Best of Times & Worst of Times in Video Services Mark Donnigan Marketing Leader at Beamr
Read 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 innovation company.
Best & Worst of Times in Video Mark Donnigan Vice President Marketing at Beamr
Can a 4 character technology conserve us?
This is a fascinating concern due to the fact that there is a paradox emerging in the video company where it feels like the the very best of times for many, however the worst of times for some.
Here we have Disney revealing that they have actually currently accumulated one billion dollars in loses, and this even before introducing their direct to customer business. And after that we have Verizon Media revealing sweeping layoffs which represent an exit from a few of the core entertainment service and technology services that were running under the Oath umbrella.
And obviously there isn't a reporting interval that passes where the cable cutting numbers haven't grown, which puts increasing pressure on the video side of the company company.
Netflix stock is on the increase once again, allowing the business to invest in content at levels that should mystify their competitors. 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 valuable.
5G is going to save us all?
This is where I wish to link with the massive financial investments being made in 5G and offer my perspective on why 5G might well break some video business while at the very same time make others.
Let's take a look at AT&T.
In the last 4 years AT&T has actually added 80 billion dollars of additional financial obligation leaving it with more than 160 billion dollars of brief and long term debt. Now, 50 billion of this staggering number was the outcome of the 2015 purchase of DirecTV.
My point is not to break down the AT&T financial obligation numbers, I'm not an analyst, however rather provide a point of view that the monetary scenario for AT&T entering into its huge 5G financial investment cycle, while at the very same time making understood their strategic initiative to develop 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 different with video.
So what can a provider like AT&T do to address the economic squeeze, and the general headwinds to the video organisation? Such as declining pay TV subs, and fragmenting OTT service offerings. This is the concern on numerous minds who are analyzing the future of the video organisation.
It is my strong belief that common high speed mobile networks powered by 5G will let loose 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 innovative video services like Quibi who will have the ability to reach more customers with a better quality experience as an outcome of being able to leverage a much faster network thanks to 5G.
It's bad news for network operators without a strategy to monetize this additional traffic load, and of course incumbents who are hoping to get by with incremental enhancements to their services; such as switching from handled to unmanaged, or OTT circulation, while continuing to utilize aging video standards like H. 264 to provide low resolution mobile profiles.
Video distributors who continue to under serve their customers will rapidly be at a disadvantage, and ripe for interruption, I think, from new business models such as AVOD and the newest and most efficient video technologies.
The 4 character video technology that may conserve the video company.
The 4 character video requirement that I believe will play an essential function in the success of the video company is HEVC, the video codec that is now released on 2 billion devices. The following slide discussion offers numbers regarding HEVC gadget penetration which deserve seeing.
There has been much discussed HEVC royalty issues, something that set off development of an alternative codec which presumably is royalty complimentary. While some in the industry became preoccupied with questions around licensing and royalties, major developments have been made on the legal front, including nearly every CE device producer including HEVC playback support.
For example, HEVC Advance waived all royalties for digital circulation of material. This indicates, HEVC encoded content that is streamed will only carry a royalty for the hardware decoder and this is currently covered by the getting gadget. Supplied that you are providing bits over the wire and not through a physical mechanism such as Blu-ray Disc, your company will not have to pay any extra royalties, a minimum of not to HEVC Advance.
Now, if it's any comfort, the companies who have actually currently done their due diligence on the royalty question, and are streaming HEVC material to customers today, include: Amazon, Comcast, DirecTV, Dish Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, simply to call a couple of.
What about HEVC playback support?
This is an extremely good and essential question and maybe the location of advancement around the HEVC environment that is least known or understood.
Beginning with at home playback, if your users have bought a TV, video game console, Roku box or Apple TV in the last 3 years, you can be almost guaranteed that assistance for HEVC is present without any need for additional licensing or gamer upgrade.
HEVC is now resident in almost every SoC that goes in to any mid to high-end CE video device. That's 400 million gadgets that support HEVC natively.
The information business ScientiaMobile preserves the biggest dataset of network gadget access profiles by receiving data from the biggest cordless operators worldwide. This company reports that a massive 78% of all iOS smart device requests come from devices that support hardware-accelerated HEVC decoding. And though iOS devices are primary in the majority of industrialized markets, Android is still an exceptionally essential gadget profile, and here the ScientiaMobile data is really encouraging with 57% of Android mobile phone demands coming from gadgets that support HEVC decoding.
And given the HEVC gadget penetration and hardware support any worries about an early move to HEVC are not warranted. What other factors verify the idea that HEVC will be a booster to the video business?
LiveU just recently published a report called 'State of Live' that showed growing patterns in HEVC broadcasting, particularly in the world of sports. And simply in case you have ideas that making 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 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 need for professional-grade Click Here 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 simply analyzed expose that we have an ever more demanding consumer who wants material that flaunts the complete capabilities of their viewing device, which implies greater resolutions and advanced video requirements like HDR. This very same user is now consuming more content, which contributes to further congesting the network.
This customer usage pattern is clashing with a shift from managed services to unmanaged, or OTT circulation and developing technical stress inside incumbent service operators who are facing technical shifts and company design fracturing. Incredibly, 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 couple of short quarters, some are continuing with the status quo even while brand-new entrants are releasing services that offer the customer more for less.
This is where completion of the story will be written for some as the best of times, and for others as the worst of times.
HEVC is more than a technology enabler. It's a video requirement that is set to interrupt much of the conventional operators and early OTT streaming services. Not because the customer knows the difference between H. 264, VP9, and even HEVC, but because the consumer is ending up being mindful that much better quality is possible, and as they do, they will move to the service who provides the very best quality affordably.
At Beamr, we think that the proof of our item and technology quality need to be skilled and not just spoken about. Which is why we've created the best offer that we have actually seen in the market where you can utilize our codecs in mix with our VOD transcoder, 100% totally free.
HEVC is now resident in nearly every SoC that goes in to any mid to high-end CE video device. These 2 numbers are where the picture of HEVC as the most rational video requirement to follow H. 264, begins to take shape. Here we have major video suppliers and tech business currently encoding and dispersing content in HEVC. And provided the HEVC gadget penetration and hardware support any worries about an early relocation to HEVC are not required. What other elements confirm the concept that HEVC will be a booster to the video business?
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Author: Mark Donnigan