The Video Business is in the Greatest of Times or the Hardest of Times? Mark Donnigan Marketing Head at Beamr
Read the original LinkedIn article here: The Best of Times & Worst of Times in the Video Business
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Mark Donnigan is VP Marketing at Beamr, a high-performance video encoding innovation company.
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The Video Business is in the Greatest of Times or the Worst of Times? Mark Donnigan VP Marketing at Beamr
Can a 4 character technology conserve us?
This is an intriguing question because there is a paradox emerging in the video company where it seems like the the best of times for lots of, but the worst of times for some.
Here we have Disney announcing that they have actually already accumulated one billion dollars in loses, and this even before launching their direct to customer organisation. And then we have Verizon Media announcing 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 cord cutting numbers haven't grown, which puts increasing pressure on the video side of the provider organisation.
Netflix stock is on the rise again, enabling the business to invest in material at levels that need to mystify their rivals. And then we have news of PlutoTV selling for a mouth watering $340 million dollars in cash to Viacom (deal was announced on January 22, 2019), proving that the AVOD company design can be feasible and rather important.
5G is going to save us all?
This is where I want to get in touch with the huge investments being made in 5G and provide my perspective on why 5G may well break some video business 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 included 80 billion dollars of extra financial obligation leaving it with more than 160 billion dollars of brief and long term financial obligation. Now, 50 billion of this incredible 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 provide a perspective that the monetary situation for AT&T going into its massive 5G investment cycle, while at the very same time making known their tactical 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 various with video.
So what can a service company like AT&T do to address the economic capture, and the overall headwinds to the video organisation? Such as decreasing pay TV subs, and fragmenting OTT service offerings. This is the question on many minds who are evaluating the future of the video business.
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 seen before.
This will be great news for the PlutoTV's of the world and other ingenious video services like Quibi who will be able to reach more consumers with a better quality experience as a result of having the ability to utilize a faster network thanks to 5G.
But, it's bad news for network operators without a plan to monetize this additional traffic load, and of course incumbents who are wishing to get by with incremental improvements to their services; such as switching from handled to unmanaged, or OTT circulation, while continuing to utilize aging video requirements like H. 264 to deliver low resolution mobile profiles.
Video suppliers who continue to under serve their consumers will rapidly be at a drawback, and ripe for disruption, I think, from brand-new service models such as AVOD and the latest and most efficient video innovations.
The 4 character video technology that might save the video business.
The four character video requirement that I think will play an essential role in the success of the video service is HEVC, the video codec that is now released on two billion devices. The following slide discussion supplies numbers concerning HEVC gadget penetration which deserve seeing.
There has been much blogged about HEVC royalty issues, something that triggered development of an alternative codec which presumably is royalty totally free. However, while some in the market ended up being preoccupied with concerns around licensing and royalties, significant developments have actually been made on the legal front, including nearly every CE gadget maker consisting of HEVC playback assistance.
HEVC Advance waived all royalties for digital distribution of content. This implies, HEVC encoded content that is streamed will just bring a royalty for the hardware decoder and this is already covered by the receiving device. Provided that you are delivering bits over the wire and not by means of a physical mechanism such as Blu-ray Disc, your company will not need to pay any extra royalties, a minimum of not to HEVC Advance.
Now, if it's any convenience, the business who have actually already 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 among others.
What about HEVC playback support?
This is a very great and crucial concern and perhaps the area of development around the HEVC environment that is least known or comprehended.
Beginning with in-home playback, if your users have purchased a TELEVISION, video game console, Roku box or Apple TELEVISION in the last 3 years, you can be nearly ensured that support for HEVC is present with no need for extra licensing or gamer upgrade.
HEVC is now resident in nearly every SoC that goes in to any mid to high-end CE video device. That's 400 million devices that support HEVC natively.
The information company ScientiaMobile preserves the largest dataset of network device gain access to profiles by receiving data from the largest wireless operators worldwide. This company reports that a massive 78% of all iOS smart device requests originate from gadgets that support hardware-accelerated HEVC decoding. And though iOS devices are primary in the majority of industrialized markets, Android is still a very crucial gadget profile, and here the ScientiaMobile data is really encouraging with 57% of Android smart device demands originating from devices that support HEVC decoding.
These 2 numbers are where the picture of HEVC as the most sensible video standard to follow H. 264, begins to take shape. Here we have significant video suppliers and tech business currently encoding and dispersing material in HEVC. And provided the HEVC gadget penetration and hardware support any stress over an early relocate to HEVC are not called for. However, what other factors verify the concept that HEVC will be a booster to the video organisation?
LiveU recently published a report called 'State of Live' that revealed 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 Get More Information LiveU created traffic was streamed utilizing the HEVC video standard while the only other codec utilized was H. 264.
In truth, the report stated that the high HEVC use was a direct reflection on the increasing demand for professional-grade video quality, a pattern that was clearly evident at the 2018 FIFA World Cup in Russia.
So what does this mean for the market?
The patterns we just examined expose that we have an ever more demanding customer who desires material that displays the complete abilities of their viewing gadget, which means greater resolutions and more innovative video standards like HDR. This same user is now taking in more material, which contributes to further congesting the network.
This consumer consumption pattern is clashing with a shift from handled services to unmanaged, or OTT distribution and producing technical stress inside incumbent service operators who are facing technical shifts and organisation model fracturing. Incredibly, in spite of a really clear threat to the incumbent services who are seeing video subscriber loses installing into the numerous thousands over simply a few brief quarters, some are continuing with the status quo even while new entrants are launching services that provide the customer more for less.
This is where completion of the story will be composed 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 standard that is set to interfere with much of the traditional operators and early OTT streaming services. Not since the customer understands the distinction between H. 264, VP9, or even HEVC, however since the consumer is ending up being conscious that better quality is possible, and as they do, they will migrate to the service who provides the very best quality cost effectively.
At Beamr, our company believe that the proof of our item and innovation quality should be skilled and not simply talked about. Which is why we've created the best deal that we have seen in the industry where you can utilize our codecs in combination with our VOD transcoder, 100% free of charge.
HEVC is now resident in almost every SoC that goes in to any mid to high-end CE video device. These 2 numbers are where the image of HEVC as the most logical video standard to follow H. 264, begins to take shape. Here we have significant video suppliers and tech companies currently encoding and dispersing material in HEVC. And provided the HEVC device penetration and hardware support any worries about a premature relocation to HEVC are not required. What other factors confirm the concept that HEVC will be a booster to the video service?
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Written by: Mark Donnigan