget producer consisting of HEVC playback assistance.
For instance, HEVC Advance waived all royalties for digital circulation of content. This suggests, HEVC encoded material that is streamed will only carry a royalty for the hardware decoder and this is currently covered by the receiving gadget. Supplied that you are providing bits over the wire and not via a physical mechanism such as Blu-ray Disc, your company will not need to pay any extra royalties, at least not to HEVC Advance.
Now, if it's any convenience, the companies who have actually currently done their due diligence on the royalty concern, and are streaming HEVC material to customers today, include: Amazon, Comcast, DirecTV, Dish Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, just to call a couple of.
What The Best of Times & Worst of Times in the Video Business about HEVC playback support?
This is a great and crucial question and possibly the location of development around the HEVC ecosystem that is least recognized or comprehended.
Starting with in-home playback, if your users have actually purchased a TELEVISION, game console, Roku box or Apple TELEVISION 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 gadget. That's 400 million devices that support HEVC natively.
The data company ScientiaMobile preserves the largest dataset of network gadget access profiles by receiving information from the largest wireless operators in the world. This business reports that a tremendous 78% of all iOS smartphone requests originate from devices that support hardware-accelerated HEVC decoding. And though iOS devices are primary in most developed markets, Android is still a very essential gadget profile, and here the ScientiaMobile information is really encouraging with 57% of Android mobile phone requests coming from devices that support HEVC decoding.
These two numbers are where the picture of HEVC as the most rational video requirement to follow H. 264, begins to take shape. Here we have major video distributors and tech business already encoding and distributing content in HEVC. And offered the HEVC gadget penetration and hardware support any stress over a premature relocate to HEVC are not warranted. What other factors validate the idea that HEVC will be a booster to the video organisation?
LiveU just recently published a report called 'State of Live' that showed growing patterns in HEVC broadcasting, especially worldwide of sports. And simply in case you have thoughts that making use of HEVC is a passing trend en route to some alternative codec, think about that in 2018, 25% of all LiveU produced traffic was streamed using the HEVC video requirement while the only other codec used was H. 264.
The report stated that the high HEVC usage was a direct reflection on the increasing demand for professional-grade video quality, a trend that was plainly obvious at the 2018 FIFA World Cup in Russia.
What does this mean for the industry?
The trends we simply analyzed expose that we have an ever more requiring customer who wants content that flaunts the full capabilities of their viewing device, which suggests higher resolutions and more advanced video requirements like HDR. However, this same user is now taking in more content, which adds to additional crowding the network.
This customer intake pattern is hitting a shift from managed services to unmanaged, or OTT circulation and creating technical tension inside incumbent service operators who are facing technical shifts and service model fracturing. Incredibly, in spite of a very clear danger to the incumbent services who are seeing video customer loses installing into the numerous thousands over simply a few brief quarters, some are continuing with the status quo even while brand-new entrants are releasing services that provide the customer 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 an innovation enabler. It's a video standard that is set to disrupt many of the conventional operators and early OTT streaming services. Not since the consumer knows the distinction in between H. 264, VP9, or even HEVC, however because the consumer is becoming mindful that better quality is possible, and as they do, they will migrate to the service who delivers the finest quality cost effectively.
At Beamr, we think that the evidence of our item and innovation quality must be skilled and not just spoken about. Which is why we've assembled the very best offer that we have actually seen in the market where you can use 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 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 significant video distributors and tech companies currently encoding and dispersing material in HEVC. And offered the HEVC gadget penetration and hardware support any concerns about a premature move to HEVC are not necessitated. What other aspects validate the idea that HEVC will be a booster to the video business?
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 every month. CLICK HERE
Written by: Mark Donnigan