The Video Business is in the Best of Times or the Hardest of Times? Mark Donnigan Vice President Marketing at Beamr
Get 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.
Good Times & Worst of Times in Video Mark Donnigan Marketing Leader at Beamr
Can a 4 character innovation save us?
This is an intriguing question due to the fact that there is a paradox emerging in the video organisation where it feels like the the very best of times for many, 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 prior to introducing their direct to consumer company. And after that we have Verizon Media revealing sweeping layoffs which represent an exit from some of the core entertainment service and innovation companies that were operating under the Oath umbrella.
And of course 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 service provider organisation.
Netflix stock is on the increase once again, allowing the company to invest in content at levels that need to bewilder 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), proving that the AVOD service design can be viable and quite important.
5G is going to save us all?
This is where I wish to get in touch with the huge financial investments being made in 5G and provide my point of view on why 5G might well break some video business while at the same time make others.
Let's look at AT&T.
So in the last 4 years AT&T has actually added 80 billion dollars of extra debt leaving it with more than 160 billion dollars of short 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 debt numbers, I'm not an expert, however rather offer a perspective that the monetary circumstance for AT&T going into its massive 5G financial investment cycle, while at the exact same time making known their tactical 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 very various with video.
So what can a service supplier like AT&T do to attend to the financial capture, and the general headwinds to the video service? Such as decreasing pay TV 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 common 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 good 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 being able to leverage a much faster network thanks to 5G.
However, it's bad news for network operators without a plan to monetize this additional traffic load, and naturally incumbents who are wishing to manage with incremental improvements to their services; such as switching from managed 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 consumers will quickly be at a disadvantage, and ripe for disturbance, I think, from brand-new service designs such as AVOD and the latest and most efficient video innovations.
The 4 character video innovation that may save the video business.
The 4 character video standard that I believe will play a key function in the success of the video business is HEVC, the video codec that is now released on 2 billion gadgets. The following slide discussion supplies numbers regarding HEVC gadget penetration which are worth seeing.
There has been much blogged about HEVC royalty concerns, something that set off advancement of an alternative codec which most likely is royalty totally free. However, while some in the industry ended up being preoccupied with questions around licensing and royalties, major developments have been made on the legal front, consisting of almost every CE device manufacturer including HEVC playback support.
HEVC Advance waived all royalties for digital distribution of material. This indicates, HEVC encoded content that is streamed will just bring a royalty for the hardware decoder and this is already covered by the receiving gadget. Offered that you are delivering 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 comfort, the companies who have already done their due diligence on the royalty concern, and are streaming HEVC content to consumers today, include: More Information Amazon, Comcast, DirecTV, Dish Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, simply to call a few.
What about HEVC playback assistance?
This is an extremely excellent and crucial question and maybe the area of development around the HEVC ecosystem that is least recognized or understood.
Starting with at 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 assistance for HEVC is present without any requirement for additional licensing or gamer upgrade.
HEVC is now resident in practically every SoC that enters to any mid to high-end CE video gadget. In fact, considering that 2015, industry reports show this group of items numbers 400 million. That's 400 million devices that support HEVC natively. It's a great start, however what about mobile?
The information business ScientiaMobile maintains the largest dataset of network device access profiles by receiving information from the biggest cordless operators on the planet. This business reports that a whopping 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 an exceptionally important gadget profile, and here the ScientiaMobile information is very encouraging with 57% of Android mobile phone requests originating from devices that support HEVC decoding.
And given the HEVC device penetration and hardware support any concerns about an early relocation to HEVC are not warranted. What other aspects verify 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 patterns in HEVC broadcasting, particularly worldwide of sports. And simply in case you have ideas that the use of 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.
In truth, 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 plainly obvious at the 2018 FIFA World Cup in Russia.
So what does this mean for the market?
The patterns we just took a look at reveal that we have an ever more demanding consumer who desires content that reveals off the complete capabilities of their viewing device, which suggests higher resolutions and advanced video requirements like HDR. However, this very same user is now taking in more content, which adds to additional congesting the network.
This consumer intake pattern is colliding with a shift from handled services to unmanaged, or OTT circulation and creating technical tension inside incumbent service operators who are dealing with technical shifts and organisation model fracturing. Incredibly, in spite of a really clear threat to the incumbent services who are seeing video subscriber loses mounting into the numerous 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 numerous of the traditional operators and early OTT streaming services. Not since the customer knows the difference in between H. 264, VP9, or perhaps HEVC, but because the consumer is ending up being mindful that better quality is possible, and as they do, they will move to the service who provides the very best quality affordably.
At Beamr, our company believe that the evidence of our item and innovation quality must be experienced and not just talked about. Which is why we've put together the very best 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 standard to follow H. 264, begins to take shape. Here we have major video distributors and tech companies already encoding and distributing content in HEVC. And offered the HEVC device penetration and hardware support any worries about an early relocation to HEVC are not necessitated. What other elements validate the idea that HEVC will be a booster to the video company?
You can experiment with Beamr's software application 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
Written by: Mark Donnigan