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
Mark Donnigan is VP Marketing at Beamr, a high-performance video encoding technology company.
The Best of Times & Worst of Times in the Video Business Mark Donnigan VP Marketing at Beamr
Can a four character technology save us?
This is a fascinating question since there is a paradox emerging in the video organisation where it seems like the the very best of times for lots of, 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 prior to launching their direct to customer organisation. And after that we have Verizon Media announcing sweeping layoffs which represent an exit from some of the core home entertainment service and innovation companies that were running under the Oath umbrella.
And naturally 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 supplier business.
Netflix stock is on the rise again, allowing the business to invest in content at levels that need to mystify their rivals. And after that we have news of PlutoTV selling for a mouth watering $340 million dollars in money to Viacom (offer was revealed on January 22, 2019), showing that the AVOD company design can be practical and rather important.
5G is going to save us all, right?
This is where I wish to get in touch with the massive investments being made in 5G and provide my perspective on why 5G may well break some video companies while at the very same time make others.
Let's look at AT&T.
In the last four years AT&T has added 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 result of the 2015 purchase of DirecTV.
My point is not to break down the AT&T debt numbers, I'm not an analyst, but rather provide a perspective that the monetary scenario for AT&T going into its huge 5G financial investment cycle, while at the same time making understood their strategic initiative to develop their video service capacity through Warner Media direct to customer offerings like HBO, and DirecTV, is going to be challenged, unless they do something very various with video.
So what can a service company like AT&T do to attend to the financial capture, and the overall headwinds to the video organisation? Such as decreasing pay TELEVISION subs, and fragmenting OTT service offerings. This is the question on lots of minds who are analyzing 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've never ever seen before.
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 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 improvements to their services; such as changing from handled to unmanaged, or OTT distribution, while continuing to utilize aging video requirements like H. 264 to deliver low resolution mobile profiles.
Video distributors who continue to under serve their customers will rapidly be at a drawback, and ripe for disturbance, I think, from brand-new business designs such as AVOD and the latest and most effective video innovations.
The 4 character video innovation that might save the video service.
The four character video standard that I think will play a key function in the success of the video company is HEVC, the video codec that is now released on 2 billion gadgets. The following slide presentation provides numbers relating to HEVC device penetration which are worth seeing.
There has actually been much written about HEVC royalty issues, something that set off advancement of an alternative codec which most likely is royalty complimentary. While some in the market ended up being preoccupied with concerns around licensing and royalties, significant advancements have been made on the legal front, consisting of almost every CE device manufacturer including HEVC playback support.
For instance, HEVC Advance waived all royalties for digital distribution of material. This means, HEVC encoded material that is streamed will only carry a royalty for the hardware decoder and this is already covered by the receiving gadget. Supplied that you are delivering bits over the wire and not through a physical system such as Blu-ray Disc, your business will not need to pay any additional royalties, at least not to HEVC Advance.
Now, if it's any comfort, the companies who have currently done their due diligence on the royalty concern, and are streaming HEVC material to consumers today, include: Amazon, Comcast, DirecTV, Dish Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, simply to call a couple of.
What about HEVC playback assistance?
This is a great and important question and perhaps the location of development around the HEVC environment that is least recognized or understood.
Starting with in-home playback, if your users have actually bought a TV, video game console, Roku box or Apple TV in the last 3 years, you can be almost ensured that assistance for HEVC is present without any requirement for extra licensing or player 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, market reports show this group of products numbers 400 million. That's 400 million gadgets that support HEVC natively. It's a great start, however what about mobile?
The data business ScientiaMobile preserves the largest dataset of network device access profiles by receiving information from the biggest wireless operators on the planet. This company reports that a massive 78% of all iOS mobile phone demands originate from gadgets that support hardware-accelerated HEVC decoding. And though iOS devices are predominant in most developed markets, Android is still an incredibly important device profile, and here the ScientiaMobile information is very encouraging with 57% of Android mobile phone requests originating from devices that support HEVC decoding.
And offered the HEVC device penetration and hardware support any concerns about an early move to HEVC are not warranted. What other aspects verify the idea that HEVC will be a booster to the video service?
LiveU 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 thoughts that the usage of HEVC is a passing trend on the way to some alternative codec, consider that in 2018, 25% of all LiveU generated traffic was streamed using the HEVC video requirement while the only other codec used was H. 264.
In reality, 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 clearly obvious at the 2018 FIFA World Cup in Russia.
What does this mean for the market?
The trends we just examined reveal that we have an ever more requiring customer who wants material that shows off the complete abilities of their seeing device, which suggests higher resolutions and more advanced video requirements like HDR. This exact same user is now consuming more material, which contributes to further crowding the network.
This customer intake pattern is hitting a shift from managed services to unmanaged, or OTT distribution and producing technical stress inside incumbent service operators who are facing technical shifts and service design fracturing. Amazingly, in spite of an extremely clear hazard to the incumbent services who are seeing video subscriber loses mounting into the hundreds of thousands over just a few short quarters, some are continuing with the status quo even while new entrants are introducing services that offer the consumer more for less.
This is where completion of the story will be written for some as the very best of times, and Click Here to Learn More for others as the worst of times.
HEVC is more than an innovation enabler. It's a video standard that is set to disrupt many of the standard operators and early OTT streaming services. Not since the consumer knows the distinction in between H. 264, VP9, or perhaps HEVC, however because the consumer is becoming conscious that much better quality is possible, and as they do, they will move to the service who provides the finest quality cost effectively.
At Beamr, we think that the evidence of our item and innovation quality should be knowledgeable and not simply spoken about. Which is why we have actually created the finest deal that we have actually seen in the market where you can utilize our codecs in mix with our VOD transcoder, 100% for complimentary.
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 image of HEVC as the most sensible video requirement to follow H. 264, begins to take shape. Here we have major video distributors and tech companies currently encoding and dispersing material in HEVC. And provided the HEVC device penetration and hardware support any worries about an early relocation to HEVC are not necessitated. What other aspects verify the idea that HEVC will be a booster to the video company?
You can check out 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
Published by: Mark Donnigan