Are we in the best of times or the bad times in the video business? Mark Donnigan Marketing Head 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 for Beamr, a high-performance video encoding innovation company.
Good Times & Worst of Times in the Video Business Mark Donnigan Marketing Leader at Beamr
Can a four character technology conserve us?
This is an interesting question because there is a paradox emerging in the video organisation where it seems 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 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 a few of the core entertainment service and technology organisations that were running under the Oath umbrella.
And naturally there isn't a reporting period that goes by where the cord cutting numbers have not grown, which puts increasing pressure on the video side of the service supplier organisation.
Yet, Netflix stock is on the increase once again, enabling the company to invest in material at levels that should baffle 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 business design can be practical and quite important.
5G is going to conserve us all?
This is where I wish to link with the huge investments being made in 5G and supply my point of view on why 5G may well break some video business while at the same time make others.
Let's take a 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 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 financial obligation numbers, I'm not an expert, however rather provide a viewpoint that the monetary circumstance for AT&T going into its massive 5G investment cycle, while at the same time making understood their tactical effort to develop up their video service capability through Warner Media direct to customer offerings like HBO, and DirecTV, is going to be challenged, unless they do something extremely various with video.
So what can a company like AT&T do to resolve the financial squeeze, and the general headwinds to the video business? Such as declining pay TELEVISION subs, and fragmenting OTT service offerings. This is the concern on lots of minds who are evaluating the future of the video organisation.
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 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 customers with a much better quality experience as a result of being able to take advantage of a faster network thanks to 5G.
But, it's bad news for network operators without a plan to monetize this additional traffic load, and obviously incumbents who are wanting to manage with incremental improvements to their services; such as changing from managed to unmanaged, or OTT circulation, while continuing to utilize aging video standards like H. 264 to provide low resolution mobile profiles.
Video suppliers who continue to under serve their consumers will quickly be at a downside, and ripe for disturbance, I think, from brand-new service designs such as AVOD and the most recent and most effective video innovations.
The four character video technology that might conserve the video service.
The four character video standard that I think will play an essential function in the success of the video business is HEVC, the video codec that is now released on two billion gadgets. The following slide presentation offers numbers concerning HEVC device penetration which deserve seeing.
There has actually been much blogged about HEVC royalty concerns, something that triggered advancement of an alternative codec which most likely is royalty free. While some in the market became preoccupied with concerns around licensing and royalties, major advancements have actually been made on the legal front, including almost every CE device maker including HEVC playback assistance.
For example, HEVC Advance waived all royalties for digital distribution 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. Provided that you are providing bits over the wire and not by means of a physical system such as Blu-ray Disc, your business will not have to pay any additional royalties, a minimum of not to HEVC Advance.
Now, if it's any convenience, the business who have already done their due diligence on the royalty concern, and are streaming HEVC material to customers today, consist of: Amazon, Comcast, DirecTV, Dish Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, simply to call a few.
What about HEVC playback support?
This is a very good and crucial concern and perhaps the area of development around the HEVC community that is least recognized or comprehended.
Beginning with at home playback, if your users have actually acquired a TELEVISION, video game console, Roku box or Apple TELEVISION in the last 3 years, you can be almost guaranteed that assistance for HEVC exists with no requirement for additional licensing or gamer upgrade.
HEVC is now resident in nearly every SoC that goes in to any mid to high-end CE video device. In reality, considering that 2015, industry reports reveal this group of items numbers 400 million. more info here That's 400 million devices that support HEVC natively. It's a terrific start, however what about mobile?
The information business ScientiaMobile keeps the largest dataset of network device access profiles by receiving data from the biggest cordless operators worldwide. This company reports that a whopping 78% of all iOS smart device demands come from devices that support hardware-accelerated HEVC decoding. And though iOS devices are predominant in many developed markets, Android is still an exceptionally important device profile, and here the ScientiaMobile information is very encouraging with 57% of Android smartphone requests originating from gadgets that support HEVC decoding.
And given the HEVC gadget penetration and hardware support any concerns about a premature move to HEVC are not necessitated. What other factors verify the concept that HEVC will be a booster to the video organisation?
LiveU just recently released a report called 'State of Live' that revealed growing patterns in HEVC broadcasting, specifically in the world of sports. And simply in case you have ideas that using HEVC is a passing pattern on the method to some alternative codec, think about 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 mentioned that the high HEVC usage was a direct reflection on the increasing demand for professional-grade video quality, a pattern that was plainly evident 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 desires content that flaunts the full abilities of their viewing device, which indicates greater resolutions and more sophisticated video requirements like HDR. However, this same user is now consuming more material, which contributes to additional crowding the network.
This customer intake pattern is hitting a shift from managed services to unmanaged, or OTT circulation and producing technical stress inside incumbent service operators who are dealing with technical shifts and company design fracturing. Exceptionally, in spite of a really clear risk to the incumbent services who are seeing video customer loses mounting into the numerous thousands over just a couple of 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 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 interfere with a number of the traditional operators and early OTT streaming services. Not because the consumer understands the difference between H. 264, VP9, or even HEVC, however since the customer is becoming mindful 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 think that the proof of our item and innovation quality must be knowledgeable and not simply spoken about. Which is why we have actually put together the best deal that we have seen in the industry where you can utilize our codecs in combination with our VOD transcoder, 100% totally free.
HEVC is now resident in practically 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 logical video standard to follow H. 264, begins to take shape. Here we have significant video suppliers and tech business already encoding and distributing content in HEVC. And offered the HEVC device penetration and hardware support any worries about a premature relocation to HEVC are not necessitated. What other elements verify the concept that HEVC will be a booster to the video business?
You can attempt out Beamr's software video encoders today and get up to 100 hours of free HEVC and H. 264 video transcoding on a monthly basis. CLICK HERE
Published by: Mark Donnigan