Are we in the good times or the 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.
Are we in the best of times or the worst of times in video? Mark Donnigan Marketing Head at Beamr
Can a 4 character innovation save us?
This is a fascinating question since there is a paradox emerging in the video organisation where it seems like the the finest of times for lots of, 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 before launching their direct to consumer company. And then we have Verizon Media revealing sweeping layoffs which represent an exit from some of the core home entertainment service and innovation companies that were running under the Oath umbrella.
And naturally there isn't a reporting interval that goes by where the cord cutting numbers have not grown, which puts increasing pressure on the video side of the provider service.
Yet, Netflix stock is on the rise again, allowing the company to invest in material at levels that should mystify 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 organisation design can be feasible and rather important.
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 point of view on why 5G may well break some video business while at the exact same time make others.
Let's take a look at AT&T.
So in the last 4 years AT&T has added 80 billion dollars of extra financial obligation leaving it with more than 160 billion dollars of brief 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 debt numbers, I'm not an analyst, but rather offer a viewpoint that the monetary scenario for AT&T going into its massive 5G investment cycle, while at the exact same time making known their strategic effort to construct up 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 provider like AT&T do to attend to the financial squeeze, and the overall headwinds to the video organisation? Such as decreasing pay TV subs, and fragmenting OTT service offerings. This is the concern on many minds who are examining the future of the video business.
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 ever seen before.
This will be good news for the PlutoTV's of the world and other innovative video services like Quibi who will be able to reach more customers with a better quality experience as an outcome of having the ability to take advantage of a faster network thanks to 5G.
But, it's bad news for network operators without a strategy to monetize this additional traffic load, and naturally incumbents who are intending to get by with incremental improvements to their services; such as switching from handled to unmanaged, or OTT circulation, 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 quickly be at a drawback, and ripe for interruption, I believe, from brand-new company models such as AVOD and the newest and most efficient video technologies.
The four character video innovation that might conserve the video service.
The 4 character video requirement that I believe will play a key function in the success of the video service is HEVC, the video codec that is now deployed on 2 billion gadgets. The following slide discussion supplies numbers regarding HEVC gadget penetration which deserve seeing.
There has been much discussed HEVC royalty issues, something that activated development of an alternative codec which most likely is royalty totally free. Nevertheless, while some in the industry ended up being preoccupied with questions around licensing and royalties, major advancements have been made on the legal front, consisting of nearly every CE gadget manufacturer consisting of HEVC playback assistance.
For example, HEVC Advance waived all royalties for digital circulation of content. This suggests, 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 business will not have to pay any extra royalties, a minimum of not to HEVC Advance.
Now, if it's any comfort, the business who have currently done their due diligence on the royalty question, and are streaming HEVC material to customers today, include: Amazon, Comcast, DirecTV, Meal Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, just to name a couple of.
What about HEVC playback support?
This is a great and crucial question and possibly the area of development around the HEVC environment that is least known or understood.
Beginning with in-home playback, if your users have actually acquired a TV, video game console, Roku box or Apple TELEVISION in the last 3 years, you can be nearly guaranteed that assistance for HEVC exists without any need 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 device. In truth, since 2015, industry reports reveal this group of items numbers 400 million. That's 400 million gadgets that support HEVC natively. It's a fantastic start, but what about mobile?
The data company ScientiaMobile preserves the largest dataset of network device access profiles by receiving information from the biggest cordless operators worldwide. This business reports that a tremendous 78% of all iOS smartphone demands originate from gadgets that support hardware-accelerated HEVC decoding. And though iOS gadgets are primary in most developed markets, Android is still an incredibly essential gadget profile, and here the ScientiaMobile information is really motivating with 57% of Android smartphone requests originating from gadgets that support HEVC decoding.
And offered the HEVC device penetration and hardware support any worries about an early relocation to HEVC are not required. What other factors verify 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 ideas that using HEVC is a passing trend en route to some alternative codec, think about that in 2018, 25% of all LiveU produced traffic was streamed utilizing 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 obvious at the 2018 FIFA World Cup in Russia.
So what does this mean for the market?
The patterns we simply analyzed reveal that we have an ever more requiring consumer who wants content that displays the full abilities of their viewing gadget, which means greater resolutions and advanced video requirements like HDR. However, this exact same user is now consuming more material, which contributes to more congesting the network.
This consumer intake pattern is colliding with a shift from managed services to unmanaged, or OTT distribution and creating technical tension inside incumbent service operators who are dealing with technical shifts and business design fracturing. Astonishingly, in spite of a very clear threat to the incumbent services who are seeing video subscriber loses installing into the numerous thousands over just a few short quarters, some are continuing with the status quo even while new entrants are releasing services that give the consumer more for less.
This is where the end 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 interfere with a lot of the traditional operators and early OTT streaming services. Not since the customer understands the distinction in between H. 264, VP9, or even HEVC, but because the consumer is realising that much better quality is possible, and as they do, they will move to the service who provides the very best quality cost effectively.
At Beamr, we think that the evidence of our item and innovation quality need to be knowledgeable and not simply spoken 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 nearly Click Here 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 standard to follow H. 264, begins to take shape. Here we have significant video suppliers and tech business currently encoding and dispersing material in HEVC. And provided the HEVC device penetration and hardware support any worries about a premature relocation to HEVC are not necessitated. What other aspects confirm the concept that HEVC will be a booster to the video company?
You can experiment with Beamr's software video encoders today and get up to 100 hours of complimentary HEVC and H. 264 video transcoding on a monthly basis. CLICK ON THIS LINK
Originally published by: Mark Donnigan