Are we in the best of times or the worst of times in video? Mark Donnigan VP Marketing 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 innovation company.
The Best of Times & Worst of Times in the Video Business Mark Donnigan Vice President Marketing at Beamr
Can a four character technology conserve us?
This is an interesting question due to the fact that there is a paradox emerging in the video service where it seems like the the finest of times for many, but the worst of times for some.
Here we have Disney announcing that they have currently accumulated one billion dollars in loses, and this even prior to releasing their direct to customer service. And after that we have Verizon Media revealing sweeping layoffs which represent an exit from some of the core entertainment service and innovation organisations that were running under the Oath umbrella.
And obviously there isn't a reporting period that passes where the cord cutting numbers have not grown, which puts increasing pressure on the video side of the provider company.
Netflix stock is on the increase once again, permitting the business to invest in content at levels that should baffle their rivals. And then we have news of PlutoTV selling for a mouth watering $340 million dollars in cash to Viacom (deal was revealed on January 22, 2019), proving that the AVOD organisation model can be viable and rather important.
5G is going to conserve us all, right?
This is where I desire to connect with the enormous investments being made in 5G and supply my perspective on why 5G may well break some video companies while at the exact same time make others.
Let's take a look at AT&T.
So in the last four years AT&T has actually added 80 billion dollars of additional debt leaving it with more than 160 billion dollars of brief and long term debt. Now, 50 billion of this incredible 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, however rather supply a perspective that the financial situation for AT&T entering into its enormous 5G financial investment cycle, while at the very same time making known their strategic initiative to build up their video service capacity through Warner Media direct to customer offerings like HBO, and DirecTV, is going to be challenged, unless they do something extremely various with video.
What can a service company like AT&T do to address the economic squeeze, and the overall headwinds to the video service? Such as declining pay TELEVISION subs, and fragmenting OTT service offerings. This is the concern on numerous 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 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 have the ability to reach more customers with a better quality experience as a result of having the ability to take advantage of a faster network thanks to 5G.
However, it's bad news for network operators without a plan to monetize this extra traffic load, and naturally incumbents who are hoping to manage with incremental enhancements to their services; such as switching from managed to unmanaged, or OTT circulation, while continuing to use aging video requirements like H. 264 to deliver low resolution mobile profiles.
Video distributors who continue to under serve their consumers will quickly be at a drawback, and ripe for disturbance, I believe, from brand-new service designs such as AVOD and the most recent and most effective video innovations.
The 4 character video innovation that may save the video company.
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 deployed on 2 billion gadgets. The following slide discussion provides numbers regarding HEVC device penetration which deserve seeing.
There has actually been much discussed HEVC royalty concerns, something that triggered development of an alternative codec which most likely is royalty totally free. However, while some in the market ended up being preoccupied with questions around licensing and royalties, major advancements have been made on the legal front, consisting of nearly every CE device maker including HEVC playback support.
For example, HEVC Advance waived all royalties for digital circulation of material. This indicates, HEVC encoded material that is streamed will only bring a royalty for the hardware decoder and this is currently covered by the receiving device. Offered that you are providing bits over the wire and not through a physical system such as Blu-ray Disc, your business will not need to pay any extra royalties, at least not to HEVC Advance.
Now, if it's any convenience, the companies 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 among others.
What about HEVC playback assistance?
This is an excellent and essential question and perhaps the area of development around the HEVC environment that is least recognized or comprehended.
Starting with at home playback, if your users have actually purchased a TELEVISION, video game console, Roku box or Apple TELEVISION in the last 3 years, you can be almost ensured that support for HEVC is present without any need for additional licensing or gamer upgrade.
HEVC is now resident in practically every SoC that goes in to any mid to high-end CE video gadget. Because 2015, market reports reveal this group of products numbers 400 million. That's 400 million devices that support HEVC natively. It's an excellent start, however what about mobile?
The data company ScientiaMobile maintains the largest dataset of network device gain access to profiles by getting data from the largest wireless operators in the world. This company reports that a massive 78% of all iOS mobile phone demands come from gadgets that support hardware-accelerated HEVC decoding. And though iOS gadgets are primary in a lot of industrialized markets, Android is still an exceptionally crucial gadget profile, and here the ScientiaMobile information is extremely motivating with 57% of Android smart device demands originating from gadgets that support HEVC decoding.
And offered the HEVC gadget penetration and hardware support any worries about a premature relocation to HEVC are not called for. What other elements validate the idea that HEVC will be a booster to the video company?
LiveU recently released a report called 'State of Live' that showed growing trends in HEVC broadcasting, especially on the planet of sports. And just 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.
The report specified that the high HEVC usage was a direct reflection on the increasing need for professional-grade video quality, a trend that was plainly evident at the 2018 FIFA World Cup in Russia.
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 wants content that reveals off the complete capabilities of their viewing device, which indicates greater resolutions and more sophisticated video standards like HDR. This very same user is now taking in more content, which contributes to more crowding the network.
This customer intake pattern is clashing with a shift from handled services to unmanaged, or OTT distribution and producing technical tension inside incumbent service operators who are facing technical shifts and company model fracturing. Remarkably, in spite of a really clear risk to the incumbent services who are seeing video customer loses mounting into the hundreds of thousands over simply a couple of brief quarters, some are continuing with the status quo even while new entrants are launching services that offer the customer more for less.
This is where completion of the story will be written 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 requirement that is set to interrupt many of the traditional operators and early OTT streaming services. Not since the consumer understands the difference between H. 264, VP9, and even HEVC, however because the customer is realising that better quality is possible, and as they do, they will migrate to the service who delivers the very best quality affordably.
At Beamr, we believe that the evidence of our item and innovation quality must be knowledgeable and not just discussed. Which is why we've assembled the finest 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 photo of HEVC as the most logical video standard to follow H. 264, starts to take shape. Here we have major 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 called for. What other factors validate the idea that HEVC will be a booster to the video business?
You can try out Beamr's software application video encoders today and get up to 100 hours of free HEVC and H. 264 video transcoding each month. CLICK HERE
Written Click Here to Learn More by: Mark Donnigan