Get the original LinkedIn article here: The Best of Times & Worst of Times in the Video Business
Mark Donnigan is Vice President of Marketing for Beamr, a high-performance video encoding innovation company.
The Best of Times & Worst of Times in the Video Business Mark Donnigan Marketing Head at Beamr
Can a four character innovation conserve us?
This is an interesting question since there is a paradox emerging in the video service where it seems like the the best of times for numerous, 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 business. And then we have Verizon Media revealing sweeping layoffs which represent an exit from a few of the core home entertainment service and technology services that were operating under the Oath umbrella.
And obviously there isn't a reporting interval that passes where the cable cutting numbers have not grown, which puts increasing pressure on the video side of the service company service.
Yet, Netflix stock is on the increase again, allowing the business to purchase material at levels that should mystify their rivals. And after that we have news of PlutoTV selling for a mouth watering $340 million dollars in cash to Viacom (offer was revealed on January 22, 2019), proving that the AVOD service design can be practical and quite important.
5G is going to conserve us all?
This is where I desire to get in touch with the enormous financial investments being made in 5G and offer my perspective 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 debt numbers, I'm not an expert, but rather supply a perspective that the monetary situation for AT&T entering into its massive 5G financial investment cycle, while at the very same time making known their strategic 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 extremely various with video.
So what can a provider like AT&T do to attend to the economic squeeze, and the overall headwinds to the video business? Such as decreasing pay TV subs, and fragmenting OTT service offerings. This is the question on lots of minds who are examining the future of the video company.
It is my strong belief that common high speed mobile networks powered by 5G will unleash 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 ingenious video services like Quibi who will have the ability to reach more consumers with a much better quality experience as an outcome of being able to leverage a faster network thanks to 5G.
It's bad news for network operators without a strategy to monetize this extra traffic load, and of course incumbents who are hoping to get by with incremental enhancements 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 suppliers who continue to under serve their customers will quickly be at a downside, and ripe for disruption, I think, from brand-new organisation models such as AVOD and the latest and most effective video technologies.
The 4 character video technology that may save the video business.
The four character video requirement that I think will play an essential function in the success of the video company is HEVC, the video codec that is now deployed on 2 billion gadgets. The following slide discussion offers numbers concerning HEVC device penetration which are worth seeing.
There has actually been much blogged about HEVC royalty issues, something that activated advancement of an alternative codec which presumably is royalty free. While some in the industry became preoccupied with concerns around licensing and royalties, major developments have actually been made on the legal front, consisting of nearly every CE gadget producer including HEVC playback assistance.
HEVC Advance waived all royalties for digital distribution of material. This implies, 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 business will not have to pay any extra royalties, at least not to HEVC Advance.
Now, if it's any convenience, the companies who have already done their due diligence on the royalty question, and are streaming HEVC material to consumers today, include: Amazon, Comcast, DirecTV, Meal Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, simply among others.
What about HEVC playback assistance?
This is an excellent and essential question and possibly the location of development around the HEVC community that is least known or understood.
Beginning with at home playback, if your users have actually purchased a TELEVISION, game console, Roku box or Apple TV in the last 3 years, you can be nearly guaranteed that assistance for HEVC is present with no need for extra licensing or player upgrade.
HEVC is now resident in practically 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 business ScientiaMobile maintains 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 requests come from gadgets that support hardware-accelerated HEVC decoding. And though iOS gadgets are predominant in a lot of developed markets, Android is still an extremely crucial gadget profile, and here the ScientiaMobile information is really motivating with 57% of Android smart device demands coming from devices Click Here that support HEVC decoding.
And given the HEVC device penetration and hardware support any worries about an early relocation to HEVC are not necessitated. 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 patterns in HEVC broadcasting, specifically in the world of sports. And simply in case you have thoughts that using HEVC is a passing pattern on the method to some alternative codec, think about that in 2018, 25% of all LiveU created traffic was streamed utilizing the HEVC video requirement while the only other codec utilized was H. 264.
The report mentioned that the high HEVC usage was a direct reflection on the increasing need for professional-grade video quality, a trend that was clearly apparent at the 2018 FIFA World Cup in Russia.
What does this mean for the market?
The patterns we simply examined expose that we have an ever more demanding customer who wants material that shows off the full abilities of their seeing gadget, which means higher resolutions and more sophisticated video requirements like HDR. However, this very same user is now consuming more material, which adds to further crowding the network.
This customer intake pattern is clashing with a shift from handled services to unmanaged, or OTT circulation and producing technical tension inside incumbent service operators who are facing technical shifts and company design fracturing. Astonishingly, in spite of a really clear hazard to the incumbent services who are seeing video subscriber loses installing into the hundreds of thousands over just a few short quarters, some are continuing with the status quo even while new entrants are launching services that give 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 requirement that is set to interrupt a number of the conventional operators and early OTT streaming services. Not because the customer knows the difference between H. 264, VP9, and even HEVC, but since the consumer is becoming mindful that better quality is possible, and as they do, they will move to the service who delivers the finest quality affordably.
At Beamr, we think that the evidence of our product and innovation quality must be knowledgeable and not just discussed. Which is why we have actually created the finest deal that we have seen in the market where you can utilize our codecs in mix with our VOD transcoder, 100% for free.
HEVC is now resident in almost every SoC that goes in to any mid to high-end CE video gadget. These 2 numbers are where the photo of HEVC as the most sensible video standard to follow H. 264, begins to take shape. Here we have major video distributors and tech business already encoding and dispersing material in HEVC. And given the HEVC gadget penetration and hardware support any concerns about a premature move to HEVC are not required. What other factors confirm the concept that HEVC will be a booster to the video service?
You can check out Beamr's software video encoders today and get up to 100 hours of totally free HEVC and H. 264 video transcoding each month. CLICK HERE
Originally published by: Mark Donnigan